13 Nov 2014 - By
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MOD investigating warship procurement in France

contract_5206645MedSummary: The MOD is considering moving the contract to build new Type 45 Frigates abroad in a bid to save the taxpayer money, according to recent reports.

The news comes after the MOD and defence contractor BAE Systems have begun a dispute over the terms of the contract for the frigates.

The contract for the ships had been awarded to the BAE Systems’ Govan shipyard at a value of £4bn. If the contract is removed, it could cost the local area 11,000 jobs.

If the Royal Navy goes abroad for warships it will be the first time it has done it in peace time and would break a key pledge made to Scottish voters by the UK government during the recent independence referendum.

In July this year, then Defence Secretary Philip Hammond stated that shipbuilding contracts would stay in Scotland, a statement which became a key argument for Scots voting No in this year’s independence referendum.

Mr Hammond said: “Contracts are already placed, the seal is set on that whatever happens and the Prince of Wales will be assembled [in Glasgow].”

Defence Secretary Michael Fallon said that the award of the contract was dependent on Scotland’s place in the UK following this year’s independence referendum, saying that “UK warships are only built in UK shipyards” and that a Yes vote in the independence referendum would mean the contract could not be given to Scotland due to its status as a ‘foreign country’ after independence.

The MOD has since accused BAE Systems of using these promises as an excuse to increase the price of the build.

However, if the MOD cancels the contract it could be at risk of legal challenge.