Rifkind opts for US freight aircraft

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Malcolm Rifkind, Secretary of State for Defence, yesterday ended months of uncertainty by announcing a compromise deal to spend £1bn on 25 American Hercules transport aircraft. But he linked it to a commitment to rejoin the European Future Large Aircraftproject.

The President of the Board of Trade, Michael Heseltine, who had fought a fierce battle in support of the FLA, praised the decision.

But at the same time, the Ministry of Defence slipped out a little noticed confirmation of more than 9,000 job losses. An MoD notice detailing the cuts makes it clear redundancy is envisaged. Yesterday's disclosure will come as a blow to service personnel after Tory party conference promises by the Prime Minister and Mr Rifkind that the forces would not be subjected to further upheaval.

After detailed work done in the wake of the Front Line First initiative, the final roll call of service personnel reductions is 1,500 for the Royal Navy, 7,500 for the Royal Air Force, for the army 400 in addition to 80 redundancies announced last month,and 7,100 MoD civil servants. They come on top of 900 navy and 1,000 airforce jobs marked out for axing by previous efficiency measures. The job cut targets must be reached by mid 1996 in the case of the Navy and by April 1997 for the RAF.

Mr Rifkind was meanwhile seeking to lower the temperature elsewhere with the pledge that, while Britain is to buy American Hercules transport aircraft, it will re-enter the European Future Light Aircraft (FLA) programme, protecting British jobs in aerospace production and component supply in the future. The number of jobs that could be saved here, however, will be more than wiped out by losses in the forces.

The Hercules order ends months of speculation and intensive campaigns by Lockheed, which makes the Hercules, and British Aerospace, who had been urging the Government to refurbish the RAF's existing Hercules fleet until the FLA comes on stream from 2003.It will mean a mixed fleet of old Hercules, the new C130J Hercules and possibly FLAs. BAe, one of a four-member consortium building the FLA, has warned that thousands of jobs depended on choosing the FLA.

David Clark, shadow defence secretary, said: "This is a muddled decision from a divided Cabinet ... all they have come up with is a half-baked compromise."

City and Business, page 14