BAE Statement on UK Shipbuilding

Thought I would reproduce this

BAE Systems has reached agreement in principle with HM Government on measures to enable the implementation of a restructuring of its UK naval ships business.

The agreement will result in:

  • Restructuring of the contract for the Queen Elizabeth Class Aircraft Carrier programme.
  • Provision of additional shipbuilding work prior to the start of the Type 26 Global Combat Ships programme.
  • Rationalisation of the UK naval ship business to match future capacity requirements.

In 2009, BAE Systems entered into a Terms of Business Agreement (ToBA) with the Ministry of Defence that provided an overarching framework for significant naval shipbuilding efficiency improvements in exchange for commitments to fund rationalisation and sustainment of capability in the sector.  The agreements announced today, together with an anticipated contract for the design and manufacture of the Type 26 Global Combat Ships programme, will progressively replace that ToBA.

Queen Elizabeth Class Aircraft Carrier

BAE Systems, with the other participants in the Aircraft Carrier Alliance, has agreed changes to the Queen Elizabeth Class Aircraft Carrier contract.  Under the revised terms, the contract will be amended to accommodate programme changes and activities previously excluded from the contract.

Under the new Target Cost contract the industrial participants’ fee will move to a 50:50 risk share arrangement providing greater cost performance incentives.  The maximum risk to the industrial participants will continue to be limited to the loss of their profit opportunity.

The revised contract reflects the increased maturity of the programme, with structural assembly of the first of class vessel now substantially complete.

Interim shipbuilding workload

A significant reduction in workload will follow the peak of activity on the Aircraft Carrier programme, the six Type 45 destroyers and two export contracts.  The anticipated Type 26 programme will, in future years, address some of that workload reduction.  In the interim period, a proposed contract for the manufacture of three Offshore Patrol Vessels, announced today, will provide additional capability for the Royal Navy and sustain key shipbuilding skills.

Restructuring of the Naval Shipbuilding business

Following detailed discussions about how best to sustain the long-term capability to deliver complex warships, BAE Systems has agreed with the UK Ministry of Defence that Glasgow would be the most effective location for the manufacture of the future Type 26 ships. Consequently, and subject to consultation with trade union representatives, the Company proposes to consolidate its shipbuilding operations in Glasgow with investments in facilities to create a world-class capability, positioning it to deliver an affordable Type 26 programme for the Royal Navy.

Under these proposals, shipbuilding operations at Portsmouth will cease in the second half of 2014.  Subject to consultation, Lower Block 05 and Upper Blocks 07 and 14 of the second Queen Elizabeth Class Aircraft Carrier will be allocated to Glasgow.

The Company remains committed to continued investment in the Portsmouth area as the centre of its Maritime Services and high-end naval equipment and combat systems business.

Consultation will commence on a total employee reduction of 1,775 that is expected to result from these restructuring proposals, including 940 in Portsmouth in 2014 and 835 across Filton, Glasgow and Rosyth, progressively through to 2016.

The cost of the restructuring will be borne by the Ministry of Defence.

The implementation of these restructuring activities will sustain BAE Systems’ capability to deliver complex warships for the Royal Navy and secure the employment of thousands of highly skilled employees across the UK.

Issued by:

BAE Systems plc

London

Additional notes:

Portsmouth:

The company has extensive high end naval engineering operations in the Portsmouth area. After the proposed reductions announced today, BAE Systems will still employ approximately 3,200 people across its sites at HM Naval Base Portsmouth, Portsdown Hill, Broad Oak, Cowes, and HMS Collingwood.

Portsmouth based engineers will be retained to support the design and development of the Type 26 frigate programme. The Company’s Maritime Services business, based in Portsmouth, manages the running of HM Naval Base on behalf of the Ministry of Defence. The Queen Elizabeth Class carriers are expected to be based in the Portsmouth from 2017.  The business also provides support services to the Royal Navy’s Portsmouth flotilla, including the six Type 45 destroyers, which accounts for around 50% of the surface fleet.

Glasgow:

BAE Systems operates two shipyards in Glasgow, Govan and Scotstoun, currently employing 3,200 people. These sites are supporting the manufacture of the Queen Elizabeth Class aircraft carriers and design of the Type 26 Global Combat Ship.

Type 26 Global Combat Ship:

The assessment phase for the Type 26 programme started in March 2010. A combined Ministry of Defence and BAE Systems team of approximately 550 engineers in Bristol, Glasgow and Portsmouth are currently working to develop the detailed specification for the vessel, with a manufacturing contract expected to be awarded at the end of 2014.

UPDATE 1

Three new OPV’s based on the River class, enlarged to accommodate more personnel and a Merlin capable flight deck, a similar design to HMS Clyde I would presume?

[browser-shot width=”600″ url=”http://www.royalnavy.mod.uk/News-and-Events/Latest-News/2013/November/06/131106-New-ships-for-Royal-Navy”]

UPDATE 2

[browser-shot width=”600″ url=”https://www.gov.uk/government/news/new-offshore-patrol-vessels-for-royal-navy”]

UPDATE 3

Ministerial Statement, response and debate;

With permission, Mr Speaker, I would like to make a statement on the future shipbuilding programme for the Royal Navy and, in particular, the aircraft carrier project.

As the House will know, the previous Government entered into a contract with the Aircraft Carrier Alliance, an industrial consortium led by BAE Systems, to build two 65,000-tonne aircraft carriers—the largest ships in the Royal Navy’s history. In the strategic defence and security review 2010, the incoming Government, faced with the challenge of dealing with a £38 billion black hole in the Ministry of Defence budget, was advised that under the terms of the contract it would cost more to cancel the carriers than to build them. The Public Accounts Committee has subsequently described that contract as “not fit for purpose” and identified, in particular, the misalignment of interests between the MOD and the contractors, manifested in a sharing arrangement for cost overruns which sees, at best, 90p of every pound of additional cost paid by the taxpayer, and only 10p paid by the contractor, as the root cause of the problem.

I agree with the PAC’s analysis. In 2012, I instructed my Department to begin negotiations to restructure the contract better to protect the interests of the taxpayer and to ensure the delivery of the carriers to a clear time schedule and at a realistic and deliverable cost. Following 18 months of complex negotiations with industry, I am pleased to inform the House that we have now reached heads of terms with the alliance that will address directly the concerns articulated by the PAC and others. Under the revised agreement, the total capital cost to Defence of procuring the carriers will be £6.2 billion, a figure arrived at after detailed analysis of costs already incurred and future costs and risks over the remaining seven years to the end of the project. Crucially, under the new agreement, any variation above or below that price will be shared on a 50:50 basis between Government and industry, until all the contractor’s profit is lost, meaning that interests are now properly aligned, driving the behaviour change needed to see this contract effectively delivered.

The increase in the cost of this project does not come as a surprise. When I announced in May last year that I had balanced the defence budget, I did so having already made prudent provision in the equipment plan for a cost increase in the carrier programme above the £5.46 billion cost reported in the major projects review 2012 and I did that in recognition of the inevitability of cost-drift in a contract that was so lop-sided and poorly constructed.

I also made provision for the cost of nugatory design work on the “cats and traps” system for the carrier variant operation and for reinstating the ski-jump needed for short take-off and vertical landing operations. At the time of the reversion announcement, I said that these costs could be as much as £100 million; I am pleased to tell the House today that they currently stand at £62 million, with the expectation that the final figure will be lower still.

Given the commercially sensitive nature of the negotiations with the Aircraft Carrier Alliance, I was not able publicly to reveal these additional provisions in our budget, since to do so would have undermined our negotiating position with industry. However, the MOD did inform the National Audit Office of these provisions, and it is on that basis that it reviewed and reported on our 10-year equipment plan in January this year.

I am therefore able to confirm to the House that the revised cost of the carriers remains within the additional provision made in May 2012 in the equipment plan; that as a result of this prudent approach, the defence budget remains in balance, with the full cost of the carriers provided for; and that the centrally held contingency of more than £4 billion in the equipment plan that I announced remains unused and intact, 18 months after it was announced.

In addition to renegotiating the target price and the terms of the contract, we have agreed with the Aircraft Carrier Alliance to make changes to the governance of the project better to reflect the collaborative approach to project management that the new cost-sharing arrangements will induce and to improve the delivery of the programme. The project remains on schedule for sea trials of HMS Queen Elizabeth in 2017 and flying trials with the F35B commencing in 2018.

Overall, this new arrangement with industry will result in savings of hundreds of millions of pounds to taxpayers, and I pay tribute to the team of MOD officials, led by the Chief of Defence Matériel, who have worked hard over a long period of time to deliver this result.

In reviewing the carrier project, we also reviewed the wider warship-building programme within the context of the so-called terms of business agreement, or TOBA, between the MOD and BAE Systems signed in 2009 by the last Government. As the House will know, we remain committed to the construction of the Type 26 global combat ship to replace our current Type 23 frigates, but the main investment approval for the Type 26 programme will not be made until the design is more mature, towards the end of next year.

There is, therefore, a challenge in sustaining a skilled shipbuilding work force in the United Kingdom between the completion of construction of the blocks for the second carrier and the beginning of construction of the Type 26 in 2016. Under the terms of the TOBA, without a shipbuilding order to fill that gap, the MOD would be required to pay BAE Systems for shipyards and workers to stand idle, producing nothing while their skill levels faded. Such a course would add significant risk to the effective delivery of the T26 programme, which assumes a skilled work force and a working shipyard to deliver it.

To make best use of the labour force, therefore, and the dockyard assets, for which we would anyway be paying, I can announce today that we have signed an agreement in principle with BAE Systems to order three new offshore patrol vessels for the Royal Navy, based on a more capable variant of the River class and including a landing deck able to take a Merlin helicopter. Subject to main-gate approval in the coming months, these vessels will be constructed on the Clyde from late 2014, with the first vessel expected to come into service in 2017.

The marginal cost of these ships, over and above the payments the MOD would anyway have had to make to keep the yards idle, is less than £100 million, which will be funded from budget held within the equipment plan to support industrial restructuring. This order is good news for the Clyde. It will sustain around 1,000 jobs as the carrier construction work reaches completion, secure the skills base there and ensure the ability to build the Type 26 frigates in due course, while turning the MOD’s liabilities under the TOBA into valuable capability for the Royal Navy.

I turn now to the final part of this statement. The House will be aware that, this morning, BAE Systems has announced plans to rationalise its shipbuilding business as the surge of work associated with the carriers comes to an end. Regrettably, that will mean 835 job losses across Filton, the Clyde and Rosyth, and the closure of the company’s shipbuilding yard in Portsmouth. The loss of such a significant number of jobs is, of course, regrettable, but was always going to be inevitable as the work load associated with the carrier build came to an end.

I want to pay tribute to the men and women on the Clyde and in Portsmouth who have contributed so much to the construction of the Royal Navy’s warships—including, of course, the Queen Elizabeth class carriers. BAE Systems has assured me that every effort will be made to redeploy employees, and that compulsory redundancies will be kept to a minimum. The company is now engaged in detailed discussions with the unions representing the work force in Portsmouth and on the Clyde.

I know that the loss of shipbuilding capability will be a harsh blow to Portsmouth. The Government and the city council, together with Southampton, are in discussions about a city deal package for the area, to boost growth and jobs in the local economy. We expect to be able to make an announcement on that shortly. I can also announce that Admiral Rob Stevens, the former chief executive of the British Marine Federation, will chair a new maritime forum to advise the Solent local enterprise partnership on its maritime vision.

Despite the end of shipbuilding activity, Portsmouth will remain one of two home ports for the Navy’s surface fleet, and will continue to undertake the vital support and maintenance work that sustains our most complex warships, including the Type 45 destroyers and, of course, the aircraft carriers themselves. Indeed, with both carriers based in Portsmouth, the tonnage of naval vessels based in the port will be at its highest level since the early 1960s, sustaining a total of around 11,000 jobs in the dockyards and related activities. To support this level of activity, I can announce today an investment of more than £100 million over the next three years in new infrastructure in Portsmouth to ensure that the carriers can be properly maintained and supported.

The Chair of the Public Accounts Committee has previously described the carrier programme as

“one of the most potent examples of what can go wrong with big projects in the public sector”.

That is the legacy that this Government inherited: a carrier contract that was not fit for purpose and a TOBA that would have required the MOD to pay BAE Systems to do nothing while our shipbuilding skills base faded away. These announcements today put that legacy behind us. They will secure the future of British warship building, set the aircraft carrier project on a new path with clear alignment between industry and the MOD, and deliver important new capability in the form of offshore patrol vessels for the Royal Navy. I commend this statement to the House.

12.47 pm

Vernon Coaker (Gedling) (Lab):I thank the Secretary of State for his courtesy in providing me with early sight of his statement. It is with a heavy heart that I, and I think all Members, listened to what he had to say. However, it was important that he came to the House today, and I am glad that he did so. Let me say at the outset that when the Government do the right thing on defence, especially when difficult decisions need to be taken, they will have our support. We will always say and do what we believe to be in the interests of Britain and its people. These are complicated and detailed matters, and it will take some time to examine the consequences of today’s announcements by BAE Systems and the Government.The Secretary of State focused today on the aircraft carrier programme. May I remind him that his party supported that programme? From what he was saying, that might have been difficult to believe. He also talked about the start of the Type 26 programme and the interim work. I will return to those subjects in a moment.

My first thoughts, and those of all hon. Members, are with the employees who are facing job losses today, and with their families and the communities in which they live. Britain’s shipbuilders are the best in the world. They have proved that over decades and even centuries, and this is a difficult day for all those people who take pride in our maritime prowess and the history of our nation. Will he join me in praising those who give such great and dedicated service to our country?

What discussions has the Defence Secretary’s Department had with the Department for Business, Innovation and Skills about providing support to ensure that the unique abilities of our skilled work force, particularly in Portsmouth, are not lost? I do not mean over the last week or a number of days; I mean over the last three and a half years of this Government. It seems to me that it is only since news of the potential job losses were leaked out that the Government have given any thought to this matter. In fact, in February 2012, the White Paper, “National Security Through Technology”, said that the MOD

“does not consider wider employment, industrial, or economic factors in its value-for-money assessments.”

