THE government is on the verge of announcing that the cost of the UK’s controversial aircraft carrier project is set to balloon above £6 billion, according to reports.
The latest increase means the bill for the 65,000-tonne ships will be almost double the £3.5bn estimated when the programme was agreed by the last Labour government in 2007.
Defence Secretary Philip Hammond told MPs yesterday that he will soon make an announcement on the new cost of the Queen Elizabeth class carriers which are reportedly set to rise by another £800 million to £6.2bn.
It comes amid fears that one of the two shipyards on the Clyde may be shut by BAE Systems as the defence contractor looks to make savings.
Mr Hammond is expected to attempt to deflect concerns about the rising costs by announcing that he has re-negotiated the project to build the carriers on terms more favourable to the taxpayer.
He is expected to say that further cost overruns beyond the new £6.2bn baseline will be split 50-50 between the Ministry of Defence and the contractors. Previously they had fallen mainly on the government.
The issue erupted during defence questions in the Commons yesterday when Labour’s new shadow defence secretary, Vernon Coaker, used his first appearance in his role to attack the government’s handling of the contracts.
He reminded the House that the cost had already gone up £100m because of the government’s U-turn over which jets to fly off the aircraft carriers which will not be in service until the end of the decade at the earliest.
Mr Coaker said the UK government needed to explain the reason for the cost increase.
“This is the latest in a series of financial fiascos in the MoD under David Cameron,” he said.
“Last year, the government wasted £100m by changing its mind about the type of fighter planes it was ordering for the aircraft carrier and reverting to Labour’s plans which it said were more cost-effective.
“The Defence Secretary’s claim that he has balanced the MoD books looks increasingly nonsensical. Britain deserves better than this shambolic approach to our nation’s defence.”
Mr Hammond replied: “If I were you I’d tread a little bit carefully around the issue of costs of the aircraft carriers until you hear in due course what precisely we have done.”
An MoD spokesman said: “Negotiations between the MoD and the Aircraft Carrier Alliance regarding the re-baselining of the Queen Elizabeth Carrier Programme are at an advanced stage. No final decisions have been taken and the department will make an announcement in due course.”
Meanwhile defence ministers came under intense pressure from across the parties to urgently review the UK’s lack of a maritime surveillance aircraft.
Conservative former defence minister Sir Gerald Howarth said: “The loss of the maritime patrol aircraft capability is the most serious loss we face.”
And SNP defence spokesman Angus Robertson said: “The UK’s armed forces are unique among those in northern Europe in having not a single fixed-wing maritime patrol aircraft.”