Corbyn - give one billion pound navy contract to UK firms

LONDON (Reuters) - Labour opposition leader Jeremy Corbyn will say on Friday a 1 billion pound contract to build navy ships should be should be awarded to British companies, criticising a decision to allow foreign firms to bid for the work.

Corbyn, a socialist who has won over many voters with promises to increase public spending and take a more interventionist approach to the economy, said such a decision would create about 6,500 British jobs and support other industries.

In a speech in Glasgow, a city that once produced around a fifth of the world's ships, Corbyn will say allowing the ships to be built by foreign companies risks further undermining an industry already suffering a long decline.

The policy of Prime Minister Theresa May's Conservative government is to build all the navy's warships in Britain, but foreign companies are being allowed to bid for contracts to build three support ships that will provide new aircraft carriers with supplies while at sea.

"By refusing to help our industry thrive, the Conservatives are continuing their historic trend of hollowing out and closing down British industry," Corbyn will say, according to extracts of the speech released by his office.

"The next Labour government will use public contracts as part of our bigger plans to upgrade our economy. Don't listen to anyone who says we can't build things in Britain and that a casino economy, which produces little but soaring inequality and insecurity, is our only future."

Shipbuilders from Germany, Italy, the Netherlands, Poland, South Korea and Spain attended a recent Ministry of Defence industry day to discuss the work, according to documents obtained by the GMB union under the Freedom of Information Act.

The government's decision to allow foreign companies to bid for the work comes soon after controversy over the decision to snub a British manufacturer to produce post-Brexit blue passports.

The defence ministry said in a statement that Britain is currently witnessing a "renaissance in national shipbuilding" and that it encourages British shipyards to bid for the support ships contract.

British shipyards once produced half of the world's new ships but now account for less than half a percent, Corbyn will say.

(Editing by Stephen Addison)

By Andrew MacAskill