David Robertson and Michael Evans
Win luxury hampers plus Waitrose vouchers & guidebooks
The Ministry of Defence (MoD) and the Treasury will agree to finance equipment projects worth more than £30 billion this week, as the Government wraps up negotiations on the military’s budget, The Times has learnt.
Defence chiefs expect to conclude their department’s comprehensive spending review this week, Armed Forces’ pay the only outstanding issue to be resolved.
Completion of the MoD’s budget will trigger an announcement by Gordon Brown, the Prime Minister, confirming that the Royal Navy will build two aircraft carriers worth £3.8 billion.
Government sources said that Downing Street was pushing to make the carrier announcement by the end of this week, which in turn would allow BAE Systems and VT Group to complete the merger of their shipbuilding assets.
This would create a £1 billion company, expected to be led by Sir John Parker, the chairman of National Grid Transco, with docks in Portsmouth and on the River Clyde in Glasgow. It would be 55 per cent owned by BAE, with VT holding the rest.
The defence budget also contains provision for six Royal Navy destroyers worth £3.6 billion. BAE and VT, which are building the destroyers, have launched two of the ships already and began work on the remaining four without a fixed contract. However, a proposal to build a further two of the Type 45 destroyers has been axed from the MoD budget.
In addition, the head of the Army has won a pledge from ministers to provide a new generation of armoured vehicles to give better protection for troops in overseas war zones, developing a family of “battlefield taxis” capable of surviving roadside bombs. Whitehall sources had indicated that there would have to be cuts in the MoD equipment programme and the Army’s plans for new armoured vehicles, the Future Rapid Effect System (FRES), appeared to be in doubt. However, sources said that Baron Drayson of Kensington, the Defence Equipment Minister, is now “totally aligned” with General Sir Richard Dannatt, the Chief of the General Staff, over the need for the new armoured vehicles. He has stated that the proposed in-service date of 2012 for the first batch is “non-negotiable”.
The Army’s FRES system is intended to replace many present armoured vehicles, such as Saxon, which have been in service for decades and no longer protect soldiers in Iraq and Afghanistan from sophisticated improvised explosive devices. The dangers are so great, particularly from Iranian-supplied “explosively formed projectiles” that hurl copper slugs at up to 5km per second, that the MoD has had to spend £500 million on interim measures in order to beef up armoured protection in Iraq and Afghanistan.
With FRES apparently saved from future defence equipment cuts, BAE Systems and its rival companies in the United States are competing for the huge contract that could be worth £50 billion over the 30-year lifetime of the new armoured vehicles.
The first phase of the FRES programme will involve the purchase of 120 “utility” vehicles – the battlefield taxis that will be used for ferrying troops around in war zones such as Iraq and Afghanistan.
There will eventually be nine different versions of this utility model. Because of the tight deadline for the first 120 vehicles, BAE Systems has acknowledged that there will be nothing available in the United Kingdom in that time, which means that the British defence company will have to turn to a foreign manufacturer for the basic frame. There are suitable, existing programmes in the United States, Germany, Canada, France, Switzerland and the Netherlands.
The Army wants to buy 2,000 battlefield taxis and another 1,000 heavier vehicles, which will replace or complement the existing Warrior infantry fighting vehicle.
Other systems to be replaced include the Scimitar and Spartan reconnaissance vehicles.
Read the training tips and advice that helped our London Triathletes
Times Online's new TV show helps you make the right decisions for your pet
Read our exclusive 100 Years of Fleming and Bond interactive timeline, packed with original Times articles and reviews
The latest travel news plus the best hotels and gadgets for business travellers
Shortcuts to help you find sections and articles

Overseas contacts and local business information

Find a course, arrange a game and save money
2007
£47,995
2008
£42,945
06/2006
£40,850
Great car insurance deals online
£33,000
Macmillan Cancer Support
Central/South West
£50k
NHS
Nationwide
£
£30k OTE
Meltwater News
Nationwide
circa £70k
Central Office of Information
London
5% below developer pre-launch price!
