BAE’s £257m submarine deal

DEFENCE giant BAE Systems has snapped up £257m of Government funding for the final stage of work designing the next generation nuclear submarine for the Royal Navy.

Shares edged 2.5p higher to 536p yesterday as BAE said the contract to create the successor to the Vanguard class would sustain 1,400 jobs on a programme that also supports more than 240 suppliers.

Tony Johns, managing director at BAE Systems’ Submarines, said: ‘Designing a new, nuclear-powered ballistic missile submarine is one of the most challenging engineering projects in the world today.

‘The Successor programme is the largest and most complex project we have ever faced. This funding will now allow us to mature the design over the next 12 months to enable us to start construction in 2016.’

BAE has been awarded previous contracts in 2012 valued at £328m and £315m to commence initial design for the submarine, which will carry Britain’s independent nuclear deterrent. The group is currently building the Astute class submarine – seven nuclear-powered attack boats – at its shipyard in Barrow-in-Furness.

Defence Secretary Michael Fallon said: ‘The UK has been committed to a continuous at-sea deterrent for more than 45 years. It is therefore crucial that we continue to invest in the Successor programme to be ready for a final decision on renewal next year.

‘It is thanks to our long-term economic plan that we are able to invest in this latest wave of design funding, which will help to secure the jobs of hundreds of people working across the MoD’s three main industrial partners working on the Successor programme. This underlines how important this work is to the British economy as well as the future security of the UK.’