BAE wins £20bn ships contract in Australia

BAE Systems has won a £20 billion contract to build a new generation of warships for the Australian navy in a major boost for the UK Government’s shipbuilding strategy.

The company will deliver nine anti-submarine frigates based on its Type 26 design over the next 30 years after beating competition from companies in France and Spain.

Construction of the vessels, named the Hunter class in Australia, will take place in Adelaide, but components will be built by BAE’S suppliers in the UK, securing jobs and expertise in the British shipbuilding industry.

The orders will also help drive down the cost of building the UK’S planned fleet of eight Type 26 vessels, with components becoming cheaper through bulk production.

Steel cutting only started on the first new frigate last year after delays that shipbuilding unions said put jobs on the Clyde at risk.

Finding export markets for the Type 26 design is a key feature of the UK’S new shipbuilding strategy. The announcement will also be hailed as an early success in the government’s plan to reach out to Commonwealth countries after Brexit. Shares in BAE rose more than 1 per cent on the announcement.

Prime Minister 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.”