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LONDON - Britain said on Friday it had awarded Rolls-Royce a 9 billion pound ($11 billion) eight-year contract to design, make and provide support services to nuclear reactors that power its fleet of submarines.
The deal will strengthen the Royal Navy's continuous at-sea deterrent - under which at least one nuclear-armed ballistic missile submarine patrols the seas at all times - while also boosting the AUKUS defence pact with the United States and Australia, Britain's Ministry of Defence (MOD) said.
Defence Minister John Healey said the contract with Rolls-Royce, which also makes engines for aircraft, would save Britain 400 million pounds over eight years by combining multiple contracts into one.
"It's a boost to British jobs, British business. It's a boost to our nuclear deterrent," he told Sky News on Friday.
The new contract, called Unity, will also support work on the Dreadnought class of nuclear submarines which are currently being built, and is expected to create 1,000 jobs and safeguard 4,000 others, the government said.
"It really shows the way that defence is part of the engine for economic growth in this country," Healey said on a visit to Rolls-Royce's nuclear reactor production facility in Derby, central England.
Britain's defence industry is awaiting the government's Strategic Defence Review, which Healey said on Friday was still due to be published in the spring after speculation it could be delayed.
The government has said it will increase defence spending to 2.5% of gross domestic product (GDP), after NATO called on members to increase budgets to meet threats from Russia.
Britain's nuclear submarine industry, lead by BAE Systems , will expand in the coming years as new boats are built for the UK, and also Australia under the AUKUS security pact.
($1 = 0.8119 pounds)
(Reporting by Sachin Ravikumar, additional reporting by Sarah Young Editing by Mark Potter and Paul Sandle)