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FT reveals problems with Trident renewal

Two articles in the Financial Times provide a new insight into the problems facing the Government’s plan to renew Trident. Both are written by Peggy Hollinger, the paper’s Industry Editor. The front page of the paper says that the Cabinet are considering nationalising the nuclear submarine part of Rolls Royce. The company has issued five profit warnings in two years and there are fears of a foreign take over. Defence Procurement Minister Philip Dunne said the government was “concerned that Rolls Royce ... is capable of performing its nuclear obligations”.  

 In a second article Ms Hollinger explains that, in addition to these financial concerns, Rolls Royce have been unable to recruit the specialist engineers that would be needed to produce a new reactor for the Trident replacement (Successor) submarine. She quotes Philip Dunne as saying that the new £41 billion estimate of capital expenditure was “the first really rigorous estimate of costs”.  This means that the earlier much-repeated figures, £11-14 billion at 2006/7 prices, were not rigorous.   The FT report suggests that the two main contractors, Rolls Royce and BAE, have not been working as a team in partnership with the government and says Philip Dunne has “fired a warning shot” across their bows. 

The Strategic Defence and Security Review (SDSR) announced a dramatic rise in costs from £25 billion to £41 billion, including a new £10 billion contingency. This is only the initial capital expenditure on acquisition and does not include running costs.  Crispin Blunt, the Tory MP who chairs the Foreign Affairs Committee, recently said that the through-life costs would be £167 billion.

The  SDSR also revealed that the project had slipped back several years. The first submarine had originally been due to enter service in 2024.  In 2010 the date was put back to 2028. The SDSR said that the in-service date was now in the “early 2030s”.

John Ainslie, Coordinator of Scottish CND, said

"The plan to renew Trident is setting a new benchmark for MOD incompetence, with cost increases and delays that surpass previous bungled defence projects. It is now clear that for 8 years a succession of Government ministers have repeated expenditure estimates that were no more than wishful thinking." 

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