£10bn deal takes off: Saudis to buy UK jets
Another huge boost for industry as factories hit best figures for 50 years – and exports to US reach new high
SAUDI Arabia is poised to buy a fleet of fighter jets from the UK’s biggest defence company, officials said yesterday.
On the final day of Crown Prince Mohammed bin Salman’s threeday visit, he signed a ‘memorandum of intent’ for the desert kingdom to buy 48 Typhoons from BAE Systems.
The deal could be worth £10 billion and would secure thousands of jobs, including 5,000 at the company’s Warton and Samlesbury plants in Lancashire and 9,500 in the supply chain.
The long-awaited agreement – in the face of fierce criticism from Labour – came just hours after official figures showed British manufacturers are enjoying their longest period of growth for at least half a century.
A second report from the Office for National Statistics showed exports rose 3.1 per cent in January to £29.5 billion – the second biggest haul of all time – with sales to the United States at a record high.
Philip Hammond welcomed the figures ahead of Tuesday’s spring statement in which he is expected to reveal that the economy is in far better shape than the official forecasters feared.
‘British manufacturing has been growing for nine months in a row,’ the Chancellor said. ‘ That’s the longest unbroken run of growth in 50 years. We’re building an economy fit for the future.’
BAE has already sold 620 Typhoon jets, including to Qatar, Oman, Kuwait and Belgium, since a prototype of the aircraft took the skies two decades ago.
But the firm has been waiting anxiously for a new order from Saudi Arabia following the sale of 72 planes in 2007.
The company was forced to slow production of the aircraft because of a lack of orders and was forced to axe 2,000 jobs last autumn as demand for the Typhoon dwindled. BAE shares rose more than 2 per cent after yesterday’s announcement – adding £408 million to the value of the company.
The agreement came at the end of a trip that saw the 32-year-old Saudi ruler meet the Queen, Prince Charles and Prince William as well as Theresa May and the Archbishop of Canterbury.
The Crown Prince signed the deal after meeting Defence Secretary Gavin Williamson at RAF Northolt in west London.
Mr Williamson said: ‘The Crown Prince’s visit has opened a new chapter in our two countries’ historic relationship. We have taken a vital step towards finalising another order for Typhoon jets that will increase security in the Middle East and boost British industry and jobs in our unrivalled aerospace sector.’
BAE chief executive Charles Woodburn welcomed ‘a positive step towards agreeing a contract’ for the sale of the aircraft.
Labour leader Jeremy Corbyn sparked a row earlier in the week when he urged ministers to halt all arms sales to Saudi Arabia in response to the desert kingdom’s involvement in the war in Yemen, which he said had created a ‘humanitarian disaster’.
Mr Corbyn’s opposition to the deal puts him at odds with the powerful Unite union, which represents BAE workers and is one of the Labour leader’s biggest backers. Unite official Alex Flynn said many details of the deal still needed to be worked out, but added: ‘It’s obviously good news for workers whose jobs were under threat.’
Paul Everitt, chief executive of defence trade body ADS, added: ‘Our nation’s expertise in designing, building and supporting world-leading combat air capabilities plays a vital role in safeguarding national security and generating economic prosperity.
‘Today’s announcement will help ensure the UK remains a worldleading military air power and a highly competitive and capable option in the export market.’
However, the order for the British-made fighter jets sparked protests from anti-war campaigners, who mounted demonstrations during the Crown Prince’s visit over the military intervention in Yemen.
Andrew Smith, of Campaign Against Arms Trade, said: ‘This shameful deal will be celebrated in the palaces of Riyadh and by the arms companies who will profit from it, but it will mean even greater destruction for the people of Yemen.’
A spokesman for Save the Children said the charity was ‘deeply concerned about the news’, adding: ‘Britain has both moral and legal obligations to use its close relationship with Saudi Arabia to
‘Boost British industry and jobs’ ‘This is only the beginning’
ensure that weapons aren’t being used indiscriminately, killing and maiming children.’
Potential trade deals worth £65 billion have been agreed during the Saudi Crown Prince’s visit, with officials hailing a ‘significant boost for UK prosperity’.
International trade secretary Liam Fox said: ‘The UK is entering a period of unprecedented economic opportunity, with latest figures showing a surge in exports together with an increase in manufacturing output at the start of the year – this adds up to a positive picture for the British economy.’
Tory MP Jacob Rees-Mogg said: ‘The strength of UK manufacturing shows that leaving the EU is doing no harm and that we remain highly competitive. Indeed, the vote to leave seems to have inspired manufacturing.’
Brexit campaigner John Longworth, the former head of the British Chambers of Commerce, said: ‘ Despite the continuing best efforts of continuity Remainers to persuade us otherwise, the UK economy is doing very well and manufacturing and export order books are outstanding.
‘This is only the beginning of what we can expect once we break free of the Brussels bureaucracy.’