Does the right hon. Gentleman still agree with that statement?

Will the Defence Secretary join me in praising the role of the trade unions which have worked closely with the company and have approached these very serious issues with maturity and shown leadership in representing their members across the whole of this United Kingdom? Will he confirm that the Government need to use this opportunity to set out a clearer path to help the UK-based defence industry play its part in modernising both our industrial base and our equipment programme? Does he agree that a strong UK defence industry can be both responsive to the changing threats we face, as well as be part of a vibrant, advanced and high-skilled private sector, stimulating jobs and growth?

The Secretary of State made much of his repeated claim that the Government inherited a £38 billion black hole. That figure does not stand up to scrutiny. He has never explained how he got to that figure and it has never been accepted by any credible organisation, including the National Audit Office, which said it was impossible to arrive at such a figure. Can he tell us how he arrived at that figure and what assumptions he used to produce it?

On the aircraft carriers, the Secretary of State has trumpeted the new agreement to split 50:50 with the industry any overrun on the target cost. Will he confirm that any new changes by the MOD, such as the debacle over the “cats and traps” for fighter jets, which were changed and changed back again—the right hon. Gentleman now says it wasted only £62 million—will be fully met by the MOD? The fact that future costs will be split 50:50 is welcome. Most of the risk has already passed, as evidenced by the fact that the anticipated cost of the programme has almost doubled. And, of course, the 50% that the Government will meet still runs to hundreds of millions of pounds. It does not take an accountant to work out that 50% of £800 million—the reported rise in costs this week—is a lot of money for the taxpayer. Will he confirm that he expects no further rises in the cost of the aircraft carriers?

The cost of the restructuring that has been outlined will be borne by the Ministry of Defence. Will the Secretary of State tell us how much that will be and how it will be paid for?

We welcome the fact that skills will be maintained by the development and construction of the three offshore patrol vessels announced by the Defence Secretary today. Will he give a little more detail about how much these will cost, and will he outline what plans he now has for the second aircraft carrier and whether it is his intention to mothball it?

There has been a lot of conjecture about the role that the politics of the Scottish referendum played in the decision to keep shipbuilding in Govan. Will the Secretary of State confirm, as I and everyone else believe, that today’s decisions were taken on the basis of what is in Britain’s best interests and what will sustain the skills of the work force, thus maintaining the future of our shipbuilding industry and our country’s defence? Will he outline what safeguards are in place if Scotland votes to leave the United Kingdom? None of us want to see that, but we need to know what plans he has for all eventualities. We must retain a sovereign shipbuilding capability for this country.

Finally, will the Defence Secretary join me in saying that whatever the difficulties we experience, this country is a proud maritime nation? We have a proud, dedicated Navy, serviced by a proud, dedicated shipbuilding work force. We must maintain that across the United Kingdom, and retain the ability to build the warships we will need to defend our island, protect our interests across the world and keep us secure. That is both a task and a duty for us all.

Mr Hammond:I appreciate the hon. Gentleman’s measured tone and I join him in congratulating once again the work forces on the Clyde and in Portsmouth on the excellent naval vessels that have been built for the Royal Navy over the last few years, including the carrier that remains in build.I know the hon. Gentleman is new to his post, but he is really going to have to check some of the history before he starts making sweeping statements. He tells me that when the carrier programme was announced, the cost was £3.6 billion. Almost as soon as it had been announced, the then Secretary of State announced a two-year delay, which the National Audit Office says drove a further £1.6 billion into the cost of the carrier. The largest single element of cost increase in this programme was a deliberate act by the then Labour Government to delay the project by two years.

The hon. Gentleman asks me when we first engaged with the Department for Business, Innovation and Skills about the challenges of maintaining a skilled work force. He suggests that that has happened only in the last few days. I can tell him that the Minister of State, Department for Business, Innovation and Skills, my right hon. Friend the Member for Sevenoaks (Michael Fallon), who is in his place on the Front Bench, sat down a year ago to discuss this subject and has been in discussions with the local authorities in the area for at least a year over how to deal with the challenges that these inevitable changes present.

The hon. Gentleman asked me about the union response. I look forward to seeing the union response in full. I understand that, so far, the unions at national level have been constructively engaged with what they understand as being an effort to save the shipbuilding industry in the UK. They recognise that the level of employment in naval shipbuilding represented a surge around the carrier project that was never going to be sustainable in the long term. The challenge now is to protect the skills base as we downsize the industry.

The hon. Gentleman asks me about the £38 billion black hole. We could have a very long conversation about that, but put simply, it is the difference between the projected budget available and the commitments that the previous Government had announced. I have set that out in detail. Because the hon. Gentleman is new to his post, I would be happy to write to him and set it out again for his benefit. I would be happy to discuss it with him at any time in the future.

The hon. Gentleman asks about the consequences of the STOVL—short take-off and vertical landing—reversion. If we were to change the specification in the future, the MOD as the customer would, of course, have to accept the consequences, but we are confident that the design of the aircraft carriers is now mature. The mistake made in 2008—it was a small one—was that the contract was placed before the ship had been designed. Unfortunately—I kid my hon. Friends not—anybody who has ever tried to place a contract to build a house before the house has been designed will know that that is a licence to print money for the contractor.

The hon. Gentleman asks whether I can guarantee that there will be no further rises on the £6.2 billion price. Of course I cannot give him an absolute guarantee, but I can tell him that with every pound of additional cost being shared as 50p for the Government and 50p for the contractors, we will at least have the contractor’s serious attention to try to maintain control over the project—something that we did not have under the contract construct that the last Labour Government left us.

The hon. Gentleman asks how we have paid for the additional costs. If he had been paying attention to the statement, he would know that I told him that the full costs announced today were provided in the balanced budget equipment programme that I announced in May 2012.

Yes, the hon. Gentleman is absolutely right that we are acting as the Government of the United Kingdom in the best interests of the whole of the United Kingdom, looking at where best to deliver Britain’s warship building capability in the United Kingdom in order to make it sustainable and cost-effective in the future.

Mr James Arbuthnot (North East Hampshire) (Con):My right hon. Friend has said that “with both carriers based in Portsmouth, the tonnage of naval vessels based in the port will be at its highest level since the early 1960s”, which is excellent news. Does that mean that the Government have reached the entirely sensible decision to bring both carriers into service?
Mr Hammond:As my right hon. Friend knows, that decision will be made in the strategic defence and security review 2015. Whether the decision will be to bring the ship into service or to mothball it, it will be kept at Portsmouth.
Anas Sarwar (Glasgow Central) (Lab):At the time of the Grangemouth crisis, the First Minister of Scotland said that we should not try to play constitutional politics with such a serious issue, and I hope that he applies the same principle now to what is a very concerning time for workers in Govan.I welcome the Secretary of State’s announcement of the new contract, but that will give little comfort to workers in Portsmouth, Govan, Scotstoun, and Rosyth who will be losing their jobs during this difficult period. Will the Government give us a pledge that they will work with employees throughout the United Kingdom who are affected by what he has announced, with the trade unions and with the company to ensure that those who have lost their jobs are supported, while also trying to find a sustainable long-term future for shipbuilding that will protect jobs and investment in the UK?

Mr Hammond:What I have announced today will provide that sustainable long-term future for shipbuilding. We have answered the $64,000 question of how we would bridge the gap between completion of the aircraft carrier blocks and the commencement of the Type 26 build programme by commissioning three additional ocean-going patrol vessels which will be built on the Clyde. We have a sustainable naval shipbuilding industry in the United Kingdom, as of today’s announcement.Of course it is regrettable that jobs will be lost. That is a function of the surge in the size of the industry that is needed to deliver these very large carriers. We will work across Government with the unions, communities and other stakeholders who will be affected to ensure that the transition is as smooth as possible.

Caroline Dinenage (Gosport) (Con):The end of shipbuilding in Portsmouth is devastating for a community with a record of more than 800 years of proud service to the Royal Navy. Does the Secretary of State know when we shall hear of plans to help to ease the pain of this decision—particularly in relation to the city deal—and does he know what conversations have taken place with Portsmouth city council about the timing of today’s announcement?
Mr Hammond:My hon. Friend is, of course, right. As I acknowledged in my statement, the decision will be very hard for people in Portsmouth to accept. However, we should put this in context: 940 jobs will be lost, but 11,000 will remain in dockyards and related activity in Portsmouth, which will be the largest centre of surface maritime support in the United Kingdom—and that will continue into the future.We are engaged in discussions with both Portsmouth and Southampton city councils about the city deal proposal, and I am advised that a statement is likely to be made very soon, as soon as those negotiations have concluded.

Jim Sheridan (Paisley and Renfrewshire North) (Lab):As a former shipyard worker, let me say on behalf of the men and women in our British shipyards that, although they take pride in what they build, they do not necessarily care what they are building. Those at BAE Systems must learn to explore the commercial market, because they will not be able to sustain the company if it is wholly dependent on MOD contracts.As for the question of industrial relations, we should contrast what is happening with the trade unions at BAE Systems with what has happened at Grangemouth. One employer respects its employees, and the other does not.

Mr Hammond:I am happy to report that relations in the shipbuilding industry between management and unions are good and constructive. The unions understand the challenge that the industry faces, and they have worked with the management to address it. That sometimes means that union officials must make tough decisions as well, because they know that the industry cannot be sustained at its current size.The hon. Gentleman alluded to the diversity of the shipbuilding industry. We hear a great deal about how shipbuilding will be sustained through the commercial market and the third-nation market, including the market for warships, but I am afraid I have seen no evidence to suggest that we are able to compete in what is a very aggressive global market for commercial shipping. I think that the shipbuilding industry in this country will be primarily dependent on Royal Navy orders placed in the United Kingdom, because of the sovereign requirement for us to have warship building capability.

Mr Mike Hancock (Portsmouth South) (Ind):Can the Secretary of State explain why it was decided to transfer the existing work that was commissioned in Portsmouth away from the yard, so that the employees there will have no opportunity to complete the construction of the aircraft carriers? Can he also assure us that the MOD will not seek to claw back any of the money that is made available to Portsmouth through the city deal?
Mr Hammond:Let me respond first to the question about the aircraft carriers. Today BAE Systems announced its plan for rationalising the industry, as it must do under the TOBA in order to sustain warship building capability in the future. The challenge for us is to bridge the gap between the completion of the carrier and the start of the Type 26 programme. By moving three carrier blocks to the Clyde, along with the manufacture of the OPVs, we shall be able to sustain warship building on the Clyde and to maintain its viability into the future.I should be happy to discuss the city deal negotiations with the hon. Gentleman, who, I know, is well acquainted with the affairs of Portsmouth city council. I understand that the MOD is prepared to make land available as part of an overall scheme which would create investment and employment opportunities in the city.

Mr Ian Davidson (Glasgow South West) (Lab/Co-op):As the Member of Parliament who represents Govan Shipbuilders, I welcome the order that has been placed there for the OPVs. It is a great tribute to the skills, commitment and hard work of the work force, both management and staff. As one of my colleagues observed earlier, Govan is no INEOS.May I also point out that, given that this is an order from the Royal Navy, it would not have been available to a separate Scotland? Regrettably, the Minister seems not to have placed a firm order for the Type 26 frigates to be built on the Clyde. Will he confirm that that will not happen until we know the result of the referendum? Will he also confirm that work is being transferred from Portsmouth to Scotland in order to bridge the gap between the end of the aircraft carrier building programme and the beginning of the Type 26 programme ?

Mr Hammond:As I have just said to the hon. Member for Portsmouth South (Mr Hancock), the company intends to transfer three blocks to the Clyde so that the flow of work will be continuous until we are ready to cut steel on the OPVs at the end of 2014.We will not repeat the mistake that the last Government made with the aircraft carriers of placing an order for a ship that has not yet been designed. That would be like signing a blank cheque to BAE Systems. Much as I admire and appreciate that company’s contribution to both our economy and our defence, I have no interest in signing blank cheques to it.

Mr Gary Streeter (South West Devon) (Con):I congratulate my right hon. Friend on the skilful way in which he has reshaped the aircraft carrier contract and protected the skills base in the United Kingdom. Will he confirm that, in shaping the special package of measures for Portsmouth—which I support—he has not taken work away from Plymouth dockyard, including the maintenance of ships or future base-porting of the Type 26?
Mr Hammond:Funnily enough, I anticipated the possibility of that question from my hon. Friend. I can assure him that nothing that I have announced today will have any direct impact on Plymouth.
Angus Robertson (Moray) (SNP):I thank the Secretary of State for giving me advance sight of his statement, and commend him for making it today. It was originally to be made tomorrow, but I think it right for the shipyard workers and their families to have certainty, and I know that he has done the right thing.I am sure that the Secretary of State’s thoughts are with all shipworking families, many of whom are learning just a few short weeks before Christmas that their jobs are on the line. Earlier today, BAE Systems stated that the appropriate place for frigates to be built was Glasgow. Does he agree with that?

Mr Hammond:I am grateful to the hon. Gentleman, because his question has prompted me to acknowledge that my statement was made today in response to media stories which had created speculation that needed to be dealt with. I apologise to the Opposition for having to make the statement on an Opposition supply day.I am obviously not responsible for the statement made by BAE Systems, but the company’s judgment, on the basis of value for money, is that the Clyde is the best place in which to build the Type 26 global combat ship, and the MOD concurs with that judgment.

Sir Nick Harvey (North Devon) (LD):This is a sad day for Portsmouth, given its proud heritage of supporting the Navy, and the decision has been a bitter pill for the workers there and elsewhere to swallow. We owe them all our thanks. However, was there not a certain inevitability about the coming of a day on which these painful judgments would have to be made? Oversupply of naval shipbuilding capacity is a problem with which successive Governments have had to deal, and the TOBA gave BAE Systems the opportunity to make a commercial judgment. Will the Secretary of State confirm that the judgment was commercial rather than political? While I can see the elegance of placing the OPV contract on the Clyde, will other British shipyards get the opportunity to bid for this? It is a small enough job that plenty of them would be able to handle.
Mr Hammond:No, the contract will be placed under the overall umbrella of the terms of business agreement we have with BAE Systems, and, as I made clear in my announcement, we are effectively ordering the OPVs to soak up money we would have been paying in any case to have these yards standing idle, and in doing so significantly de-risking the start-up of the Type 26 programme by making sure the skills base remains in place in Glasgow.I share my hon. Friend’s view, however, that there is a certain inevitability about the announcement we have made today. Governments have put off the moment, and the carrier order represented a pretty massive 130,000-tonne postponement of the moment, but we cannot alter the inevitable fact that we do not have a large enough Navy to sustain a multi-yard shipbuilding industry in the UK.

