HAMPSHIRE: £3.9 billion deal secures jobs but could also signal end of VT's links to shipbuilding THE green light for a long-awaited £3.9 billion order for two new aircraft carriers has secured hundreds of Hampshire jobs.

The move secures the future of Portsmouth Naval Base, which it had been feared could close in a review of naval facilities.

News that Portsmouth along with Devonport and Faslane will all remain open as Naval dockyards was greeted with relief. But there were warnings the bases would have to make efficiencies which it is feared will mean some job losses.

The carrier decision also pushes historic Hampshire naval name VT a step closer to ending its links with the shipbuilding industry. The Hedge End-based firm, which moved production from Southampton to Portsmouth in 2003, is to merge its shipbuilding operations with those of fellow Hampshire defence giant BAE Systems.

Both firms, which together employ more than 3,600 people in the county, will have equal control of the £1 billion joint venture but BAE will own 55 per cent of the as yet unnamed company.

The deal includes a clause to let VT sell its 45 per cent share after one year, although bosses said there were no plans to sell up until at least 2010.

However, a sale of the stake, worth at least £380m, is only a matter of time. A statement from the company said: "Ultimately, VT will pursue its strategy of becoming a pure support services provider."

Support services has long been the more lucrative side of the business. It sees the firm manage American defence bases, build schools in Greenwich and run career guidance services, among other activities.

Defence Secretary Des Browne told the Commons the new aircraft carriers - to be named HMS Queen Elizabeth and HMS Prince of Wales - were expected to be in service by 2014 and 2016 respectively.

Mr Browne said: "I am pleased to be able to confirm today that we will now place orders for two 65,000-tonne aircraft carriers to provide our front-line forces with the modern, world-class capabilities they will need over the coming decades."

"The creation of such a joint venture will enable the Royal Navy to work with industry to deliver the infrastructure the navy will need to support the fleet in the future while retaining all three of our existing naval bases at Portsmouth, Devonport and Faslane."

The carriers will now be built in sections at each location before being assembled in Scotland.

Paul Lester, chief executive of VT, said: "This agreement will create stability in the UK naval shipbuilding industry. It implements a major element of the Defence Industrial Strategy and will create a strong, combined UK naval shipbuilding company well equipped to compete on the world stage.

"VT looks forward to bringing its expertise to the new joint venture and we remain committed to the industry for at least the next three years."

BAE chief executive Mike Turner said: "This is a significant milestone for the UK maritime industrial sector and will help retain critical areas of expertise in the UK."

John Denham, Labour MP for Southampton Itchen, said: "Although VT has moved from Woolston to Portsmouth, many people from Southampton still work for VT and this announcement is good news."

Julian Lewis, Conservative MP for New Forest East, said: "Obviously it's a massive relief for everybody who is concerned about the future of the Royal Navy in general and the naval bases."