Luxury Appts, beautiful gardens w/ Thames views
Great Homes Available on a shared Ownership Basis
Great Investment, River Views
Visit the ‘entertainment capital of the world’
at great sale prices!
Christmas Cruises
From only £995pp
APTs East Coast now from only
£2425pp.
Great travel insurance deals online
Contact our advertising team for advertising and sponsorship in Times Online, The Times and The Sunday Times. Globrix Property Search - find property for sale and rent in the UK. Visit our classified services and find jobs, used cars, property or holidays. Use our dating service, read our births, marriages and deaths announcements, or place your advertisement.
Copyright 2008 Times Newspapers Ltd.
This service is provided on Times Newspapers' standard Terms and Conditions. Please read our Privacy Policy.To inquire about a licence to reproduce material from Times Online, The Times or The Sunday Times, click here.This website is published by a member of the News International Group. News International Limited, 1 Virginia St, London E98 1XY, is the holding company for the News International group and is registered in England No 81701. VAT number GB 243 8054 69.
Having warships with 8 times the capability of a T42 is all very well but if one is lost in combat, that's a massive blow to the Task Group/Force. Greater numbers are also important when you consider that a single platform may be all that's required for a task. If all your eggs are in one (okay then, six) baskets, there's less influence on the worlds shipping lanes etc.
Roger, Aldershot, UK
A way round having a mere 6 type 45s would be to put the Aster missile & Samson system on the carriers thus on most occassion Type 23s could be the escorts. Also the RAFs 3rd tranche of Eurofighters should be cancelled and the funds diverted to the Navy creating a full size FAA with enough pilots to fly 150 JSF's or Rafales. At the same time the Navy could take over the air defense of southern England (radical but the overal cost should be less than the current plan)
Keith, Derby,
At last naval air power is recognised as the primary projection of influence and protection. Shame the catapults have been scrapped from the carriers i.e. fly with normal load over shorter range (limited range of operations) or fly with less load over normal range (less effective; more sorties required; extra operational cost and extra RISK to pilots and extra time). The RAF should have been reduced and part of its budget given to the navy. In modern terms its cumbersome to have to operate from fixed airfields, several square miles in size and from known locations.
The Tories did no better; a few days before the invasion of the Falklands they had taken the decision to scrap two of our three carriers - that would have been disastrous. Also, remember their armed forces slogan "smaller but better"?
Sea operations are vital; to provide flexibility in military operations but also to protect all the stuff thats hauled by sea, which is how most stuff is transported.
Jack Sprat, Bristol, UK
who said anything about 6 destroyers and 8 frigates? In my opinion, the RN will probably end up with 20 proper escorts.
Britain is modernising its armed forces and numbers mean very little in this hi- tech era - any nation can build fifty or sixty cheap corvettes and and call them proper escorts, but they would be kidding themselves. Consider that 1 type 45 is said to be more capable than all 8 type 42s put together and the RN is getting at least 6 type 45s.
Then you have the amphibious capability - The RN now has the ability to lift the entire 3 Commando Brigade, it couldn't have done that 25 years ago. All this together with the new proper carriers, 2 maybe 3 LPH helicopter carriers) carrying apache attack choppers, the Astute subs with their block IV tomahawk capability, makes the RN very strong force indeed. The generals in '82 fancied their chances against the old cold war RN with its plentiful numbers, but I can assure you they wouldn't dare take on the RN of tomorrow.
Michael, Brisbane, Australia
I have to say that our Canadian friend has hit it on the nail. - although his maths are slightly out. As currently planned the RN will have 13 Type 23s and 4 Type 22s, totaling 17 frigates, not the 8 he suggests. In addition 6 new Type 45 air defence destroyers will replace the 8 Type 42s remaining in service, giving a total of 23..Sadly it would appear that the Navy has been forced to make a hard choice between loosing the carriers, or loosing the additional 45s, and the right decision has been made. Without the carriers the RN has no future, and they know it. For the type of operations we do today the carrier has got to be the vehicle of choice, allowing air operations free from reliance on land locked bases, and without constant threat of attack from rocket, mortar or suicide bomb The problem is that with only 6 Type 45s, and knowing the RN as we do, 2 will be unavailable at any one time in refit or maintainance, leaving only 4 available to task. This is surely just too tight?
