§ Sir Jim SpicerTo ask the Secretary of State for Defence what is his latest estimate of the cost of the Trident programme; and if he will make a statement. [21359]
679W
§ Mr. PortilloThe current estimate of the total project cost of the Trident programme, with all expenditure, including payments already made, brought up to current prices and the exchange rate assumed in the long term costing of the defence programme is £12,153 million. If payments already made are expressed at the prices and exchange rates actually incurred, with future spend on constant bases, the equivalent estimate is now £9,926 million. Expenditure on the Trident programme to 31 October 1995 represented some 83 per cent. of the latter estimate.
The revised estimate of £12,153 million represents an increase in cash terms of £471 million. After allowing for the effects of inflation and exchange rate variations there is a real cost increase of £112 million, or less than 1 per cent. Despite this variation since last year, the programme continues to show an overall reduction in real terms on its original 1982 estimate. This reduction, including the savings resulting from the decision to process missiles at the United States facility at King's Bay Georgia now stands at some £3.4 billion.
The proportion of the estimate for work undertaken in the United Kingdom has increased from 71 per cent. to 72 per cent. reflecting the effects of the change in exchange rate, price base and volume changes in the year.
I am pleased to confirm that HMS Victorious, the second of the four planned Vanguard class submarines, entered service on time at the end of last year and is now operational. The remainder of the Trident submarine programme is also still on schedule. I am, as in previous years, sending to the Chairmen of the Public Accounts Committee and of the Select Committee on Defence a more detailed report on the programme. I am also placing a copy of this report in the Library of the House.