The Secretary of State for Defence (Mr Philip Hammond)
I wish to inform the House that the Ministry of Defence has signed a contract, worth approximately £1.1 billion, with Rolls-Royce Power Engineering for an 11-year programme of work at its nuclear reactor core facility in Raynesway, Derby, including a major programme of site regeneration to replace facilities that have reached the end of their life.
Treaty obligations and security considerations necessitate the maintenance of an indigenous reactor core production capability to support the UK’s nuclear submarine flotilla.
Starting with the first UK nuclear submarine, HMS Dreadnought, all the Royal Navy’s nuclear reactor cores have been manufactured at the Rolls-Royce Raynesway site. After more than 50 years of service, the existing facilities at Raynesway have come to the end of their economic life and a regeneration of the Raynesway site is required to ensure the facilities continue to meet the safety standards set by the Office of Nuclear Regulation.
The site regeneration will cost approximately £500 million and involve the progressive demolition of the existing buildings and their replacement with new facilities on the same site.
The remaining £600 million will sustain reactor core production at the facility until March 2023. This will include production of reactor cores for the Astute class and the next generation nuclear deterrent Successor SSBN submarines if approved. This reflects the decisions taken in the strategic defence and security review and the parliamentary report “The United Kingdom’s Future Nuclear Deterrent: The Submarine Initial Gate”. The contract has an initial pricing period aligned with the Successor SSBN Main Gate.
These contracts will allow us to maintain this vital capability that underpins the nation’s long-term security, and will secure 300 jobs at Rolls-Royce.