I am writing to inform you of the decisions that I am announcing today on the Beyond Visual Range Air-to-Air Missile (BVRAAM) for Eurofighter, and for aircraft that will provide strategic lift for the Royal Air Force.

  BVRAAM is a key element in this Government's commitment to improve the capability of the Armed Forces with a new generation of equipment. It will provide Eurofighter with the capability to combat projected air-to-air threats and meet our requirement for air superiority in United Kingdom and NATO operations.

  We received very high quality bids for the BVRAAM project from Raytheon Systems Ltd and a consortium led by Matra BAe Dynamics (UK) Ltd. We have now completed our assessment of these bids and have decided in favour of the Meteor missile offered by Matra BAe Dynamics.

  We are determined to provide the best possible equipment for the Armed Forces and to ensure that Eurofighter's capabilities are sustained well towards the middle years of the century. Meteor promises an outstanding capability and should ensure that Eurofighter can combat the complex threats likely to emerge in futher years.

  MBD estimate that this decision will create or sustain around 1,200 jobs in the United Kingdom, a good number of which will be high technology work of high quality. The missile has significant export potential on European fighter aircraft especially Eurofighter. The Meteor project will also contribute to the improvement of European defence capabilities, to enable Europe to shoulder a greater share of the burden of our common security.

  Our decision in favour of Meteor is subject to formal confirmation of commitment by our partner nations (France, Germany, Italy, Spain and potentially Sweden) to a collaborative programme sharing development costs. However, very good progress is already being made on a draft Memorandum of Understanding, and we hope to conclude this by the end of the year. Final negotiations will also be conducted with MBD with the aim of awarding a contract as soon as possible thereafter.

  Meteor is expected to enter service around the end of the decade. Until then Eurofighter will be equipped with the Advanced Medium Range Air-to-Air Missile (AMRAAM) produced by Raytheon Systems Ltd.

  A key outcome of the Strategic Defence Review (SDR) was the idenfication of the need to improve our strategic transport, to allow us to move more powerful forces quickly to an overseas theatre. We have been considering three proposals for the Future Transport Aircraft requirement from Airbus Military Company offering the A400M (formerly the Future Large Aircraft); the Boeing Company offering C-17; and Lockheed Martin Aeronautical Systems offering the C-130J. Following termination of the Short Term Strategic Airlift competition, last autumn my department also received proposals from Boeing, Air Foyle and HeavyLift to meet the short-term requirement.

  We have now completed our assessment of the proposals for both the short and long-term solutions. All had much to commend them. I have concluded that, subject to partner nations following our lead and ensuring the achievement of a viable programme, the United Kingdom will procure 25 A400M aircraft to replace the remainder of our ageing Hercules C-130K aircraft, while in the short-term we will lease fourC-17 aircraft to meet our interim need. The C-17 should enter service next year, and will fulfil our strategic airlift needs until the A400M enters RAF service towards the end of the decade.

  BAE SYSTEMS estimate that A400M will directly create 3,400 long-term, high-skill jobs, notably at their Filton, Broughton and Prestwick sites, with indirect employment taking this figure to over 10,000. My officials will be writing to the bidders to advise them of the decision.

  These procurement decisions are important for our Armed Forces, and for our defence capability for several decades to come. I hope that you will agree with me that they represent good news for Britain, as well as for NATO and Europe.