Carriers delay could hit jobs in shipyard

Defence Secretary Geoff Hoon has revealed that Ministry of Defence officials will spend an extra nine to 12 months assessing the £3bn deal for the construction of the two vessels.

Tyneside yard Swan Hunter is due to carry out a third of the fabrication work and expects to double its workforce to 3,000.

But if the eight-year contract's start date is pushed back to 2007, the yard will face a two-year period without orders.

The firm's chairman, Jaap Kroese, has warned that he might mothball the yard unless he can win a steady flow of work.

The chief executive of Northern Defence Industries, David Bowles, said last night: "Any delay in shipbuilding is a concern, not just for the industry in the region, but for UK shipbuilding.

"The more delay there is, the less capability and capacity there will be and, at the end of the day, that means jobs.''

The carriers - to be called HMS Queen Elizabeth and HMS Prince of Wales - are expected to be the most powerful warships built in the UK.

The target date for them entering service is 2010 and 2015 respectively.

Mr Hoon announced in a Commons written statement that the extended assessment period, which would put back the date contracts are finalised to some time next year, was needed.

"By spending the right amount of time and money in the assessment phase, we will gain a better understanding of the technical and supply side risks before we make any major commitments.''

BAE (formerly British Aerospace) and French firm Thales UK will work with the Ministry if Defence to oversee the project.

Swan Hunter is due to complete its £80m work on the Lyme and Largs Bay ships for the Royal Fleet Auxiliary at the end of next year.

The firm is worried that it will be left with a gap between the end of that contract and the start of work on the carriers and will have to lay off workers.

Overall, the carrier contract is said to be likely to provide work for 10,000 people nationally at its peak.