Matthew Haines, London, UK
Having only 6 destroyers and 8 frigates is unthinkable for the Royal Navy, even Canada has 12 frigates and 4 destroyers. It would be downright embarassing for a former colonial power to sink beneath it's colonies.
Jeffrey , Burnaby, Canada
Could the fact that one of the shipyards is in Scotland have anything to do with the spin for this announcement on the building of 2 aircraft carriers so soon after our Scottish PM has come to power?
Harvey, Nottingham,
The two new carriers and shrinking of the fleet could be the best thing to happen to the Royal Navy in a very long time.
We no longe have hundreds of merchant vessels that need protection from hundreds of enemy frigates, so we dont need hundreds of frigates to patrol the world to protect them.
What would be useful, is a few carriers (we're getting two) and the destroyers and frigates to protect them (which we have and are getting)
2 carriers, 4 destroyers and 8 frigates is a small but very powerful navy, that serves a purpose, sail someone and bomb someone into submission.
A selection of 80 or 90 frigates destroyers and cruisers cannot boast the same effect.
Dominic, Manchester, UK
The FRES project is fundamentally flawed in that requirements are too broad and the vehicle has to be capable of airlift in an A400M transport plane. Given the armour weight needed to protect troops against large explosive devices found in Iraq it is difficult to see how a workable solution can be found. I'm also concerned the vehicles will be wheeled, not tracked like the FV430, Spartan etc, and this may limit usefulness in rough terrain and survivability.
The aircraft carriers are a sensible contribution to UK and EU power projection capability. However they will lack adequate supporting ships if there are to be only 6 type 45 destroyers. These destroyers are not revolutionary, the US has had this capability for decades and furthermore many of the systems deployed on the Type 45 are the same as on the old ships it replaces (Phalanx, 114mm gun). A pity, the technology was available to fit a 155mm gun and cruise missile compatible launchers to broaden capability and safety.
Stephen Bathgate, Edinburgh, UK
I agree with Brian. Labour have done little for the Armed Forces throughout their time in power - the "skeleton crew" that was the Royal Navy has had its arm bones taken away, the vast majority of ship building programmes they boast of were actually ordered or developed in conservative power - 6 ships isnt enough escort! and to add to that they cancelled the FSC.. to sum up: labour have kicked the RN repeatedly around the face and ribs when it was already on its knees.
Lucky for the army (who's needs are both cheaper and in the limelight far more than the RN) they managed to convince the government that a desperately needed vehicle programme wasnt to be cancelled - says it all doesnt it; even a high-priority programme to replace dinosaur-vehicles isnt safe from the dreaded axe.
Ross Hobson, Baldock, UK
Brian, you may not realise this but just about every major country has national debt.
To pick some examples, France's is 64.7% of GDP, as is the US'. Japan's is 175.5% of GDP. Even China has a debt of around 23%.
The UK's is 42.2%. Nothing to be proud of, but a lot better than many OECD countries. If we're in trouble, so is most of the world.
Francis, Bristol,
The time it has taken/will take to get the 2 carriers into the water (assuming they don't get cancelled before they are completed, which is very likely), is longer than the 2 world wars put together.
And will they have enough supporting ships with the mothballing plans? And enough people to man them (or should I say people them these days?) with the idiotic deferred promotion plans: now there's a great morale booster.
Presumably the hidden powers have got to Brown and Milliband to staunchly say the UK will continue to support the US alliance. Mind you, what choice have they got? Given a choice between "Europe" and the US alliance I would choose the latter every day.
Gerry Watts, Hobart, Tasmania, Australia
But the government has not got £30 billion. It has £2 trillion of debt. Why do we have to learn economics and correct accounting the hard way.
Brian Gilbert, Hampton, m