Mr John Denham (Southampton, Itchen) (Lab):The record will show that the last Labour Government secured south-coast shipbuilding with a share of the destroyer order and then of the carrier programme. Today’s crisis has been coming for some time. Does the Secretary of State’s statement not confirm both that no effort has been made by the Government in the past three years to win extra orders for the Portsmouth shipyard and that work will be transferred from Portsmouth to other shipyards, hastening its closure? Does the Secretary of State understand why many in southern England feel they have been sold down the river today by a Government whose attention has been elsewhere?
Mr Hammond:No, and, frankly, travelling around the world in support of UK defence exports as I do, I should not be lectured by someone who was a Minister in the last Government, which completely neglected the UK defence industry—failed to travel and failed to engage with potential customers around the globe. That is a completely ludicrous suggestion from the right hon. Gentleman. It is not the Government’s job to win orders, whether for warships or aircraft. It is the Government’s job to support the industry in doing what it has to do, and we have been doing just that, and I can tell the right hon. Gentleman that I myself and my colleagues have visited countries as diverse as Brazil and Australia in pursuit of naval shipbuilding orders to support those yards.
Oliver Colvile (Plymouth, Sutton and Devonport) (Con):A strong Navy is good for both Portsmouth and Plymouth. May I urge my right hon. Friend to ensure that any changes to the TOBA will not hamper or do damage to Devonport in my Plymouth, Sutton and Devonport constituency? Will he also look at whether the other vessels that are being commissioned could potentially be base-ported in Plymouth?
Mr Hammond:No decision has yet been made about the location of the base port for the vessels I have announced today. Just to be clear, what this announcement will do is effectively suspend the TOBA for the duration of the period when the OPVs are being built and then see its final demise upon the placing of the order for Type 26 global combat ships. I hope we have seen the very last TOBA payment being made to the industry by the MOD.
Katy Clark (North Ayrshire and Arran) (Lab):Politics is about choices, of course. What impact has the funding of the Trident replacement had on the decisions that have led to the announcements of job losses today?
Mr Hammond:None. The Trident programme is a capital programme. The constraining factor in terms of the Royal Navy is far more around operating costs and crewing than the capital costs of platforms. We have to make sure we have a Navy that is sustainable and that we can afford to operate and crew in an increasingly tight market for engineering skills, where we often have to pay premium rates to get people with the appropriate skills. There is no point in building platforms we cannot afford to put to sea.
Mr Andrew Tyrie (Chichester) (Con):The Secretary of State appears to have resolved a massive problem that he inherited, and he deserves our congratulations for that, although the closure of the Portsmouth yards will be a big blow for many of my constituents. Can he give an initial estimate of the likely scale of the compulsory redundancies and will he reiterate the assurance that he has already given once, that none of those jobs were lost to keep jobs in Scotland at a politically sensitive time?
Mr Hammond:I thank my hon. Friend for his comments. On the last point, the analysis of where best to build the Type 26 ships, which will have to be built to a very tight budget and a very tight timetable, was made by the company—endorsed by the MOD, but made by the company. I can tell him, as I think I said in the statement—or, certainly, as the Prime Minister said earlier on—that 940 job losses are anticipated at Portsmouth between now and the end of 2014 as a result of the decision to end shipbuilding. About 11,000 jobs in the dockyards and the supporting infrastructure will remain.
Sammy Wilson (East Antrim) (DUP):There is a great affinity, of course, between Northern Ireland and Scotland, and many people will feel for those in the shipbuilding industry who are losing their jobs. Will the Secretary of State give us an assurance that, through procurement policies and the promotion of UK industry, everything will be done to keep the shipyards in Scotland viable, and does he agree that this decision shows that Scotland is far better-off within the United Kingdom than in having some kind of pseudo-independence?
Mr Hammond:The hon. Gentleman is exactly right about that last point. If Scotland were not a part of the United Kingdom, I would certainly not have been able to make the statement and announcement I have made today.
Mr Mark Hoban (Fareham) (Con):This is a sad day for Portsmouth, and many of my constituents work in the dockyard. My right hon. Friend will know that the shipbuilding facility is in the heart of the naval dockyard. Is it possible to look at the footprint of the naval dockyard to see how more land might be released from it to expand the commercial port and create opportunities for jobs and growth in the commercial sector?
Mr Hammond:I am grateful to my hon. Friend, and he is right that the shipbuilding hall that will now become unused as a result of the announcements today is inside the secure dockyard perimeter. There have been discussions about how that could be carved out, and how security arrangements could be changed to accommodate its use. This is, of course, primarily a matter for the company that owns the shipbuilding hall, but I can confirm to my hon. Friend that we are looking at all options to support employment-generating activity both in the dockyard and on MOD land adjoining it.
Mr Frank Roy (Motherwell and Wishaw) (Lab):This is a catastrophic day for the families of 835 shipbuilders, and the reality is that there will be more job losses. How many jobs does the Secretary of State estimate will be lost in the service sector for the shipyards?
Mr Hammond:I have not got an estimate of the number of jobs in the wider economy, but I can say this to the hon. Gentleman: when the carrier project was announced and the Type 45 destroyers were being built, everybody—including, I believe, the hon. Gentleman—understood that we were benefiting from a surge of work that was very welcome but that was never going to be sustainable in the long term. Of course the day when that work comes to an end is regrettable, and the consequent redundancies are difficult, but this is not something that has come unexpectedly; it is something that has long been understood and anticipated, and the announcement we have made today is good news for the Clyde, and I would have thought the hon. Gentleman would have wanted to welcome it.
Dr Julian Lewis (New Forest East) (Con):Despite the Defence Secretary’s criticism of the contracts, does he accept that the restoration of carrier strike capability to the fleet is an absolute strategic necessity, and does he also accept that one reason for the loss of Portsmouth as a shipbuilder is that the last Government reduced the total number of frigates and destroyers from 35 to 19—and, regrettably, this Government have done nothing to reverse that?
Mr Hammond:My hon. Friend is factually correct: the last Government did, indeed, reduce the total number of destroyers to be built in the Type 45 programme, largely because of the hole that was opening up in the aircraft carrier budget due to the delay in the project that I mentioned earlier. He is right, too, that we can talk all day about the history of the placing of the order for these two very large ships—the largest ships the Royal Navy will ever have had—but the fact is that we are getting them: they are being built, and we are proud of them and we are going to make excellent use of them in projecting UK naval maritime power around the world.
Cathy Jamieson (Kilmarnock and Loudoun) (Lab/Co-op):The Secretary of State has repeatedly said that this day was expected, so what work has been done to look at diversification into other industries, particularly in the marine renewables sector, for these skilled workers? To follow up the point made by my hon. Friend the Member for Motherwell and Wishaw (Mr Roy), if that estimate of the knock-on effect has not been obtained, when will it be obtained?
Mr Hammond:As the hon. Lady probably knows, estimates of effects on the wider economy are never precise, although estimates can be made. I am happy to write to tell her our best estimate, but it will be just that—the best estimate. She will know that in Scotland the responsibility for wider industrial support and the promotion of employment opportunities rests with the Scottish Government, and I would expect them to be actively engaged in this programme.
George Hollingbery (Meon Valley) (Con):I thank the Secretary of State for his statement, although of course it is not welcome news for a number of my constituents who work at the Portsmouth dockyard. Mr Speaker, I hope that you will allow me a moment to pay tribute to the efforts of my hon. Friend the Member for Portsmouth North (Penny Mordaunt), who has worked tirelessly on this subject. She has spent an enormous amount of time trying to secure the future of shipbuilding in the UK and at meetings I have attended with her it seems that she has secured at least some change, in that the importance of the commitment to the new offshore patrol vessels should not be underestimated. She and I argued not only that we should build more warships, but that there should be regeneration support for the Solent area should the worst happen. We have got the former and it sounds as though we will get the latter. If so, will the Secretary of State ensure that the many small and medium-sized enterprises based in places such as my constituency and the others around Portsmouth are also able to access such support?
Mr Hammond:First, I am happy to join my hon. Friend in paying tribute to the tireless work that has been done by my hon. Friend the Member for Portsmouth North (Penny Mordaunt), who, since I have known her, has talked about almost nothing but the shipbuilding industry in Portsmouth. Let me confirm for him that we will do everything we can to ensure that the support package for Portsmouth will be put together in a way that genuinely diversifies the local economy. That is what is needed now, and that includes support for SMEs. I will make sure that my right hon. and hon. Friends in the Department for Business, Innovation and Skills are aware of his comments.
Thomas Docherty (Dunfermline and West Fife) (Lab):Given that BAE Systems has announced that there will be job losses at Rosyth and given the Secretary of State’s wider comments about ship maintenance, I am sure that he will be happy to have an urgent meeting with one of his Ministers and me to discuss the future of Rosyth. May I press him to say what will happen if Scotland chooses to become a separate nation in September next year? Will the Type 26 order stay on the Clyde?
Mr Hammond:The Type 26 order will not be placed until the design is mature, which will not be until towards the end of next year, and so the hon. Gentleman’s question is premature. A significant number of workers who are nominally based on the Clyde are being bussed on a daily basis to Rosyth to boost the work force during the carrier assembly phase, so the announcement made by BAE Systems should be read in that context. My understanding from Babcock is that the yard at Rosyth has a bright future with private sector work—offshore work—as well as with the programme to assemble both the Queen Elizabeth and the Prince of Wales, which itself will keep the yard busy until 2020.
Sir Edward Leigh (Gainsborough) (Con):Has Whitehall finally learned the lessons from what, from a public accounts point of view, must be one of the worst politically driven, stop-start contracts in our history? Will the Secretary of State assure us that never again will the Treasury insist on delaying a contract for one or two years to save money and end up with a cost of hundreds of millions of pounds more? Just so that the taxpayer knows exactly how much this has cost him, will the Secretary of State repeat what the carriers were supposed to cost originally and what they are now costing us, and when the planes were supposed to be flying operationally from them and when they will actually fly?
Mr Hammond:It is always a brave person who says that Whitehall has learned the lessons. I can certainly give my hon. Friend this commitment: as long as I am Secretary of State for Defence, we will not be placing any contracts for things that we have not designed and we will not be driving cost into projects by making announcements of delay that are simply driven by the exigencies of poor budgeting and poor financial control. He asked me to repeat the numbers. When the project was announced in 2008 it had a budget line attached to it of £3.6 billion, but of course when the previous Government first proposed the aircraft carrier project the budget was much less than that, at £2.25 billion. Nobody I have met, in the industry or in the Navy, ever believed the project could be built for £3.6 billion. There was a degree of fantasy accounting going on, the reasons for which I will leave my hon. Friend to speculate upon.
Pete Wishart (Perth and North Perthshire) (SNP):More than 800 jobs have been lost across Scotland today as a result of the Secretary of State’s announcement. He is absolutely right to say that we cannot play politics with this and we have to put aside the constitutional issues. One way in which he could do that, if he is sincere and honest about it, is to say today that he will respect the decision of the people of Scotland next year, and that regardless of which way they decide, he will honour all existing work and contracts.
Mr Hammond:What the hon. Gentleman has not heard is that the contract for the Type 26 cannot be placed until the design is mature, and that will not be until the end of 2014. The Scottish National party is nothing if not glass half empty; what I have actually announced today is that thousands of jobs have been saved, but he chooses to present it as though hundreds of jobs have been lost.
Tracey Crouch (Chatham and Aylesford) (Con):Shipbuilding in Chatham ended 30 years ago and although the dockyard is a diverse business hub today, its closure left scars of devastation and deprivation on the town. When the Secretary of State is putting together his support package for the areas sadly affected by today’s announcement, will he look at the history of the closure of Chatham dockyard, learn the lessons and make sure that proper investment is made to ensure that these areas are not blighted as, unfortunately, Chatham was blighted?
Mr Hammond:I would be very happy to look at the history of Chatham. As my hon. Friend says, Chatham’s historic dockyard is now a thriving and vibrant location, attracting investment and employment, and that is what we want to make sure also happens in Portsmouth. Of course the point about Portsmouth is that it will continue to be a major naval port, with large-scale maritime support and maintenance activity going on; it will not become a historic port in the sense that Chatham has become one.
Dr Alan Whitehead (Southampton, Test) (Lab):Does the Secretary of State accept that shipbuilding on the south coast has already been consolidated by the removal of defence-related shipbuilding from Southampton to Portsmouth, by agreement? Does he also agree that the contract for parts of the carrier to be built in the naval dockyards in Portsmouth was very much part of that consolidation? Does he therefore accept that the removal of the aircraft parts manufacturing will be regarded as a substantial betrayal of all that consolidation effort? Does he consider it wise strategically to extinguish shipbuilding permanently on the south coast, leaving just one site for UK defence-related shipbuilding?
Mr Hammond:The hon. Gentleman is right to say that consolidation of the shipbuilding industry is not a single event; it is a process that has been going on for decades, and the absorption of VT by BAE Systems was part of it. I am afraid that the inexorable logic, given the size of the Royal Navy and the budget we have for building new ships, is that we can support only one naval shipbuilding location in the United Kingdom—anything else is fantasy economics.
Mr Andrew Turner (Isle of Wight) (Con):One strength of the Isle of Wight’s economy is its historic involvement with shipbuilding; a number of my constituents work in the Portsmouth dockyard and many companies on the island are part of the supply chain. What assessment has been made of the impact of this announcement on the Isle of Wight’s economy?
Mr Hammond:I must confess to my hon. Friend that I have not assessed the impact on the Isle of Wight economy specifically. I know, however, that the local enterprise partnerships and local authorities have been aware of these challenges for some time. If it will help my hon. Friend, I will dig out what assessments have been made by others and draw his attention to them.
Mr Angus Brendan MacNeil (Na h-Eileanan an Iar) (SNP):Successive UK Governments have failed Scotland and have failed shipbuilding, against a background of more than 100 ships being built in Norway last year. The little that remains in Scotland, as we know from Lance Price’s diaries, is due only to a strong SNP and our independent state of mind. Does the Secretary of State agree with that reality?
Mr Hammond:No. The SNP’s policies would drive shipbuilding out of Scotland finally and would be the last nail in the coffin of the industry. Today, we have announced that the Clyde will effectively become the focus of the whole of the UK’s warship building industry, that we will move the remaining carrier blocks around to support that industry, and that we will place new contracts to support the yard and ensure that it maintains the skills to build the Type 26 class, and all the hon. Gentleman can do is stand up and carp. I think that people will draw their own conclusions.
Mr Tobias Ellwood (Bournemouth East) (Con):Labour claims to support the British shipbuilding industry but, if memory serves, it was Labour that cut the Type 23 fleet by three, cut the Type 45 fleet by six orders and slowed down the new carrier order. Does the Secretary of State agree that if we are to assist our shipyards, one way to do it is to commit to operating both aircraft carriers rather than mothballing one of them in Portsmouth harbour?
Mr Hammond:Clearly, that decision will be made in the 2015 SDSR. My personal view is well known: I believe that having spent the best part of £3 billion on building the carrier, the £70 million-odd a year that will be required to operate it looks like good value for money.
Jim Shannon (Strangford) (DUP):I welcome the Secretary of State’s statement and his obvious commitment to shipbuilding. What assistance will there be to encourage the retention of shipbuilding skills through apprenticeships and will the opportunity for such apprenticeships be available to all the regions of the United Kingdom of Great Britain and Northern Ireland?
Mr Hammond:I cannot answer for any wider initiatives that my right hon. and hon. Friends in the Department for Business, Innovation and Skills might be introducing. The deal to which I have alluded today is a city deal that specifically relates to Portsmouth and Southampton, and therefore by definition it will make funding available for job creation and regeneration only in those areas.
Steve Brine (Winchester) (Con):I thank the Secretary of State for his statement. He knows that there will be grave concern in my Winchester constituency about the shipbuilding element. Those further down the supply chain will be listening to his statement keenly, no doubt wanting to ask many questions and, I must say, given what is happening in Hampshire, choking on their lunch hearing the SNP representatives complaining about the announcement. May I echo the other comments that have been made and urge him to leave no stone unturned not just in Portsmouth but across the wider region in the pursuit of regeneration of the yard and the jobs it supports, even as far up as Winchester?
Mr Hammond:As a south-east MP, I understand well that not all of the south-east is affluent with high employment. There are areas that depend on specific industries which are as vulnerable as other areas anywhere in the country. I will endeavour to ensure that the points that my hon. Friend has raised are taken fully into account.
Peter Luff (Mid Worcestershire) (Con):I commend the Secretary of State, the Minister for defence equipment—the Under-Secretary of State for Defence, my hon. Friend the Member for Ludlow (Mr Dunne)—the Chief of Defence Matériel and all those involved for making the best of a very difficult situation. Will my right hon. Friend clarify the purpose and capabilities of the three new very welcome offshore patrol vessels?
Mr Hammond:They will be more capable than the existing River class, as they will be able to take a larger helicopter and will be 10 metres longer. They will be able to undertake a full range of duties, including not only fishery protection but the interdiction of smuggling, counter-piracy operations and the protection of our overseas territories.
Mr Julian Brazier (Canterbury) (Con):I, too, pay tribute to my hon. Friend the Member for Portsmouth North (Penny Mordaunt) for her doughty struggle to get a good city deal for her constituents and for the vision for the OPVs that to my knowledge she has been outlining for at least two years. Will the Secretary of State confirm that the OPVs will to some extent provide a force multiplier for our frigate fleet? Some of the roles carried out by frigates do not require full frigate capability, so the OPVs could be a way of partially expanding that capability.
Mr Hammond:At the risk of causing her to blush, I am happy once again to praise my hon. Friend the Member for Portsmouth North. I should say to my hon. Friend the Member for Canterbury (Mr Brazier) that no decision has yet been taken about whether the old River class vessels will be retired after the new OPVs are brought into service. That decision will have to be made in SDSR 2015 based on the ongoing budget challenges of maintaining additional vessels at sea. That will be a decision for the Royal Navy.
Bob Stewart (Beckenham) (Con):Most people suggest that our biggest defence capability is not in maritime patrol aircraft. I am no expert—although I can see that there are many naval experts in the Chamber—but could this new River class OPV, with its enhanced length and helicopter deck, also be used to cover the gap between 240 nautical miles, the distance a land-based helicopter can go out from our shores into the Atlantic, and the 1,200 nautical miles for which we are treaty responsible? Could it perhaps play some sort of MPA role in that area?
Mr Hammond:I have not looked at the specification in detail, but I do not envisage that the thing will be able to take off and fly. I understand the point that my hon. Friend is making, however, and we are conscious of the gap in maritime patrol aircraft capability. It is one issue that will be addressed in SDSR 2015 and we will manage the gap in the meantime through close collaboration with our allies. We are considering all the options, including, potentially, the use of unmanned aerial vehicles in a maritime patrol role in the future.
Neil Carmichael (Stroud) (Con):I congratulate the Secretary of State on salvaging a sustainable shipbuilding future for this country from the wreckage left by the previous Government. Looking to the future, and bearing in mind his comments about engineering, does he agree with me that we should be encouraging young people to think about entering the defence services as engineers to develop new technologies, including in electronics and composite materials?
Mr Hammond:Absolutely. I must say to my hon. Friend and for the record that there are huge opportunities available across the defence industry and in the defence establishment for young people with engineering skills. I am glad to say that all the evidence suggests that my right hon. Friend the Secretary of State for Education’s reforms are having the effect of reawakening the interest of young people in the STEM—science, technology, engineering and maths—subjects. Increasing numbers are taking them up and that is good news for the future of British industry.
Jason McCartney (Colne Valley) (Con):David Brown Gear Systems from Lockwood in my constituency has secured a design contract for the new Type 26 global combat ship. As well as confirming the new time scale for the Type 26s, will my right hon. Friend say when we will know how many vessels will be ordered?
Mr Hammond:I have not confirmed the new timetable for the Type 26. It was always our intention that we would mature the design fully before we placed a contract, in order to avoid the mistakes of the past. The current planning assumption is that we will order 13 vessels.
Mr Philip Hollobone (Kettering) (Con):When we talk about aircraft carriers, we tend to focus on their construction, but, of course, when they become operational they will require trained crews. With which navies are we co-operating to train the requisite personnel and might there be expanded opportunities in places such as Portsmouth for onshore training in the run-up to deployment?
Mr Hammond:A certain amount of training can be done synthetically onshore, but I am grateful to my hon. Friend because he gives me the opportunity to reiterate publicly and on the record our gratitude to the United States navy and the United States marine corps, who are assisting us in keeping alive our carrier skills during a period when we are not operating fixed-wing aircraft off UK carriers. We have pilots and deck officers embedded in the US navy and the US marine corps and we will develop our fleet of F-35B aircraft, with the first operational squadron based in the United States at Eglin air base. It will return to the UK in 2017 as a trained squadron ready to stand up immediately on its arrival. Without that support from the US, we would be struggling to get back into the carrier business. We should be immensely grateful.

