Rolls-Royce strikes £9bn nuclear submarine deal

A £9bn deal for nuclear submarine reactors has been agreed between the Ministry of Defence and Rolls-Royce – the biggest ever between the two.

Defence Secretary John Healey announced the agreement on Friday during a visit to the firm’s nuclear reactor production facility in Derby.

The eight-year contract, called Unity, is designed to make the design, manufacture and support services for reactors more efficient and environmentally friendly.

It is hoped it will create more than 1,000 UK jobs and safeguard 4,000 other roles.

The government said the agreement would streamline previous contracts and incentives, and provide more efficient delivery, leading to savings of £400m.

As well as providing support to the current UK Royal Navy submarine fleet, Unity includes the build and commission of new Dreadnought Class submarines and the beginning of contracts for the new Aukus defence alliance.

In March 2023, it was announced Rolls-Royce would provide the reactors for the new fleet of nuclear submarines in a defence agreement between the UK, US and Australia.

The submarines will be built in Britain and Australia but use technology from all three countries.

The company opened a new Nuclear Skills Academy in Derby in 2022, designed to provide 200 apprenticeships each year for at least a decade.

Healey used the visit to highlight the government’s “triple lock” on the nuclear deterrent, which includes building four new nuclear submarines in Barrow-in-Furness in Cumbria, maintaining the UK’s continuous at sea nuclear deterrent and delivering all future upgrades needed.

He said: “This investment in Britain’s defence will deliver a long-term boost to British business, jobs and national security.

“In line with our Plan for Change, this deal with Rolls-Royce, a historic British success story, will support high-skilled UK jobs, who equip the thousands of submariners that keep us all safe.

“We are showing defence can be an engine for growth, while also driving better value for taxpayer money.”

Steve Carlier, president of Rolls-Royce Submarines, said: “We’re delighted to announce the Unity contract, which confirms our commitment to the Royal Navy and the Defence Nuclear Enterprise.

“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 doubling the size of its Raynesway site and has recently started moving into specially-built warehouses in Pride Park.

General secretary of the Unite union, Sharon Graham, said: “This announcement is good news for British jobs, good news for Derby and good news for our economy.

“Rolls-Royce has a world class workforce and the government is right to invest in it.

“UK defence spending must be used to promote decent quality jobs and skills and to protect our manufacturing base.

“The government must now follow the same principles when making major defence spending decisions in future, including on fast jet planes and Army helicopters.”