UK to award contracts for work on nuclear subs

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Britain is set to announce this week the award of 350 million pounds ($560 million) of contracts for design work on new nuclear-armed submarines, a government official said a move that may cause friction in the coalition government.

The decision signals that Prime Minister David Cameron’s centre-right Conservatives remain committed to acquiring a costly new nuclear submarine fleet despite calls from their junior Liberal Democrat coalition partners to consider a cheaper alternative nuclear deterrent.

The government will announce which companies have won the 350 million pounds of contracts for initial design work on the submarines this week, a British government official at the NATO summit in Chicago said, speaking on condition of anonymity, Reuters reports.

The official declined to say which companies had won the contracts but said they would go to British companies and safeguard or create 1,900 jobs in Britain’s submarine-building industry, which is dominated by defence giant BAE Systems .

Britain currently has four Vanguard class submarines carrying Trident nuclear missiles but the vessels are due to go out of service in the 2020s.

The Conservatives want to build a new class of submarines to carry Britain’s nuclear deterrent at a cost of around 25 billion pounds, even though spending on non-nuclear defence and other government departments is being slashed to rein in a big budget deficit.

The centre-left Lib Dems have argued for cheaper alternatives, such as putting nuclear missiles on existing Astute submarines.

In a gesture to the Lib Dems, whose support has plunged since the coalition was formed after the 2010 election, the government announced last year it would study the feasibility of alternatives.

The government’s decision to award the contracts signals it is wedded to a like-for-like replacement for its existing nuclear deterrent regardless of what the study may conclude.

British Defence Secretary Philip Hammond said last week his department had fixed a 38 billion pound “black hole” in the defence equipment budget that the government says it inherited from its Labour predecessor and did not expect to make further cuts to the armed forces.

He set out plans for a defence equipment programme of 152 billion pounds over 10 years which he said included funding for a new class of nuclear submarines.

The government has already announced that the main spending decision on the new generation of submarines will be delayed until 2016, after the next national election, in another gesture to Lib Dem sensitivities on the issue.