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Confusion Reigns Over 'Royal Yacht' Costs After MoD Contradicts No.10 Over Who Is Paying

Confusion Reigns Over 'Royal Yacht' Costs After MoD Contradicts No.10 Over Who Is Paying

The original Royal Yacht Britannia was decommissioned in 1997 and has not been replaced (Alamy)

3 min read

Defence secretary Ben Wallace has stirred up further confusion over who will fund Britain’s new national flagship after he told MPs his department was footing the bill — despite No. 10 claiming the funding arrangements hadn’t been decided.

Wallace was speaking after defence minister Leo Docherty told The House magazine on Monday he had “literally no idea” who was paying for the vessel, which will reportedly cost £200 million to build. 

A staffer for the Aldershot MP said “discussions were ongoing” into how the replacement Royal Yacht would be funded, echoing comments made by Downing Street.

The Prime Minister’s spokesperson said on Tuesday that the Ministry of Defence would only be "responsible for the initial cost of taking the flagship through the procurement process".

"We haven't set out the source of full funding for the rest of the project,” they added.

But appearing before the defence committee on Wednesday, Wallace said his department would be covering the costs, despite it already facing a £16 billion budget "black hole".

Defending the cost of the national flagship, he said: “The estimated costs are less than 0.1% of the defence budget of the £13 billion we're gonna spend over the next 10 years in the shipbuilding pipeline. We think it is affordable.”

And he added that it was “perfectly legitimate” that the MoD pay for the project as they had experience in procurement for shipbuilding.

His comments came just three hours after fellow defence minister Baroness Goldie also suggested the funding arrangements were still not decided.

She told the Lords: "The MoD will be responsible for the initial cost of taking the flagship though the procurement process but the source of government funding for the rest of the project is still to be determined."

"To the cynics I would say: this ship will have an important national security and foreign policy function. It is not a warship and its primary role will be to promote trade and to protect the nation's economic security."

Baroness Goldie also insisted that the new ship is a “national flagship” rather than a “new royal yacht”, adding that she felt it was “a very good thing if I must make my opinion clear”.

Plans for the £200 million replacement to the Royal Yacht Britannia, which was decommissioned in 1997, were announced by the Prime Minister in May.

The royal family, however, are reportedly not in favour of the idea, with the Queen declining proposals to name it after the late Prince Philip.

Downing Street initially said on Monday that the full cost would be covered by Wallace’s department before appearing to backtrack on Tuesday, when they claimed no decision had been made.

Claims the MoD would be responsible for the yacht's cost had angered some Tory MPs. Former defence minister Johnny Mercer said it was "slightly irritating given they asked me to reduce the budget of the new Office for Veteran's Affairs from £5m to £3m, just 12 months after it was formed".

Tory peer and former chancellor Ken Clarke told the BBC's Today programme the plans were a "complete waste of time" and branded the project "silly populist nonsense".

"£200 million is not going to cause problems, but it shows there are people in No 10 who just think there's free money," he said.

But, speaking on Tuesday, health secretary Matt Hancock defended the price tag, insisting the yacht would “pay for itself many, many times over”.

He told the BBC: "The amount of investment that you can get in from the rest of the world by showing the best of Britain in harbours the world over is very, very significant.

"And I think we should be getting out there and trading with the world, and so I think that a royal yacht is a great idea and I'm very positive about it.”

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