 

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HurstLlama
HurstLlama
November 6, 2013 11:51 am

“a proposed contract for the manufacture of three Offshore Patrol Vessels, announced today, will provide additional capability for the Royal Navy and sustain key shipbuilding skills.”

Anyone know anything about this? Seems to have come out of the leftfield, I certainly don’t recall the RN having OPVs in its announced fleet plans. Anyone want to offer odds that these OPVs will not be used to reduce the number of frigates by three?

“Lower Block 05 and Upper Blocks 07 and 14 of the second Queen Elizabeth Class Aircraft Carrier will be allocated to Glasgow.”

PoW completion going to be put back?

Will Sheward
Will Sheward
November 6, 2013 11:58 am

I wonder how reversible this decision is in the event of a Scottish yes vote next year? I suppose it shouldn’t come as a surprise that any BAE decision is as political as it is commercial but really, that place in the UK that must not be named but which begins with an “E” and ends with a “land” (and which I don’t think the political master are allowed to consider a national entity) seems to be getting the shaft.

Also OPVs? Are these in addition to the Rivers or replacements for the original 3 which aren’t that old and which we only actually bought last year?

Or are they for the Scottish Navy? ;-)

Or are they really corvettes which are being rebranded in order to avoid giving the First Sea Lord a heart attack?

Bob
Bob
November 6, 2013 11:59 am

Less boats = less boat building = less people to build boats.

Simple equation really.

Great opportunity to explain some unfortunate truths to the Scots though. If you are not in the UK you can not expect to get dollops of UK money. The Scots need to understand that if they leave the UK then the UK has no duty of care for them.

S O
S O
November 6, 2013 12:07 pm

The Scots would probably want to have a navy comparable to Denmark’s and may produce for export, though.

x
x
November 6, 2013 12:10 pm

I am sure NaB will be along soon to cut and paste in his breakdown of what each yard brings to the mix. :)

I think the issue is more to do with what many English perceive as a democratic deficit within the UK.

PMQs will be fun.

Paddingtonbear
Paddingtonbear
November 6, 2013 12:12 pm

The workforce was massivley increased to build the QEC carriers. It was always know there would need to be a degree of rationalisation.

3 New OPV’s has been rumoured for sometime. I think this is some good news. It’s crazy to be doing pirate and drug operations with £1bn destroyers.

Bob
Bob
November 6, 2013 12:13 pm

An OPV gap procurement was suggested in 2011/12 IIRC so it should not be that surprising.

It is worth noting that the River class OPV support contract has been extended to 2018- at which point the ships are 15 years old so plausibly young enough to be replaced (and sold second-hand) so this may be a replacement programme. We can only hope/dream that it is a more sensible effort to expand the RN patrol forces- especially with the recent Gibraltar shenanigans.

x
x
November 6, 2013 12:15 pm

I am going to sit this one out as I can see me getting very upset.

TTFN

See you on the flip side.

dave haine
dave haine
November 6, 2013 12:16 pm

I would like to say:

‘Yet another example of how English workers get shafted due to Scottish arrogance’

But undoubtedly it would be construed as unfair to the Scots so I suppose I’d better not.

Bob
Bob
November 6, 2013 12:20 pm

Who cares what the Scots want? If they vote yes what they want is their problem- not the UK’s.

OPVs should not bet surprising- this was suggested as a production gap filler in 2011/12. The River class support contract now runs to 2018 (when the hulls will be 15 years old) so they could plausibly be replaced and sold off then.

HurstLlama
HurstLlama
November 6, 2013 12:21 pm

I wonder which project(s) are being cut/put back to find the money to build these new OPVs that don’t seem to have been included in any published plan. Then, once they have been built, what will the RN have to give up to find the cash and people to operate them?

@SO

An independent Scotland want an Navy comparable to Denmark’s? They might want one but on the budget the SNP are proposing they could never afford one (Denmark has 9 frigate size ships, with helicopter numbers to match and a good deal more small vessels for inshore work).

Red Trousers
Red Trousers
November 6, 2013 12:28 pm

At a quick glance, the MoD have shafted themselves yet again:

50:50 risk share, not the 90:10 trailed earlier this week. Industry’s potential risk losses limited by the anticipated profit loss. We do fixed price software development for mission critical systems. Why can’t BAE Systems build ships on the same fixed price basis?

Chucked some new ship building work (3 new OPVs) to them to offset the death of the ToBA.

T26 likely to go to Glasgow.

Cost of restructuring (ie redundancies, Pompey shut down works) to be borne by MoD.

That ToBA and related QEC deal was completely lopsided.

Engineer Tom
Engineer Tom
November 6, 2013 12:37 pm

I have to say this has all been long expected and for the majority there were no surprises in the announcement.

[Edit: Majority involved]

Peter Elliott
November 6, 2013 12:40 pm

The cost of building the 3 OPV is stated to come from within the budget for TOBA. ie if we didn’t build them we would be paying staff and yards anyway to stand idle.

They are stated to be replacments for the existing 3 Rivers so there is no addtional operating cost to be found from within the rest of the RN.

Given the existing ships will be around 15 years old by the time the new ones come into service it seems not such a bad deal.

rampant
rampant
November 6, 2013 12:41 pm

@HurstL, apparently, well according to the MoD press release anyway:

” The cost of building the ships is funded from money that would have been used to pay for idle capacity, finance redundancies and meet the cost of industrial restructuring”

https://www.gov.uk/government/news/new-offshore-patrol-vessels-for-royal-navy

mickp
mickp
November 6, 2013 12:56 pm

I would hope there’s still enough mileage left in the Rivers to keep them in operation as some form – RNR, fisheries, Border agency, ‘coast guard’ type ops. No point having shiny new Merlin capable OPVs doing fisheries work – that would be like having T45s chasing pirates

Or perhaps this is just a contingency plan for independent Scotland- i.e. they are building their potential future Navy?

HurstLlama
HurstLlama
November 6, 2013 1:14 pm

Mr. Rampant & Mr. Elliott

Did the MoD have a budget for paying yards to stand idle? I don’t think so. So this is new money that will have to be found from somewhere. It may be better to spend the money on building new vessels to, possibly, replace those that are hardly worn out (and were not scheduled for replacement) that simply hand over that cash to BAe for doing nothing. However, that money has to be found from somewhere, so something else will have to be cut.

If the Rivers need to be replaced, then I would have thought the RN would already have this in their plans. As far as I can see they didn’t. So I suspect this is a nasty political stitch-up for which the RN will end up paying twice over . Oh, and don’t forget we still have the 2015 defence review to come – “these new OPVs, much bigger and more capable than the old ones, so you won’t need so many Frigates will you chop the numbers by three shall we?”.

