UK agrees £9 billion nuclear submarine deal with Rolls-Royce

Britain's government on Friday announced a deal with engine-maker Rolls-Royce to support the Royal Navy's fleet of nuclear submarines, seen as boosting economic growth and national security.

The multi-year contract with the British company, worth £9 billion ($11 billion), is expected to create more than 1,000 UK jobs and safeguard 4,000 more, the Labour administration headed by Prime Minister Keir Starmer said in a joint statement.

Labour has put growing the UK economy at the forefront of its plans since returning to power in July -- but has yet to deliver on its pledge.

"This investment in Britain's defence will deliver a long-term boost to British business, jobs and national security," Defence Secretary John Healey said ahead of visiting Rolls-Royce's nuclear reactor production facility in Derby, central England.

"We are showing defence can be an engine for growth, while also driving better value for taxpayer money."

He added that "national security is a foundation of our government's plan for change, and this is a clear demonstration of our commitment to the UK's nuclear deterrent, which is our ultimate insurance policy in a more dangerous world".

The government said the deal results "in better value for money for the taxpayer through savings of more than £400 million".

Steve Carlier, president of Rolls-Royce submarines, said the eight-year contract enables the company "to invest in the right skills, equipment and facilities to play our part in protecting UK interests at home and overseas".

The deal comes after Britain and Germany -- Europe's biggest spenders on defence -- announced in October that German submarine-hunting planes would operate out of Britain under a "milestone" agreement.

Ahead of Donald Trump's inauguration, British Foreign Secretary David Lammy said the new US president and Vice President JD Vance are "simply right when they say that Europe needs to do more to defend its own continent".