Thousands of jobs shielded by new military spending

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The Independent Online
A series of massive new defence equipment orders are expected to be announced by the Government at the beginning of July, two weeks earlier than planned.

Ministers will be able to extract political capital from announcing the orders, which affect tens of thousands of jobs, separately. They include a pounds 4bn order for two new types of missile for the Royal Air Force, two new amphibious ships and a replacement for the ageing Nimrod maritime reconnaissance aircraft and the pounds 9bn order for the British-built component of the new Eurofighter.

Industry sources yesterday said they expected the first announcement as early as 4 July.

British, European and United States contractors are teamed in various combinations to build the missiles. The contest for the Nimrod replacement is between an improved version of the Nimrod, built by British Aerospace and Boeing, and an improved version of the P3 Orion, built by Lockheed and the British GEC.

The most revolutionary new order is the pounds 650m for 700-1,000 new Conventionally Armed Stand-Off Missiles (CASOMs) for the RAF. The fast, air-launched cruise missile will have a range of about 200km, so the RAF will no longer have to fly over targets as it did in the Gulf war, but will engage from a safe distance.

The Storm Shadow missile, built by British Aerospace and the French missile manufacturer Matra, has been the most likely candidate for CASOM. But yesterday McDonnell Douglas, the US aerospace giant, wrote to the Ministry of Defence confirming a price reduction on its tender, following the US decision last week to select McDonnell Douglas to develop a similar missile for the US Air Force and Navy.

The RAF is also to get up to 2,000 "smart" anti-tank missiles, which can be launched from aircraft and seek out enemy tanks, at a cost of about pounds 700m. The contest is between Swarm, which involves 50 UK companies including Hunting engineering, and the US firm Boeing, and Brimstone, built by GEC and Rockwell. The order for up to 27 maritime patrol aircraft to replace the Nimrods is, at pounds 2bn, the most valuable. Both options offer plenty of work in the UK. British Aerospace and Rolls-Royce have committed themselves to upgrading the Nimrod airframe, which is based on the Comet.

The Navy is optimistic it will finally get its two new amphibious assault ships, to be built by Vickers Shipbuilding and Engineering at Barrow in Furness, for about pounds 600m, and that the order will be confirmed before the recess. The Navy is also to get two roll-on, roll-off ferries for landing troops anywhere in the world at short notice.