As an aside, does there exist a design for these new larger OPVs?

Will Sheward
Will Sheward
November 6, 2013 1:16 pm

Eillott
“Given the existing ships will be around 15 years old by the time the new ones come into service it seems not such a bad deal.”

I know that the Rivers spend a lot of time slamming around the North Sea, a pretty unfriendly environment, but 15 years still seems like a very short lifespan. I would have expected them to last longer than the Castles.

A little while ago, when the Rivers were being bought out of the lease contract, there were lots of quote requests floating around for systems upgrades. I know this as my company supplies military messaging software to the armed forces (mostly export now) and we were asked for info from a number of the companies bidding.

As is common in military procurement these days everyone was being asked for fixed pricing on multi-year support contracts, a good thing as it protects MoD against price rises and beds in a little price certainty over the operational life of the system. As far as I recall, the fixed-price term significantly exceeded what is now being implied as the out of service date for the Rivers.

Of course, it may have always been the plan to pull the kit out of the Rivers and put them into the next class. Or this might be a last minute “quick, we need to order some votes, err, boats!” decision that will come as a surprise to the RN.

Brian Black
Brian Black
November 6, 2013 1:19 pm

” three brand new maritime patrol vessels with a wide range of capabilities which will support our national interests and those of our overseas territories.”

Does this statement by Hammond, with the mention of BOTs, indicate that the three new vessels will replace the four existing vessels at home and in the Falklands?

Or perhaps the Falklands get a spare River to provide 365 cover down south?

Could also be a reference to gifting the not so old Rivers to territories, or a permanent Navy presence established somewhere.

Any ideas?

Peter Elliott
November 6, 2013 1:21 pm

@Llama

Do you know that the cost of TOBA was not in the committed budget?

The statements on the RN and GOV sites seem pretty clear.

Engineer Tom
Engineer Tom
November 6, 2013 1:23 pm

@ BB

The Falklands already has 365 day cover, Clyde provides 300 days a year and is covered by other vessels when in refit.

Reading the press release I see them replacing the Rivers, though I believe they should keep them all.

Chris
Chris
November 6, 2013 1:25 pm

TD – by the time the old Vickers works closed control of all BAE’s land projects had been moved to another BAE purchased company, the ex-United Defense. Arguably the Vickers organisation was no more British than GD’s one in Newport. And the ex-GKN plant in Telford is still in operation as BAE’s UK Land engineering works, soo its not all gone.

But the point is taken – obviously the MOD believes sovereignty of design & production of big grey ships is important but sovereignty of design & production of heavy armour isn’t. Or is it more likely as people get all misty-eyed over the ships of the Royal Navy, but don’t about hoofing great tanks, the politicians have clearly seen where their best vote-winning investments are?

Gloomy Northern Boy
Gloomy Northern Boy
November 6, 2013 1:45 pm

Low but probably necessary politics – it has already been made clear that if Scotland vote for independence the UK won’t build ships there…the OPV work keeps the Clyde going until after the Referendum, thereby reducing pressure to finalise the T26 Contract…which can then be placed with a re-invigorated Pompey if the Scots vote to break up the UK.

My next step were I Cameron would be to start flying kites about re-locating the Faslane Facilities to the Mersey or some such…thereby opening up the already quite real rift between Glaswegians who like big grey ships and sleek black submarines, and the good folk of Edinburgh New Town who want to become Lawyers and Accountants in the employ of Prime Minister of an Independent Scotland Salmond…

And before anybody starts shouting about the importance of Faslane being “remote” could I point out that by any standards but ours it isn’t very, because nowhere in the UK is….and in any event the warheads get shifted about pretty frequently anyhow…”Remote” is 150 miles into the Rockies by secured military road and then under a mile of granite…not a few miles up the road from a big industrial City.

GNB

Pte. James Frazer
Pte. James Frazer
November 6, 2013 1:49 pm

Let’s hope that the new OPV’s design follows the trend of building them bigger than their predecessors to future proof….something like the Venator 110 design from BMT with export potential as well?

http://www.bmtdsl.co.uk/media/1166510/BMTDSL-Venator-110-Datasheet.pdf

Like most I would like to see these as permanent Caribbean, Horn of Africa, West Coast Africa vessels with the Rivers retained for the existing fisheries role, if the core budget can be found.

Here’s hoping.

Bob
Bob
November 6, 2013 1:52 pm

It actually states in one of the links above that the new OPV’s are “expected” to replace the three original River class boats. It leaves the door ajar by mentioning SDSR15 but it seems pretty clear. These are direct replacements for the first three River class ships.

They will also have a Merlin sized helo deck.

Bob
Bob
November 6, 2013 1:58 pm

TD,

The UK AFV industry got plenty of sweetheart deals. Both Challenger variants for a start, not to mention Titan, Terrier and Trojan. Vickers/Alvis/BAE just kept screwing them up.

a
a
November 6, 2013 2:13 pm

‘Yet another example of how English workers get shafted due to Scottish arrogance’

Or just a consequence of the Scots being better at building ships than the English.

Zaitsev
Zaitsev
November 6, 2013 2:37 pm

Seems to be an assumption that ship builing is a resource to keep workers imployed, not that workers are a resource for shipbulding, but how many of these workers are dependant on ship building? Ok you work in a package plant and it closes down you may loose your only chance at a decent job, but if you are skilled worker in electrics or welding or software you can find work else where. Given the limted number of people in some professions, for example software (do we have enough welders in the country? are there skills transfrable?), if you tie up a proprtion of workers bulding unnessary ships then you create a shortage in other industries, mayby writing software for jcb. When looking at job losses the press should be looking at people who depend on those jobs, People who could work else where, poeple who would be better employed working elsewhere. I know there are a large number of people who can only be employed in a particuler role but i would of thought that naval shipbuiling required skilled workers who maybe are despratly needed else where in the econemy. Seems to me that the general public, be they a lawyrer, account or marketer is so use to trying justify there utterly pointles jobs, that they forget some of us are trained in a job that is actuely usefull and would prefer to be employed on projects that are also actually usefull.

The Other Chris
November 6, 2013 2:50 pm

Strong talk this morning of a “Yes vote clause” switching work to Portsmouth in the event of a Scottish secession.

Pab
Pab
November 6, 2013 3:05 pm

Would be interested to know if these OPVs will have a hanger too. A heli pad is nice but not essential for what the River’s currently do.

Give them a hanger and they can get involved in anti piracy/narcotics as well as other training and liaison roles abroad.

Simon257
Simon257
November 6, 2013 3:05 pm

Sorry to say this, But Portsmouth has been shafted here. This should have been a perfect opportunity to show the Scots what independence would mean if they voted yes.

I would hedge a bet, that BAE was hoping a threat of Major Job losses, would force the Government to bring forward the T26 programme. That has obviously failed.

Mike
Mike
November 6, 2013 3:07 pm

No jobs should have been lost had the 4 new RFA’s been built here rather than South Korea. Even if it had cost more up front this would have been more than offset by retention of the jobs and strategic skills. Also a long term plan for commercial shipbuilding is needed. The money invested by BAE/MOD in the skills and equipment for our warships should enable us to win orders for the more complex hi value commercial market.

Pab
Pab
November 6, 2013 3:14 pm

@ Simon257 “This should have been a perfect opportunity to show the Scots what independence would mean if they voted yes.”

I’m sure that would encourage Scots to vote NO…

Hearts and minds dear boy. what next, burn their villages?
:)

Gloomy Northern Boy
Gloomy Northern Boy
November 6, 2013 3:16 pm

@Simon 257 – I can’t quite see how closing down Clyde Shipbuilding and alienating tens of thousands of Scots would help save the Union…better surely to make it clear what the outcome will be if they vote to end it? And that message seems to have been made pretty clear…bad for Portsmouth, but good for the Union I would have thought…

GNB

martin
Editor
November 6, 2013 3:24 pm

Was going to read through the comments section until I realised it was just full of the usual little englander (and as**ole loan american (you all know who you are) rants about Scotland.

Simple fact is Portsmouth has been on the chopping block for a long time. If you have three yards and one of them is at the opposite end of the country from the other two and you need to shut one, well the logic is pretty obvious. If anything the Scottish referendum would give more weight to keeping Portsmouth open not that your likely to listen to such logic as you bemoan the loss of your little shipyard and second battalion fusiliers.

On on political shafting I seem to remember HM Rosyth being pretty shafted and last with a £500 million hole in the ground to re award a contract to Plymouth just before an election.

Pte. James Frazer
Pte. James Frazer
November 6, 2013 3:30 pm

Pab

Agreed. The BMT Venator 110 design that I linked to above has just that. Hope they go that route rather than an updated River/Amazonas/Khareef design.

Mike

Agreed. All this was utterly predictable under the ToBA as soon as they placed the RFA MARS contract with Daewoo. Very short sighted imo.

x
x
November 6, 2013 3:30 pm

Pab said ” A heli pad is nice but not essential for what the River’s currently do.”

Really? And you speak from years of working with small ships, large boats, and helicopters do you? Even if the helicopter rarely lands on having a large expanse of flightdeck to work from is invaluable. Down wash tends to push stuff dangling at the end of lines around just a bit. Not fun. In the EEZ the helicopter is just as valuable a vehicle as a ship or boat. A few square meters of metal added to the cost of a vessel so it can “interface” with the helicopter is a sound investment if for no other reason than health and safety. Having it the flight deck big enough to take the RN’s largest helicopter also sorts of make sense don’t you think? Whether it is security of CASD or an emergency in the oil fields or whatever. You could argue that the Rivers cope without them. You could also argue that whoever signed off on them not getting a flight deck probably to save a shekel so it looked good on his annual report probably should have kicked out of the service instead. Not essential? Really? Rhubarb.

http://trawlerphotos.co.uk/gallery/data/517/medium/Helo_best_1.jpg

http://news.bbcimg.co.uk/media/images/54209000/jpg/_54209869_helicopter_boat.jpg

http://www.redfunnel.co.uk/my-isle-of-wight/wp-content/uploads/2012/05/RNLI-air-sea-rescue-demonstration-by-Roger-Cox-.jpg

http://farm8.staticflickr.com/7110/7716551236_a4f2478145_z.jpg

Pab
Pab
November 6, 2013 3:33 pm

Despite the fact that no UK shipyard bid for the MARS job, I can’t help but wonder if this was a sweetner to the Koreans in order to get them to buy Wildcat and other items.

Chris.B.
Chris.B.
November 6, 2013 3:34 pm

@ Zaitsev,

“Given the limted number of people in some professions, for example software (do we have enough welders in the country? are there skills transfrable?), if you tie up a proprtion of workers bulding unnessary ships then you create a shortage in other industries”
— A point I’ve tried to make before, though it’s not always quite that clear cut.

A friend of a friend who I met once while exceptionally drunk is now in Denmark for a few weeks, putting his welding skills to good use for a UK company sub-contracted for some offshore work. He’s been all up and down the East coast of the UK putting his skills to work in various roles. A welder is a welder is a welder (except when he’s the wrong type of welder!). He’s practically picking and choosing his jobs at the minute.

martin
Editor
November 6, 2013 3:37 pm

@ Hurst Lama

“If the Rivers need to be replaced, then I would have thought the RN would already have this in their plans. As far as I can see they didn’t. So I suspect this is a nasty political stitch-up for which the RN will end up paying twice over .”

To reform the ship building industry and as part of the aircraft carrier alliance the government had to promise a minimum annual budget for ship building. Its been in place for a number of years and was not an issue with the scale of work going on for the past decade with T45 and CVF. It would not have been an issue if the T26 and MHPC programs were in effect as originally envisaged. Ordering three OPV’s to fill this gap is about the most sensible thing i have ever heard of coming out of the MOD. Previously as with the gaps in SSN production (Astute 8) we have paid the yards to do nothing.

At the very least we can probably sell the three older rivers for something. I am guessing by the fact that the decision on what to do with the older Rivers is being left to SDSR 2015 the RN will be trying to get a budget to keep all of them which would be most welcome. If they put a hanger hanger on them for a Lynx i can see any reason why they can’t be used for APT (n) for much of the year with a bit of extra support from the RFA in Hurricane season. Will certainly help to free up a few precious frigates.

Pab
Pab
November 6, 2013 3:38 pm

 @ X, not years but a few weeks anyway :)

All I was saying was that to use them abroad on independent patrols, a hanger would seem essential. Without a hanger, their flexibility will be reduced.

I bow to your superior knowledge of such matters though.

Gloomy Northern Boy
Gloomy Northern Boy
November 6, 2013 3:41 pm

– Seems a bit harsh; I would have thought the comments were on balance in favour of the decision and hopeful that it would be useful to the future of the Union (which I personally strongly support)…with a few people very upset about the loss of what they obviously see as “their” Shipyard…

However it is surely important for people to understand that actions have consequences – and if the Scots do vote to break up the Union, the UK will stop building ships there, and we will have to re-locate the Nukes – and that will cost quite a lot of Scottish Jobs.

I personally think this is a pro-Union decision and I applaud it for that…

GNB

Bluenose
Bluenose
November 6, 2013 3:42 pm

“Despite the fact that no UK shipyard bid for the MARS job, I can’t help but wonder if this was a sweetner to the Koreans in order to get them to buy Wildcat and other items.”

Industrial offsets and Countertrade? :)

Bob
Bob
November 6, 2013 3:53 pm

martin,

You have clearly missed the point (yet again); this is all about the Union. The deal is obvious, stay in the Union and you get to build ships for the RN, leave the Union and you don’t.

Seems fair doesn’t it?

As for the little Englanders comment. Wanting rid of 5.3 million people who receive such stark democratic and financial privileges over the rest of the UK that it borders on apartheid is not “little Englander” it is a desire for liberty.

martin
Editor
November 6, 2013 4:02 pm

@ GNB

No I don’t think its a bit harsh given the comments written here and in numerous previous posts.

This is not a pro union decision.

We were talking about the closure of Portsmouth long before there was a Scottish referendum. Infact if it had not been for the vast amount of work on the Queen Elizabeth Class the yard would have closed about five minutes after BAE took if over from VT as soon as the last Khareef was off the slip way.

