Rolls-Royce strikes £9bn nuclear submarine deal

A significant agreement has been reached for a new fleet of nuclear submarines, marking a major collaboration between the United States, the United Kingdom, and Australia. This deal, valued at £9 billion, represents the largest contract ever established between the Ministry of Defence and Rolls-Royce. Defence Secretary John Healey made the announcement during a visit to the Rolls-Royce nuclear reactor production facility in Derby. The contract, known as Unity, is set to last for eight years and is anticipated to create over 1,000 jobs in the UK while safeguarding an additional 4,000 positions. Healey emphasized the vital role that Derby plays in ensuring the safety of the United Kingdom, especially in light of increasing threats and aggression from other nations. Rolls-Royce is already in the process of expanding its submarine division, which includes the construction of new warehouses in Derby. The Unity contract aims to enhance the design, manufacturing, and support services for nuclear reactors, making them more efficient and environmentally friendly. The government has stated that this agreement will streamline previous contracts and incentives, leading to a more efficient delivery process and potential savings of £400 million. In addition to supporting the current Royal Navy submarine fleet, the Unity contract encompasses the construction and commissioning of new Dreadnought Class submarines and the initiation of contracts for the new Aukus defence alliance. In March 2023, the UK, US, and Australia agreed to collaborate on this new fleet of nuclear submarines, which will be built in both Britain and Australia, utilizing technology from all three nations. In 2022, Rolls-Royce established a new Nuclear Skills Academy in Derby, which is designed to provide 200 apprenticeships each year for at least a decade. Defence Secretary John Healey remarked that this deal would serve as an 'engine for growth' for the UK economy. During his visit, he highlighted the government's commitment to maintaining a strong nuclear deterrent, which includes the construction of four new nuclear submarines in Barrow-in-Furness, ensuring the UK's continuous at-sea nuclear deterrent, and delivering all necessary future upgrades. He stated, 'This investment in Britain's defence will deliver a long-term boost to British business, jobs, and national security. ' He further noted that this deal with Rolls-Royce, a historic British success story, will support high-skilled jobs in the UK, which are essential for equipping the submariners who keep the nation safe. Healey asserted that the defence sector can be a catalyst for economic growth while also providing better value for taxpayers. When questioned about the significance of Derby in the context of this deal, the minister responded that the city 'couldn't be more important. ' He praised Rolls-Royce as a proud British brand, recalling its history of producing engines for Spitfires that protected the UK skies. He stated, 'We are standing in the nuclear skills centre – a centre of excellence, not just in the UK but almost anywhere in the world. ' He expressed pride in having Rolls-Royce at the core of the UK's future defence plans. This announcement follows Healey's recent statement in Parliament regarding a Russian spy ship spotted in UK waters. He reassured the public that Britain is safe, thanks to the efforts of the Armed Forces. However, he cautioned that the nation faces rising threats and immediate aggression from Russia. Local MPs Jonathan Davies and Baggy Shanker also visited the academy to discuss the implications of the deal. Steve Carlier, president of Rolls-Royce Submarines, expressed delight at the Unity contract, affirming their commitment to the Royal Navy and the Defence Nuclear Enterprise. He stated, 'This long-term contract enables us to invest in the right skills, equipment, and facilities to play our part in protecting UK interests at home and overseas. ' Rolls-Royce Submarines is already expanding its Raynesway site and has begun moving into specially-built warehouses in Pride Park. Sharon Graham, general secretary of the Unite union, remarked that this announcement is positive news for British jobs, Derby, and the economy. Baggy Shanker described it as a great day for the city, highlighting the landmark nature of the deal between the government and Rolls-Royce. He added, 'It's important in protecting jobs, creating jobs, and it is a really good deal for UK taxpayers with a significant partnership announced which will make the deal more efficient for everybody.