An additional £1 billion is to be invested into the UK defence supply chain by the Australian Government. They have chosen BAE Systems to manufacture nine warships for the Royal Australian Navy, of British design. Valued at £20 billion in total, this agreement has been labelled as the biggest naval ship deal for over a decade.
Prime Minister Theresa May commented that “the sheer scale and nature of this contract puts the UK at the very forefront of maritime design and engineering, and demonstrates what can be achieved by UK industry and government working hand in hand”.
A major boost to defence supply chain opportunities
The deal represents a major opportunity and boost to businesses throughout the UK defence supply chain.
Francis Tusa, editor of industry newsletter Defence Analysis, noted that it would not only be BAE Systems that would benefit from this deal, as “small and medium-sized UK companies would be likely to win orders for some of the technology required on the Australian ships”.
A working partnership
This agreement will have a profound effect on the working relationship between Australia and the UK. Defence Secretary Gavin Williamson said: “This is the dawn of a new era in the relationship between Australia and Great Britain, forging new ties in defence and industry.”
International Trade Secretary Liam Fox also commented: “The UK and Australia already enjoy a strong trading relationship worth more than £13 billion a year. Today’s announcement is a further boost to this relationship which will create significant opportunities for companies in both countries to deepen their trading ties.”
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