Also your advice to David Cameron of threatening to take Faslane to Merseyside is firstly quite offensive I am sure to the people of Liverpool ( relocating a Nuclear Weapons Facility into one of the most densely populated areas in the country)( Why not the Thames or is that too close to Tory party HQ and the NIMBY’s) and to the 75% or so of Scots likely to vote against independence.

Not to mention that every party of the Yes campaign and I am sure half the other side if Scotland did vote for independence would boat Faslane out of the country the day after the referendum.

Coincidently does anyone have a single shred of proof that the closure of Portsmouth has anything to do with the scottish referendum or are you just quoting the Daily Fail on this one.

Dunservin
Dunservin
November 6, 2013 4:07 pm

@ Chris

“…obviously the MOD believes sovereignty of design & production of big grey ships is important but sovereignty of design & production of heavy armour isn’t. Or is it more likely as people get all misty-eyed over the ships of the Royal Navy, but don’t about hoofing great tanks…”

– I’ve had a good look inside a few “hoofing great tanks”. It didn’t take long. ;-)

– Have you ever had a good look inside a warship or nuclear submarine including (as applicable) the bridge, ops room, ops room annex, electronic warfare office, sonar instrument space, sonar control room, flyco, hangar, hull outfits, radar power room, communications centre, computer room, machinery control rooms, main switchboard (nothing to do with phones), emergency switchboard, gas turbine and diesel engine rooms, generator rooms, LP room, conversion machiney space, RO plant, ACUs, tiller flat, reactor compartment, reactor control room, magazines, torpedo/TLAM compartment, towed array compartment, ICBM missile compartment, etc.? They’re all crammed full of technology, most of it developed and manufactured in the UK.

– For what it’s worth, I think the MoD should support production of AFVs and heavy armour too although FRES is not the greatest testament to its ability.

Gloomy Northern Boy
Gloomy Northern Boy
November 6, 2013 4:11 pm

@ Martin – I am now at a complete loss – If Scotland votes to break up the Union we will have to move Faslane somewhere because the SNP won’t have it….that’s just a fact, as is the ending of RN Shipbuilding on the Clyde…all I have done is reflect on the possibility that a reminder about these points might be useful to the pro-Union party in Scotland – and I actually applaud the decision on that basis…

As to the Mersey, that was a bit facetious…but they do need the jobs, and Faslane isn’t that far from Glasgow in reality.

I am just reflecting on things that will happen if the Scots vote to leave the Union….why is that a problem?

GNB

martin
Editor
November 6, 2013 4:24 pm

“I am just reflecting on things that will happen if the Scots vote to leave the Union….why is that a problem?”

Have you looked at an opinion poll. There is virtually a zero statistical chance of Scotland voting for independence.

But constantly “reminding” the people of Scotland that they could not wipe their arse without England is a good way to change that fact.

Also I am pretty sure that if facing a yet another 9% or 10% cut in the MOD budget if Scotland did leave and the cost or relocating Faslane you could pretty much kiss Trident or its replacement goodbye.

It would certainly be relatively easy to relocate the subs from Faslane but where in the rest of the UK would you put the replacement for Coulport. We are talking about a country where it’s nearly impossible to build a windmill let alone a Nuclear Missiles storage facility.

Bob
Bob
November 6, 2013 4:49 pm

martin,

You are just being silly now. Nobody is suggesting that Scotland “could not wipe it’s own arse” without England. There are just some realities that many Scots do not want to accept- the most significant being that the rest of the UK will not have a duty of care to them if they do vote for independence.

Simon257
Simon257
November 6, 2013 4:52 pm

@ GNB and Pab

I’m all for the Union. Just sick to the back teeth of everyone in Westminster running scared of the SNP. Their so afraid of upsetting Alex Salmond, it’s downright pathetic. The way he goes on you swear, we were burning Scottish Villages!

@ Martin
I’m not little Englander far from it, little Welshman maybe! I have the same problem with the little Welsh Nationalist’s who all live in the same LaLa Land!

Their is no reason why the Government and BAE can’t let the two Clyde yards build the three OPV’s. And continue building the Blocks for PoW at Portsmouth. Once the Referendum has taken place, then a decision can take place on the future of shipbuilding. Although a lot in the Media seem to forget that BAE’s major shipyard is in Cumbria!
Appledore shipyard, will probably feel they have a case against the Government, as the three OPV’s haven’t been put out to tender!

@ Welders
Specialist Welders generally have moved from site to site and live out of a suitcase that goes the job, as that is where the money in Welding is. Until he retired, my Dad did it for all of his working life.

Clydewatcher
Clydewatcher
November 6, 2013 4:53 pm

I think we have to assume that the new Patrol Boats will be from a design with limited risk especially if they are to start building in 2014 and sea trial in 2017. I would suspect they would be of the 90M class “off the shelf” BAe design that the Thai Govt (similar to the ex Trinidad Ships ) have in service with the heli-deck perhaps modified slightly to Merlin capacity. – Hopefully with a 76MM gun though !

Quinqueue
Quinqueue
November 6, 2013 5:02 pm

“It would certainly be relatively easy to relocate the subs from Faslane but where in the rest of the UK would you put the replacement for Coulport. We are talking about a country where it’s nearly impossible to build a windmill let alone a Nuclear Missiles storage facility.”

How about south georgia? it would certainly make for a great excuse to add a little more firepower to the area.

Nice to have new OPVs on order, but given that we’re missing half of the T45 order I find it hard to cheer about them.

Gloomy Northern Boy
Gloomy Northern Boy
November 6, 2013 5:03 pm

@ Martin – I haven’t said that or anything resembling it, but if the Scots do break up the Union as is their right, it will affect what the rest of us do about Defence Procurement and CASD – as somebody from elsewhere in the UK with an interest in Defence why shouldn’t I and indeed others muse about these issues? Why so sensitive?

A genuinely perplexed Gloomy.

Dave
Dave
November 6, 2013 5:06 pm

I’m not sure why everyone assumes that the Royal Navy wouldn’t purchase Scottish built ships after independence, surely this trade malarkey works both ways, why would Scotland buy Planes, Helicopters, Missiles, Armoured Vehicles, Rifles and Artillery from the rump UK if nothing was being sold in return?

HurstLlama
HurstLlama
November 6, 2013 5:06 pm

Mr. Elliott

“Do you know that the cost of TOBA was not in the committed budget?”

Not for an absolute fact, I don’t. However, I don’t see a line for it in the MoD published accounts, though it maybe hiding under another heading, I doubt it though for two reasons. Firstly, to have such a contingency for something that could only happen if the Department cocked-up would go against culture and secondly on what basis would the estimate be made? I hope I am wrong, but I fear the RN are going to get royally screwed.

“The statements on the RN and GOV sites seem pretty clear”

I am glad you think so. To me they seem classic civil service press department obfuscations – seeming to give answers but leaving nothing actually resolved. Furthermore, you will have noted that no final decision about the role of these new surprise ships will be made until after the 2015 defence review.

You’ll also note that according to the MoD work on the first of these new OPVs will start next year with a view to completion in 2017. Just think about that for a moment. What design are they going to be built to? The RN wasn’t planning to replace the River class and so is there a detailed design for a larger vessel capable (according to the 1st Sea Lord of taking the Merlin) just sitting in someone’s bottom drawer? I think it HMS Clyde that can take the Merlin, so I suppose we could end up replacing the early Rivers with the Clyde modified River design, but that is hardly a leap in capability.

A prediction, the RN is going to end up spending a chunk of its precious budget on new ships that it neither needs nor wants and as a result of this new, unheralded, class being forced on them the number of new frigates will be cut.

Chris
Chris
November 6, 2013 5:11 pm

Dunservin – for reasons fairly obvious HMG has not let me, nor anyone else without Need to Know, aboard our SSBN. I went aboard HMS Alaric at a Pompy Navy Day (smelly!) and HMS Alliance a few times. Perhaps more relevant I had a tour of HMS Lancaster (2 deck & hangar I think it was), and courtesy of the CPO who was my minder for the day blagged a tour round the mothballed Ark Royal – that trip from bridge to bilges through as many compartments as we could access. Yes the ships had lots of pipes and cables and enclosures and panels, how many were unique to the ship class I couldn’t judge but I’d hope the Naval Architects make efforts to ensure commonality across the fleet? Which was my point – the vessels are big and have a lot of stuff aboard, certainly, but new ships really ought to fit proven RN standard systems where adequate rather than designing every single widget from scratch just because they can.

Big black boats are I am sure much more complex and more ‘strategic’ skills are necessary to remain good at building them. But that’s at Barrow, not the Clyde.

Tanks are cool! People just don’t understand them… Seriously – much of the high value engineering in the design is invisible – how to create welded joints that maintain ballistic integrity for example (melting armour with a welding torch is extreme annealing – the metal involved in the weld goes from ‘hard as nails’ to ‘porridge’ (technical terms) which is not ideal for armour, requiring complex edge shaping to offset outside and inside welds; the problem being much more difficult at multi-plate corners. To the onlooker its just a weld; to the armour designer its a work of art. Packaging lots of mechanical stuff in very small spaces is an art. Keeping them cool enough with very restricted airflow (ballistic louvres) is an art. Giving the crew enough space to work when the weapons, comms, air-con, CBRN filter, stowed ammunition, personal weapons, drinking water, diesel fuel and most important the BV are all in the vehicle with them – its an art. On top of that is the materials science that goes into the armour – all just matt green slabs to the onlooker, but highly advanced technology all the same. I might even suggest, weight for weight, there is more complex science and technology in green armour than in black boats.

The comparison drawn by TD earlier was between surface ship engineering and heavy armour engineering, and the apparent bias towards shipbuilding needing strategic funding even if the yards and slipways are empty, where the two heavy armour plants (ROF Leeds and Vickers Newcastle) were allowed to close down without the slightest interest from HMG. I suggested the general man-in-the-street, having no detail knowledge of technologies military, will look at a large grey warship with white ensign fluttering at each end and have feelings of pride and support for the vessel. This man-in-the-street will also want to know there are enough grey ships for the defence of the realm, without really knowing what criteria defines ‘enough’. But when this fellow looks at a dull green mud-splattered armoured vehicle, there will be no particular interest – man-in-the-street doesn’t know how many there might be, doesn’t really care, probably doesn’t see the point of the things anyway – there is not going to be the level of public awareness nor support for 60t muddy armour as there is for 6000t graceful warships. Consequently, to the Politician with an eye on election day, supporting shipyards will engender a degree of public support (and votes) where supporting tank factories would not.

I do credit the Politicians with the support for Barrow’s facility – black boats probably raise as much interest with the general public as do tanks and for much the same reason – they all look alike and not very interesting, not like the fine surface fleet vessels that look so very photogenic. Although I suspect more voters worry that we have the ability to build submarines than worry that we lost the facilities to build heavy armour.

Hmmmm. Wasn’t meant to be a long missive. Oh well…

x
x
November 6, 2013 5:12 pm

@ Pab

Well then you should know better you silly sausage!!! :)

dave haine
dave haine
November 6, 2013 5:12 pm

@ a

Nothing to do with quality of work at all. In fact if you listen to a quote from a unamed BAE source at Portsmouth, ”They always told us we produced the better work, but what use was that”. But blokes are still losing their jobs, so it’s nothing to crow about.

Ever worked in a town that loses that many jobs? I have, and it’s not only the workers directly affected, its the whole town from the council losing taxes to shops losing business. I should imagine Portsmouth isn’t a happy place tonight. I think the ratio was 1 to 4 direct to indirect losses.

The idea that it’s better to concentrate the work in nearby places to achieve logistic economies, yes fair enough. The clyde is also nearer steel production, so you could argue that is sensible, too.

However, with my cynical head on, and ignoring the result of the referendum, the problem is the reduction in capacity for ship building. it’s not a industry that you can just kickstart, it takes years of training and the building up of skills. If we had a vibrant commercial shipbuilding industry, like Norway, then it wouldn’t be a problem, but we haven’t, for reasons that are too complex and irritating to mention here. We haven’t even got the repair yards that could convert to building.

Lets just hope that we won’t one day need to produce large ships in a hurry. Or indeed some evil bugger doesn’t sink a bomb laden tanker right in the mouth of the Clyde.

Don’t get me wrong- I’ve nothing against the lads on the clyde. It’s just that I’d rather see no-one lose their jobs, especially in what feels like an awfully dodgy way.

mike
mike
November 6, 2013 5:24 pm

So things are so hunky-dory with CVF, Astute and potential T26 that once again we have a brain drain of ship builders :D

That was my first thought, but of course, reasons go wider deeper than that simple statement.

Shame though, lets hope BAe and MoD(N) pull their finger out and actually try to export one of this nations best military manufacturing capabilities; building grey men-o-war.

Gloomy Northern Boy
Gloomy Northern Boy
November 6, 2013 5:25 pm

@ Dave – EU law allows us to reserve ships to our own Yards but not somebody else’s – if we don’t buy domestically we need to go out to tender right across the EU, and Scotland is in the mix with Spain, Poland, Germany, Rumania…so we will stay in the successor UK. Also the Government are briefing to that effect, because no Party could survive sending a Warship deal overseas by accident by trying to send it to a Country that just told the rest of us to get lost…which is how I will feel, I suspect along with many others, if the Scots vote to break the place up

Is that an incoming rant on the Starboard bow? Dive,Dive, DIVE!

GNB

Bob
Bob
November 6, 2013 5:32 pm

TD,

Actually HL’s last paragraph is well wide of the mark. The OPV procurement is clearly the most cost effective way of keeping the yards open, the three boats combined will come to significantly less than a single Type 26. At the same time it gets the RN new and better OPVs and some of the cost will be recoverable from selling the River class.

If the UK wants to sustain its shipbuilding industry this sort of subsidy is the only way forward, at least they are paying BAE to build ships rather than do nothing.

Bob
Bob
November 6, 2013 5:35 pm

Dave,

Based on the SNP’s own ill-conceived defence plans they would have virtually no requirement for any defence goods- so it would certainly not be worth giving them multi-billion pound shipbuilding contracts.

