THE Tories' plans to build a new “national flagship” to secure trade deals around the world may cost up to £50 million more than previously stated, the Defence Secretary has said.

Ben Wallace said the costs of the “floating embassy” to succeed the Royal Yacht Britannia could be as much as £250m, 25% higher than the previously reported highest estimate of £200m. 

The SNP say the expenditure is "indefensible" in light of the number of cuts being made to Universal Credit and other vital lifeline services under the Tories in London. 

The vessel is due to be paid for out of the Ministry of Defence (MoD) budget, even though No10 has confirmed the ship will be for trade rather than defence purposes.

In a national flagship engagement day speech on Wednesday in Greenwich, Wallace said: “There has been a lot of reporting around this ship, not all of it accurate.

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“So let me set out our basic aims.

“Subject to working through bids, competition and technology, I aim to commission the ship for between £200 and £250 million on a firm price.

“The competition will run until the end of October.

“I hope to announce the winners in December.

“To begin construction in a British shipyard as early as next year and have a ship in the water by 2024 or 2025.

“That’s an ambitious timescale but this is an ambitious project, the chance to break the mould and break some records to get things done in the national interest.”

The National: Defence Secretary Ben Wallace

The Defence Secretary (above) said the Government’s ambition for the ship was for it to be a “floating embassy”, which was made and designed through a “prestigious showcase for UK skills and expertise”, and was also the “greenest ship of its kind”.

The Prime Minister was asked about the “Royal Yacht” in an interview with LBC’s Nick Ferrari on Wednesday morning, and described it as “somewhere where the UK can show itself off to the world”.

Boris Johnson told LBC: “On the national flagship, as I prefer to, to call it.

“It is a project that will not only help to drive, revive the ship building industry in this country, drive immediate jobs and growth for young people, immediate job opportunities for young people in a sector in which this country used to lead the world.

“But when you consider the opportunity for the UK, as we compete now for inward investment in the UK, we need a forum, a place where the best of British business and industry can come together to showcase what we have to offer, and, you know what I mean by, by MIPIM, the world trade fairs, the expos.

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“We need somewhere where the UK can show itself off to the world and attract investment and that will drive jobs and growth in the UK, not just in shipbuilding but across every sector of the UK.”

The Defence Secretary justified the cost of the new flagship to MPs on the Commons Defence Committee in June, saying the estimated price tag was less than 0.1% of the £13bn defence budget for shipbuilding over the next 10 years.

In March, Labour MP and chair of the Westminster Commons Public Accounts Committee (PAC) Meg Hillier said there was a funding "black hole" of up to £17.4bn "at the centre of our defence capabilities".

"The department's central estimate of the funding shortfall on equipment projects over 2020-2030 was £7.3 billion but this figure could be as high as £17.4 billion if certain risks materialise," a PAC report said in March.

The boat will be the first national flagship since Britannia, which was decommissioned in 1997, but the new vessel will be a ship rather than a luxury yacht and is aimed at boosting the Prime Minister’s post-Brexit vision of the UK as a global trading nation.

The ship will be crewed by the Royal Navy and is expected to be in service for around 30 years.

Commenting, SNP MP Dave Doogan said the royal yacht was a "flagrant waste of public money".

He went on: "The Tory government has repeatedly rejected calls to extend the £20 Universal Credit uplift beyond September, failed to provide sufficient support to the three million excluded self-employed people throughout the pandemic, is intent on prematurely pulling crucial Covid income support schemes, and has shamefully slashed the aid budget for the world's poorest and most vulnerable. 

"Yet we are asked to believe by this same government that a £250 million royal yacht is the best use of public money as we begin to recover from the pandemic with national debt at an all-time high. 

"This eye-watering bill being handed to the taxpayer is indefensible."