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04/11/2010
Carrier Contracts 'Deeply Flawed'
A senior MP has spoken out regarding the Government's plans to build two new aircraft carriers.
Andrew Tyrie, the Chairman of the Treasury Select Committee said BAE "put a gun to the head of the government" over "deeply flawed" contracts to build two new aircraft carriers.
The claim was made after he received a letter from Chancellor George Osborne.
The MP said the defence company threatened "dire consequences" if the contracts were not honoured.
Mr Osborne has stood by his claim that it was cheaper to build the aircraft carriers than scrap the contract made under the previous government.
In the letter, written by the Chief Executive of BAE to Prime Minister David Cameron, it suggests a cost of £5.25 billion to complete the build, or £4.8 billion with additional costs of £690m to cancel the contract.
Upon rebuffing claims his spending plans are based on unrealistic efficiency savings, Mr Osborne highlighted the letter when giving evidence to the committee.
The opportunity was used to confirm the date of the next budget planned for March 23 2011.
Recently the Public Accounts Committee (PAC) has admitted having "grave concerns" regarding effiency savings hitting frontline services.
However Mr Osborne described his plans as "credible and deliverable" and added the Treasury would remain "absolutely on the case" to make sure productivity improves.
(BMcN/GK)
Andrew Tyrie, the Chairman of the Treasury Select Committee said BAE "put a gun to the head of the government" over "deeply flawed" contracts to build two new aircraft carriers.
The claim was made after he received a letter from Chancellor George Osborne.
The MP said the defence company threatened "dire consequences" if the contracts were not honoured.
Mr Osborne has stood by his claim that it was cheaper to build the aircraft carriers than scrap the contract made under the previous government.
In the letter, written by the Chief Executive of BAE to Prime Minister David Cameron, it suggests a cost of £5.25 billion to complete the build, or £4.8 billion with additional costs of £690m to cancel the contract.
Upon rebuffing claims his spending plans are based on unrealistic efficiency savings, Mr Osborne highlighted the letter when giving evidence to the committee.
The opportunity was used to confirm the date of the next budget planned for March 23 2011.
Recently the Public Accounts Committee (PAC) has admitted having "grave concerns" regarding effiency savings hitting frontline services.
However Mr Osborne described his plans as "credible and deliverable" and added the Treasury would remain "absolutely on the case" to make sure productivity improves.
(BMcN/GK)
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