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Chancellor raises job hopes with aircraft carrier hints

Richard Moss | 13:45 UK time, Sunday, 17 October 2010

Tornado bomber

The two new aircraft carriers may be safe but a decision to ground some of the UK's Tornado bombers may hit Northern RAF bases

So it now looks likely the contracts to build two new aircraft carriers are safe.

The Chancellor, George Osborne, hinted as much today when he revealed that it would probably cost more to cancel the orders than to plough ahead.

That will be a huge relief to the companies in the North relying on the work.

A&P in South Tyneside, Darchem in Stillington and Hertel Services in Billingham would all have been hit if the Government had decided to cancel.

But that does not mean the announcements on defence spending we'll see over the next few days will be be pain-free for the North.

BAE Systems in Newcastle will be watching particularly closely.

They're a company that has already taken a hit in jobs and orders in the last year - it's already shedding around 200 jobs.

Ideally they need to get some fresh orders for Challenger Tanks or armoured vehicles.

Both though look unlikely.

And without new business the company has already hinted that the future of the whole site could be in doubt.

And a possible decision to make cuts to the UK's Tornado bomber fleer may also have implications for the North.

David Bowles from Northern Defence Industries - which represents many of the companies dependent on the review - said as much in the Politics Show today.

He thinks the Tornado cuts could affect bases such as RAF bases at Leeming, Linton-on-Ouse and Church Fenton in North Yorkshire.

A decision to withdraw some troops from bases in Europe back to Britain could though benefit the army base at Catterick.

It could yet grow, putting potentially more money into the local economy.

So the last-minute wranglings we've heard about in the Ministry of Defence over the precise level of cuts could well have been crucial in deciding the fate of jobs in the region.

A one per cent difference either way in the defence budget may not be critical in cutting the deficit, but it could make or break some of the companies that work in the sector.

We're expecting some broad brush decisions tomorrow, with the detail released on Tuesday.


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