Shipyards' boost with £1bn defence contracts

More than 2,500 jobs will be created or secured after three British shipyards won contracts totalling about £1bn from the Ministry of Defence.

More than 2,500 jobs will be created or secured after three British shipyards won contracts totalling about £1bn from the Ministry of Defence.

The biggest contract - worth £800m - goes to Belfast's Harland and Wolff yard, which will build two roll-on, roll-off ferries.

Tyneside's Swan Hunter yard will employ an extra 1,000 people, as well as securing 1,000 jobs, by building two amphibious landing vessels.

And BAE Systems' Govan yard on the Clyde will also create about 1,000 jobs for two other amphibious landing crafts in a £300m contract.

It is estimated up to 600 jobs will be secured at Harland and Wolff and 800 at Govan.

Defence Secretary Geoff Hoon made the announcement in the Commons today.

He said: "These developments represent good news for our Navy and Marines, good news for our shipyards and very good news for Britain.

"We have in the past relied on the commercial charter market to provide the majority of ships we needed, but the Gulf War showed the potential difficulty of securing sufficient suitable vessels for periods of crisis."

The Strategic Defence Review had shown the need to be able to move British forces quickly to trouble spots overseas.

The SDR identified the need for six roll-on, roll-off ferries to transport equipment. They are not expected to enter combat areas and could not be considered "warlike".

Under EU rules, he insisted, the Government was not allowed to direct that all the ships should be built in the UK.

Two, however, would be built at Harland and Wolff, while the other four would be built at Flensburger yard in Germany.

"This contract is worth around £950m in total. Of that, 85 percent, over £800m, will be spent in the UK, in Britain's interests ... and in helping to sustain UK jobs at Harland and Wolff."

Under the proposed Public Finance Initiative contract, the ships will be available for commercial use while not needed by the MoD in a deal leaving Andrew Weir Shipping responsible for maintenance and management.