Martin really needs to chill out and except the fact that an independent Scotland will not be able to leach off the UK as it does now.

Dave
Dave
November 6, 2013 5:37 pm

Ha ha

No Rants from me GNB

I was looking at it from the point of view that foreign aid was sent to India and I believe Brazil to sweeten them for Typhoon Sales, both of which failed. Someone above talks about RFA’s being built in South Korea as a sweetner for selling Wildcats so i was just wondering what the Rump UK would likely be offering as a sweetener to Scotland to sell it some hardware.

Next big thing I suppose will be when the UK orders US Maritime Patrol Aircraft, will they come home to Kinloss? I suspect that will be announced a lot closer to the referendum date though.

x
x
November 6, 2013 5:48 pm

@ Bob

No HL is probably on the money. You don’t understand Whitehall accounting is different from real world accounting. The cost of the 3 OPV could come to a tenth of the cost of a T26 and it would still be enough grounds to cancel T26 13…………

Apart from the flightdeck issue the Rivers are pretty damn fine ships. If we were gaining a BAM and medium gun/cannon RWS with EOD it would be a win. All we are going to get is slightly larger, newer versions of what we have. No real gain. It is just make work.

Now if cancelling T26 13 gave us 3 OPVs and enough 2087 for all sea going (commissioned) T26 or some other toys like 5in for all the class then it would be worth it. But it won’t. The money will disappear……..

jedibeeftrix
jedibeeftrix
November 6, 2013 5:51 pm

“I believe that having spent the best part of £3 billion on building the carrier, the £70 million-odd a year that will be required to operate it looks like good value for money.”

*fingers crossed*

looking forward to NAB’s thoughts….

Bob
Bob
November 6, 2013 5:54 pm

x,

I know exactly how Whitehall accounting works. Which is why I know HL is wrong.

x
x
November 6, 2013 6:08 pm

@ Bob

Obviously you don’t. These OPVs will cost us T26 13 without a shadow of a doubt with no gain.

HurstLlama
HurstLlama
November 6, 2013 6:11 pm

@Bob

“If the UK wants to sustain its shipbuilding industry this sort of subsidy is the only way forward, at least they are paying BAE to build ships rather than do nothing.”

Yup, I agree, but that isn’t really the point. Where is the money going to come from? Got to come from somewhere and I suspect HM Treasury will have a definite view. If you know about how HMG money works I am surprised at your comment that the T26 class numbers won’t be affected. They will.

Bob
Bob
November 6, 2013 6:15 pm

HL,

The announcement is clear, the money is coming from cash that would have been required to sustain/manage capacity in the absence of orders. It is not coming from the T26 pot.

x
x
November 6, 2013 6:19 pm

Always thought it was an odd number 13 (beyond it being an odd number!) We have 13 T23 so we replace them one for one when we only have 13 because they sold some….

……..and that is without getting into GP vs ASW fustercluck some here so enjoy.

x
x
November 6, 2013 6:23 pm

bob
adjective
1.
(of a person or action) showing a lack of experience, wisdom, or judgement.
“the rather bob young man had been totally misled”

Aquasubz
Aquasubz
November 6, 2013 6:30 pm

Hi. As far as the OPVS you’d imagine this design would be a good bet.

http://seawavesmagazine.blogspot.co.uk/2013/08/htms-krabi-commissioned.html

(Also not forgetting the roussens, ex VT, of which I also think we need a few :)

I do think that with the changes in north africa, and tension in Greece and southern Europe that a greater presence in the meditteranean with a squadron at Cyprus and Gibraltar is sensible. And opvs are a cheaper way to provide a mixed force level and level of response than simply frigates.

A sad end though to production at Portsmouth and I do struggle to understand why we aren’t building some of the T26s at Portsmouth in any event.

No-one can tell me that the MOD do procurement efficiently so it can’t be the case that cost is the determinant. Strategic interests of all of the UK are paramount and maintaining a diversified industrial base and workforce should be one of them.

IMO 2 shipyards in Scotland is one too many, if we have to lose 1 of 3

All Politicians are the Same
All Politicians are the Same
November 6, 2013 6:35 pm

The only certainty ref T26 and numbers is that everyone here is guessing based on their own views and prejudices. The facts are it has not reached main gate, we have a Referendum in Scotland next year(if it was a Yes vote would BAE move construction and inferred costs would cut numbers?). We have a UK GE in 2015. We have an SDSR of some sort in 2015. We have the evolving Geo Political landscape and no doubt at least 1 “strategic shock” between now and then.

Ref the OPV I am pretty certain the BAE 90M design is not Merlin capable. Increasing the capability of the OPV would definitely “increase” the opportunity for some to use them as an excuse to cut T26 but 1SL hates Corvettes as such and we are unlikely to see one appear.

x
x
November 6, 2013 6:44 pm

Admiral Sir George Zambellas, the First Sea Lord, said:

“These new patrol vessels will build on the proven performance of the River Class by adding a flight deck to take the Navy’s Merlin helicopters and by adding operational flexibility through extra storage capacity and accommodation. They are very welcome.”

Mark
Mark
November 6, 2013 6:45 pm

Have to say sounds somewhat sensible to me they could be used to land a merlin on, to extended range in the north western approaches for one thing. At minimal cost 3 new boats for the navy to experiment with. Hms Clyde appears to work well perhaps we could market this platform to more countries.

x
x
November 6, 2013 6:51 pm

The Rivers should have flight decks from the get go. This is just correcting an earlier cock-up.

We buy Castles because of the growing importance of the helicopter in the UK’s EEZ. We replace them with a bigger ship without a flightdeck. I wonder how much we saved?

All Politicians are the Same
All Politicians are the Same
November 6, 2013 6:53 pm

@X
Yes, I think we will see an evolution of the BAE 90M OPV with a Merlin capable flight deck. We will not see 76MM, sonars, AShM, CIWS and full function ops rooms, or probably a hangar.

Personally am not certain about the fascination with simply embarking a heavy weight ASW helo, thinking of hwat an OPV does would rather be able to land and hangar a Wildcat which give me superior surface search capability and if push comes to shove some ASuW punch.

Pte. James Frazer
Pte. James Frazer
November 6, 2013 7:05 pm

APATS

Points on numbers/politics all well made. I think HMS Clyde can take a Sea King on its deck so could probably fit a Merlin. No hangar though which limits the ships utility as a Horn of Africa counter-piracy, or Caribbean/West Africa counter-drug running option.

Khareef class just delivered to Oman has a hangar though…..but could be classed as a Corvette. Ocean Going OPV / Corvette what’s in a name? Still like BMT Venator 110 best though with flexible hangar etc….

X

I agree. If we ended up with 3 extra large ocean going OPV’s to take the pressure off the frigate/destroyer fleet at the expense of 13th T26 and ploughed the money into fitting all 12 others with 2087 and (wish) missiles for the silos etc that would seem like a good result. Too much common sense for the muppet show though?

Repulse
November 6, 2013 7:09 pm

As a born and bred Southerner I am gutted by this. The only reason why this makes sense is that there has been a very clear path set by Scottish people in the last government to protect their self interest. This smells of complete political bullshit, which can only further alienate the rest of the UK population as we indulge our SNP brats up north.

I welcome the news of 3 OPVs (even if it costs 1 T26) – if they replace 3 relatively new OPVs I give up… the farce of it all is that the current Rivers could be upgraded for a fraction of the cost to be OPV(H)s…

I am utterly depressed…

Fedaykin
November 6, 2013 7:18 pm

Well Mike Hancock MP for Portsmouth has got the OPV that he has been selflessly campaigning for, he must be delighted! Oh hang on they are being built on the Clyde…

I would loved to see Hancock’s face when the OPV order was announced followed by the decision to build on the Clyde. Maybe he shouldn’t of campaigned so hard for it, at least he can’t pester at defence questions any more on the matter as the answer will be “The OPV have been ordered as so desired by the MP for Portsmouth South”.

Aquasubz
Aquasubz
November 6, 2013 7:28 pm

Like spats I also don’t really get the need for Merlin in this instance and would have though wildcat would have been a more appropriate platform for a fairly small vessel. Especially as designs are already done for lynx.

Aquasubz
Aquasubz
November 6, 2013 7:28 pm

Like apats I also don’t really get the need for Merlin in this instance and would have though wildcat would have been a more appropriate platform for a fairly small vessel. Especially as designs are already done for lynx.

SR
SR
November 6, 2013 7:40 pm

A great pity that Portsmouth will go as a shipbuilder. The Scottish yards have a poor track record of building small warships for export. VT were the best for that business. Pity.

The new OPV’s will replace the Rivers as more capable fishery protection assets, but more in taking on the Fleet Ready Escort duty and supporting SAR Ops at range. This is very good news – a hull we are familiar with.

As for the Rivers, I sincerely hope the RN makes the leap it has been talking about for years and makes a start on the MHPC concept. It will cost us some MCM hulls, but the Sandowns aren’t brilliant for what we need any more. The Hunts will last another lifetime with their new engines, and if we are going to continue paving the way for remote MCM ops the River is an ideal platform for it. Should be interesting.

WiseApe
November 6, 2013 7:42 pm

If you scroll about half way down to the heading “Export Variant” I think this is what we can expect to see. Basically a midships plug:

http://www.naval-technology.com/projects/river_class/

Edit: They have a crew of about 30 and we can’t afford that – and we’ve just pissed half a billion overboard from a Type 45. I am going to get my swearbox out of the pantry.

HurstLlama
HurstLlama
November 6, 2013 8:02 pm

@Bob

“The announcement is clear, the money is coming from cash that would have been required to sustain/manage capacity in the absence of orders.”

I am going around in circles here. What pot of cash is there set aside to sustain/manage capacity in the absence of orders? Point me to a line in the MoD budget. I can’t find one and in the absence, of such I am fairly sure where the funding for these new RN vessels will come from and it ain’t Welfare or Overseas Aid budgets. Then looking forward, you will know (since you have said you understand exactly how Whitehall accounting works) that HMT will look at the capabilities of these new ships, see that they are capable of embarking ASW Merlins and demand cuts in the Frigate fleet.

@Aquasubz

I think the 1st Sea Lord can see what is coming and putting in a bid for Merlin Capable vessels because he knows he is going to lose some frigates because of this stitch up and at least that way he gets some lilly ponds for his lost ASW helicopter platforms.

@Think Defence

“Just watching Phil Hammond on C4 news, surprisingly, less than impressive

This is the first time I have seen him shaky”

Not surprising really, Boss, this is the first time he has had to try and sell a proposal that makes no sense for his department. I was particularly saddened to see him announcing the “new” investment for Pompey – an announcement that was first made in 2011. Re-announcing investment stories and pretending its new money was something that was supposed to have gone out with Gordon Brown.

x
x
November 6, 2013 8:13 pm

@ APATS

Never ever said here that our OPV’s need sonars, AShM, CIWS and full function ops rooms, The gun is a different matter, it all depends on what the French have in the area. Seriously it would be nice to see a cannon on a RWS with an EOD this is the 21st century after all……..

As for,

Personally am not certain about the fascination with simply embarking a heavy weight ASW helo, thinking of hwat an OPV does would rather be able to land and hangar a Wildcat which give me superior surface search capability and if push comes to shove some ASuW punch.

Who said anything about embarking? If we are to buy 3 what will turn out to be 2000 ton plus ships surely being able to land and service the RN’s largest helicopter isn’t too much of a stretch? Merlin weighs less than 1% of the ship, are you scared about structural damage? :) Merlin has a range of 450nm our EEZ (like all others) extends to 200nm. Even though we will never see now Merlin SAR I don’t think it is asking much for RN ships based in the UK to be able to handle the RN’s largest helicopter. Now a BAM-esque ship would be nice and I would agree a Wildcat (sized hangar) is all we would need as long as the flightdeck was Merlin capable. Don’t trouble yourself about this your boss and I agree on this issue so you will have to just face aft and salute……. :)

I am troubled that we live in age where our destroyers are bigger than cruisers and can land a Chinook, destroyers too few in number to bugger about with and everybody wets themselves with excitement. Yet somebody humbly suggests a 2000 ton ship needs to accommodate the RN’s largest helicopter and its 20 questions………

Bonkers.

All Politicians are the Same
All Politicians are the Same
November 6, 2013 8:16 pm

@HL

Embarking an ASW Merlin does not an ASW platform make. We are only getting 30 Merlin HM2 and given the fact that T23 and T45 will be able to embark them. Tide and wave Class tankers will be able to embark them and the CVF will be able to embark them we are not short of assets to operate them from. Without an air weapons magazine, a hangar or maintenance storage and space it will be extremely limited.
The only evidence we have where the money is coming from is a Government statement and as I illustrated earlier there are so many unknown factors we are all just guessing. about any effect on T26 numbers.

Fedaykin
November 6, 2013 8:19 pm

I suppose what puzzles me is why three OPV to replace ones that are in a pretty good state? Why not a replacement for RFA Diligence, a vessel that is heavily used and needs replacing on the not too distant future. There have been studies and BMT suggested a conversion of a cable ship or another offshore vessel. Why not expand on those concepts and do a keel up build derived from a commercial design. Or how about a serious look at what replaces RFA Argus, again a vessel that is getting on a bit and performs essential tasks.

The OPV thing feels like an idea dashed off the back of a eCigarette packet, did they just want to irritate Mike Hancock?! We don’t have to find a new crew for a Diligence or Argus replacement as they would come off the ships as they retire also they were meant to have a funded replacement anyway so don’t threaten the T26 build.

Where is the joined up thinking? Why didn’t they look at the whole fleet RFA included and ask “what do we need to replace soon”?

Chris.B.
Chris.B.
November 6, 2013 8:23 pm

Mr. Hammond made the point during his speech that the money would come from the headroom (or whatever he specifically calls it) that was made in the budget; http://defencewithac.blogspot.co.uk/2013/11/carry-on-up-clyde.html

Aquasubz
Aquasubz
November 6, 2013 8:25 pm

The sad thing actually was that my little boy caught snippets of Ch4 news earlier. I take home down to the historic dockyard and out on the harbour tour to see there big exciting grey things at 5 or 6 times a year. He loves it. Hard time explaining to Him with that insurmountable childhood logic, why after 800 years of shipbuilding for the navy some peopke thought it was a good idea not to build ships at Portsmouth anymore.

