The deal, including an 11-year refit of the UK’s sole submarine propulsion reactor factory at Derby in central England, would protect 300 Rolls-Royce jobs and many others at suppliers elsewhere, the source said. Defence secretary Philip Hammond confirmed the plan in an interview with the BBC yesterday.
The government is split over plans to replace, at an estimated cost of around £25bn, Britain’s four nuclear Vanguard submarines when they retire from service in the 2020s.
The Conservatives want a new fleet of submarines that will continue to carry the Vanguard’s Trident missiles and maintain Britain’s independent nuclear capability.
But the Liberal Democrats are pushing for cheaper and less destructive alternatives, arguing that the current capability – the ability to obliterate Moscow – is an outdated hangover from the Cold War.
The two parties have postponed a final decision till 2016, after the next parliamentary elections, while agreeing in the meantime to fund advance work to allow the submarines to be built on time if the go-ahead is given.
The government said last year it expected to spend £3bn by 2015 on preparatory work for the new submarine fleet. The deal to be announced today also includes a contract to build the reactor for the last of seven Astute class nuclear-powered attack submarines.
Last month Hammond announced £350m of contracts, mainly with contractor BAE Systems, to design the Vanguard successor submarines.