What price defence?

New government procurement rules mean that Brit military contractors won't be playing their home games unopposed. Dominic O'Connell reports.

As Tony Blair strode on to the stage in Davos for his headline-grabbing address to the World Economic Forum earlier this year, one of his Cabinet ministers was convening a decidedly less pleasant meeting in his Whitehall office. Geoff Hoon, then Blair's defence secretary, had summoned the three most powerful men in the British defence industry to settle a row that threatened to blight one of the UK's biggest defence projects in decades.

The Royal Navy wanted to buy two new aircraft carriers, ships that would cost more than £3 billion to build and another £6 billion to maintain.

If they were to be in service to replace the current ageing ships as planned in 2012 and 2015, the Ministry of Defence and its contractors needed to crack on. Instead, the procurement process had stalled, beset by wrangles over the budget and which company would be in charge of the ships' construction.

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