The decision, announced by Defence Secretary Des Browne in Parliament , will see two new ships in service by 2014 and 2016 respectively. The aircraft carriers will be named HMS Queen Elizabeth and HMS Prince of Wales. Admiral Band said:
"This confirms the Government's intended policy to maintain the Royal Navy as a global force with the ability to take air power anywhere around the world."
Referring to the Royal Navy's capabilities, Admiral Band added:
"If you want a 'Premier Division' Navy, just like a football team, then you've got to have the players. Whilst current operations clearly need to be our priority, the government sees the need to invest in the future."
This unique project will be a very considerable test of the UK maritime shipbuild industry. It creates a through-life entity managing major surface warships from design to disposal. The order will be placed with an alliance of companies (including the Joint Venture) and will cost around £3.9Billion, although the alliance and MOD have agreed to work together to reduce this figure before a final price is settled in 2009.
The announcement of the Joint Venture, together with the decision on Carriers and the Naval Base Review, allows the delivery of the most cost-effective and efficient long-term support to the Royal Navy. Whilst all three Naval bases will be optimised to improve performance and relevant capabilities, thre future of Portsmouth Naval Base is secure for the immediate future as this is where the aircraft carriers will be officially based.
Lord Drayson explained:
"When I launched the Defence Industrial Strategy in December 2005 I said that 2007 was the year in which I wanted to see results. Today's announcements deliver just that. Confirmation by BAE Systems and VT of the creation of a Joint Venture, brings together both surface ship build and support, and provides exactly the through life provider we identified as necessary in the Defence Industrial Strategy and marks a major step in the creation of a globally competitive UK maritime industry.
"The Defence Industrial Strategy is first and foremost about clarity from government allowing industry to deliver value for money. The announcement today of this very significant new warship order together with the formation of the BAES/VT Joint Venture go a long way to clarify the future for UK naval shipbuilding over the next 10 years, even down to saying what will be built in which yards, and to delivering the capability we need in the naval sector against clear time and cost goals."