DEAL OF THE CENTURY
UK defence firm wins contract worth £20bn for Australian warship fleet
AUSTRALIA has agreed to buy a fleet of British-designed warships worth £20billion, with the Prime Minister describing the deal as an ‘enormous boost for the UK economy’.
The huge vote of confidence in postBrexit Britain saw BAE Systems awarded the contract for nine frigates based on the UK’s cutting-edge design.
The order for the fleet of frigates – which will be built in Australia but using the Type 26 designed for the Royal Navy – was hailed as the ‘deal of the century’ by defence experts. It is the biggest naval defence contract agreed anywhere in the world over the last decade, and was chosen over rival bids from Italy and Spain.
It also sets the stage for a closer economic and defence partnership with Australia as Britain prepares to leave the European Union.
Last night No10 said the deal was the result of four years of ‘intensive’ work by the Government, including Theresa May holding talks with Australian prime minister Malcolm Turnbull at Chequers earlier this year.
But in an apparent snub to Defence Secretary Gavin Williamson – who travelled to Australia to drum up support for the UK’s bid – he was not mentioned by name in the announcement. The release from No10 instead quoted Defence Minister Guto Bebb.
It comes just days after Mr Williamson was reported to have threatened to ‘break’ the Prime Minister if she did not back his request for a major boost in defence spending.
But discussing the deal last night Theresa May said: ‘The sheer scale and nature of this contract puts the UK at the very forefront of maritime design and engineering and demonstrates what can be achieved by UK industry and Government working hand-in-hand.
‘We have always been clear that as we leave the EU we have an opportunity to build on our close relationships with allies like Australia. This deal is a perfect illustration that the Government is doing exactly that.
‘And while this is an enormous boost for the UK economy, it will
also cement our strategic partnership with one of our oldest and closest friends for decades to come.’
The deal was hailed in Australian as well. with broadsheet The Australian using the upbeat headline ‘Britannia rules waves: UK’s $35bn frigate win’.
The Australian government said the new warships would provide the country with the highest levels of lethality and deterrence in periods of global uncertainty.’
They will replace eight Anzac Frigates, which have been in service since 1996.
Experts say the latest success for the British giant could influence Canada, which is also planning to order warships later this year. And defence analysts said the deal represented a significant achievement for British naval exports. Francis Tusa, editor of industry newsletter Defence Analysis, told the BBC: ‘It is the deal of the century.’
He said the UK has had an ‘abysmal’ export record for warship sales in recent history but this represented ‘a massive sea-change’.
Work on the ships – which will be called the Hunter class – will create at least 4,000 jobs in Australia but will not significantly boost BAE’s employment numbers in the UK. The contract will however provide a huge boost for Britain’s export economy and military supply chain. The vessels will be built in Adelaide by government-owned ASC shipbuilding.
The 6,900 tonne multi-mission warships are designed to support anti-submarine warfare and air defence anywhere in the world. The first of Britain’s eight Type 26 warfare frigates are currently being built on the Clyde and are set to enter service with the Royal Navy in the 2020s.
International Trade Secretary Dr Liam Fox said the deal would also be a boost to Australia and the UK’s trading relationship, which is worth more than £13billion a year.