Had to move the conversation on to convincing him that warrior and victory would still be there, just to get out of it as I really couldn’t explain.

Red Trousers
Red Trousers
November 6, 2013 8:25 pm

Politics gone mad.

We’ve bought virtually two brand new navies in the last decade with more to come in the next 5 years: Astute, QEC, T45, MARS, F35B, CROWSNEST, now followed by T26, Successor, and as a special bonus, new OPVs. It must be getting towards 100% of the Fleet being new and shiny.

Note: not a rant at / against the Andrew. Good effort by them. But that ToBA that has caused all of this was a real piece of pork barrel contracting. Not a dig either at Amyas Morse who was the Defence Commercial Director who oversaw the ToBA and who is now running the NAO.

Common to virtually bloody everything is BAE Systems, who now risk share to 50% only, with a specific limitation on risk of profitability. And under everything is the utterly ruinous imprint of Gordon Fucking Brown, who was instrumental in the QEC decision to buy carriers we don’t need that are built in his backyard, and the ToBA which had the MoD over a pork barrel for a decade.

Phil
November 6, 2013 8:26 pm

*Nostalgia*

Been a long time since we’ve built ships for the Navy for the sake of building ships for the Navy.

We can all leave our front doors open now and go shit in the toilet outside.

Fedaykin
November 6, 2013 8:28 pm

@RT

Agreed in respect of Gordon Brown

Don’t agree in respect of QE class, they are essential if we want to be able project power globally

Such is personal opinion on an open forum ;-)

Aquasubz
Aquasubz
November 6, 2013 8:29 pm

Sorry for typos. Apparently you can’t edit after another comment has been posted and I’m using a small thingy!

Red Trousers
Red Trousers
November 6, 2013 8:39 pm

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/16847/BAESystemsSurfaceShipsTermsofBusinessAgreementREDACTED.pdf

ToBA, for those interested in reading with mounting horror the most one-sided deal in the history of defence contracting.

Still, having done my “UK Contract Law” training (thanks, employers), and myself done – for considerably smaller amounts of money – various deals involving entrancing IPT Leaders and MoD Commercial wallahs with breath-taking and completely plausible visions of new capabilities, the law doesn’t protect either party to a contract from the impact of doing a bad deal.

HurstLlama
HurstLlama
November 6, 2013 8:42 pm

@APATS

“Embarking an ASW Merlin does not an ASW platform make. We are only getting 30 Merlin HM2 ”

Fair go, Mr. APATS. One wonders then why the first Sea Lord made a point of mentioning Merlins in his comment on these new, and unplanned, vessels. He is the 1st Sea Lord after all and one should hope that he has some grip on what the RN is about.

B

That “headroom money”, which only a few days ago Sir Humphrey was telling us had gone on the carriers, is in danger of becoming like the bankers bonus tax for the Labour party. Spent umpteen times over.

The BAe statement published earlier today said that the 6 type 45s made up half the RN surface fleet, they might know something we don’t.

Jed
Jed
November 6, 2013 8:44 pm

Phil

How are we building ships for the sake of building ships exactly ? We dont have enough to actually fulfill all the required tasks.

HurstLama

You better bloody bet someone somewhere (in summer time…. sorry Simple Minds reference) in Government had accounted for this money already, because as RT notes, the Govt. signed its life away with the evil mega-corp by putting ink to clauses that basically said “if you dont send us enough work, your paying for the draw down and redundancies etc etc”

So surely all those who bemoan chasing pirates with Daring class destroyers and champion the political harmony of a “Defence industrial strategy” cannot complain about this at all – shiny new ships, built with money that other wise would have been spent on penalty clauses and putting the Glaswegian working man on benefits ????

Cake and eat it, much ?

Challenger
Challenger
November 6, 2013 8:50 pm

I certainly picked the wrong day to be out and about…

‘The MoD confirmed that it would commission three new ocean-going Offshore Patrol Vessels to play “a key role in counter-terrorism, counter-piracy and anti smuggling operations”‘

‘The ships are expected to replace the current, smaller River Class vessels which have been policing the UK’s waters since 2003’

Well which is it, it can’t be both!

Like most people I welcome the idea of 3 new OPV’s to sustain shipbuilding (even if it’s not at poor old Portsmouth) and id even consider sacrificing the 13th T26 to get them, but using them to replace 15 year old ships is pure madness!

I think it’s great that BAE are being made to actually work for their regular cash subsidy rather than resting on their laurels doing sod all, but let’s at least see the RN get something out of it in the long run this time!

I guess SDSR 2015 offers a glimmer of hope!

All Politicians are the Same
All Politicians are the Same
November 6, 2013 8:52 pm

@HL
Well if the flight deck is big enough to embark a Merlin then it can embark all sorts of other useful stuff. The problem of course being the trials package and approval required to do so :( As SR, support of long range SAR being one possibility. It is a bit like the T45 and Chinook comment it seems to be the fashion. Another interpretation is that the ability to embark a large helo will be used to down play the fact that its is an OPV and not a Corvette.
Containerised UAV Ops would be useful within the EEZ.

x
x
November 6, 2013 8:58 pm

I am glad my comment on Merlin and the new OPVs got consumed by the Spam Monster. :)

EDIT: Whoops! It appears to have appeared. Good for you.

Challenger
Challenger
November 6, 2013 9:11 pm

Having just read the full debate Hammond does at least say quite clearly that the decision on whether new patrol vessels will replace the River’s is to be decided by the Royal Navy during the 2015 SDSR and that it will basically come down to how much money is available at the time.

The fact that the money the gov would be giving to BAE to do nothing anyway is going to pay for the ships construction and the low running costs/small crews that OPV’s always have give me some hope that they will be seen as justifiably cheap enough to be retained in addition to the River’s and used for counter-piracy/drug- interdiction work instead. Having just 1 or 2 high-end escorts freed up would make a big difference.

Although knowing the track record of BAE & the MOD in these kind of matters I shan’t be holding my breath…

Observer
Observer
November 6, 2013 9:15 pm

To be fair, most ships work on an approximately 20-40 year cycle, lower end for smaller ships, higher end for the bigger ones, so by the time the new OPVs finish their build cycle, they would be just in time to replace the Rivers slated for replacement.

This is also why it is a good reason to save 4% of a ship’s build cost per year, so when it comes to replacement time, you got the cash in hand to pay for it. Not how the world works I’m afraid, most MoDs live hand to mouth.

I won’t mind the OPVs being able to land Chooks, though it may sound like overkill. Chinooks are used as emergency helivac due to their speed, being able to lilypad them off OPVs would increase their medical coverage range substantially. Doubt it will happen though, the cost-benefit analysis is a bit hard to justify. Possible, but hard.

Mark
Mark
November 6, 2013 9:17 pm

Chris That doesn’t quite chime with the transcript TD has above two quotes being as below did this come after in other question? Only read this thread so missed the actual announcement and press reporting ect

“I am therefore able to confirm to the House that the revised cost of the carriers remains within the additional provision made in May 2012 in the equipment plan; that as a result of this prudent approach, the defence budget remains in balance, with the full cost of the carriers provided for; and that the centrally held contingency of more than £4 billion in the equipment plan that I announced remains unused and intact, 18 months after it was announced.”

And

“The marginal cost of these ships, over and above the payments the MOD would anyway have had to make to keep the yards idle, is less than £100 million, which will be funded from budget held within the equipment plan to support industrial restructuring.”

I have heard it said over the years that we don’t have enough patrol vessels and that we use sandown or hunt vessels to do that. This could of course be a gd time to take an opportunity to build actual patrol vessels.

Hms Clyde was produced in Portsmouth I think but what was the last warships launched there for the RN? I had heard it was to small to launch frigates ect if that’s the case hopefully the workers can find jobs in the repair yard ect but under it all may have been the correct decision. Obviously barrow doesn’t count as being able to build navy ships in England to hear some you’d think they’d closed Portsmouth and scrapped the navy.

Engineer Tom
Engineer Tom
November 6, 2013 9:21 pm

The Khareef Class were the last ships built, 3rd launched in 2010ish.

HurstLlama
HurstLlama
November 6, 2013 9:25 pm

Mr. Jed, if the outcome of this nonsense were to produce three additional ships that could go off chasing pirates etc. AND leave our already pitiful war fighting ability intact, you would not find me moaning (I have made no comment about stopping shipbuilding in England). However, I don’t believe that’s going to happen. The RN was already vulnerable to more cuts in 2015 and forcing them this new class (that they had neither wanted or planned for) will be used to hack back further on the ships we do need.

In case some think I am exaggerating I put forward the T45 class. A strategic defence review concluded that we needed 12 of them. Without any change in the threat, or the commitment, levels it was decided we could do with just 6. So going down to six or seven T26, which is what BAe seem to think (its them that said the T45s equal half the surface fleet) doesn’t seem impossible for politicians, especially now they have the plan to provide some some shiny new OPVs (not that anyone knows what these new vessels will be able to do).

Dan the man
Dan the man
November 6, 2013 9:46 pm

With so much apparent investment in UK warship building, where are the exports of T45 etc?

Chris.B.
Chris.B.
November 6, 2013 10:15 pm

@ Mark,

I think it was something in one of the questions later, when he probed about the cost. I was half paying attention at some points, so I might be remembering bits wrong. Suffice to say that the money exists and that its not additional expense. Though I find it odd that the MoD had a budget for supporting Industrial Restructuring. Either something like this has been planned (as in, the MoD have been in on it) for a while, or he’s pulling that phrasing out of his arse.

Fat Bloke on Tour
Fat Bloke on Tour
November 6, 2013 10:29 pm

TD

Looks like you have hit the mother lode with this.

Interesting to see what BWoS / MOD come up with on the Colonial Sloop front.
Willing to bet it will be crap / un-exportable in spades.

No luck regarding Portsmouth.
The took BWoS ‘s gold and crashed and burned.

Feel sorry for the original VT workforce.
They had a viable little business and now nothing — either locally or in the region.

Big loser will be Plymouth.
Everything mobile will move to sunny Hampshire.

Great what can happen when you are commutable from London.
At least Plymouth has the Trident refits.

Case of what goes around comes around — if you wait 20 years.

Fat Bloke on Tour
Fat Bloke on Tour
November 6, 2013 10:33 pm

TD

Whatever happened to the £1.3bill budget for small ships?
Mines / survey / patrol / stuff?

S / Sheet Phil lose it behind the couch?
Or was it the first to go as he tried to sort out the “Black Hole”?

Waiting for the media to pick this up.
On this matter the BBC is a disgrace — 500 year tradition my erse.

Gloomy Northern Boy
Gloomy Northern Boy
November 6, 2013 10:34 pm

Up periscope – all quiet – lets surface for a breath of fresh air…

the Man – The T45 was the answer to a question that no more than half a dozen Navies are capable of asking, and all of them have the capacity and will to build high end ships of their own…it never had much export potential, although I think I’ve seen it suggested that it might have been reconfigured to fire a wider range of missiles for a customer with money to burn.

The T26 will – hopefully – be a different kettle of fish – as will this rather random new class of OPVs with Corvette Tendencies.

GNB

Down periscope, dive and zig-zag.

Will Sheward
Will Sheward
November 6, 2013 10:34 pm

@HurstLlama you’ve misread the commas in the “half the surface fleet” quote.

“The business also provides support services to the Royal Navy’s Portsmouth flotilla, including the six Type 45 destroyers, which accounts for around 50% of the surface fleet.”

= the Portsmouth flotilla accounts for around 50% of the surface fleet and that flotilla includes the 6 T45s.

Fat Bloke on Tour
Fat Bloke on Tour
November 6, 2013 10:48 pm

GNB @ 10.34

First rate AAW assets don’t have export potential …?
Has anyone told the Spanish?

T45 are MOD / RN one club golfers masquerading as profit centres for BWoS.
That’s not to say that BWoS put in a lot of effort into them.

just that they found out they as a normal competitive business were crap.
Could just about handle the techie stuff just case it was stuff no-one wanted at the cost they wanted to charge.

BWoS are about as competitive as a vegetarian lion.

Rocket Banana
November 6, 2013 10:51 pm

Not that I’m particularly into conspiracy theories but I am really starting to think that the UK is doing the “toxic debt sell off” trick by offloading the non toxic assets to a separate “company” which the owners then migrate to.

The separate “company” being Scotland of course.

The “toxic debt” being our looming pension crisis – which will cripple us completely – and the slow spiral into oblivion they call the NHS.

Whilst they’re at it, what else is of value in Britain that we can give to a soon-to-be independent Scotland or Wales? Maybe they’ll ring-fence “The City” as a separate state akin to the Vatican City and let the rest of England rot?

As you can tell. I’m rather upset :-(

Time to emigrate.

Mark
Mark
November 6, 2013 11:03 pm

Having read this elsewhere I’m looking for clarification from the naval minded few. That the current set up of shipbuilding in Portsmouth actually only started in the 90s and was as a result of VT moving from Southampton and the last actual warship Portsmouth built for the navy was a frigate in the early 60’s? It was appear if true the 500 years legacy is media headline writers gone sentimental?

Fat Bloke on Tour
Fat Bloke on Tour
November 6, 2013 11:08 pm

M @ 11.03

The BBC R4 news at 6.00pm was shameful.
The oft repeated “500 year history broken” is a complete fabrication.

The story looks like a pre-pack mouthed by a compliant BBC.
It is as if we were back in the times of the Miners Strike.

The state broadcaster broadcasting state propaganda.
The only issue is who developed the story?

Gloomy Northern Boy
Gloomy Northern Boy
November 6, 2013 11:17 pm

@FBOT – genuine question – are the Spanish building and exporting an equivalent of the T45?

GNB

Fat Bloke on Tour
Fat Bloke on Tour
November 6, 2013 11:25 pm

GNB @ 11.17

Simple answer is yes.

Not a Boffin
Not a Boffin
November 6, 2013 11:32 pm

Well I didn’t expect them to announce the single yard choice before the referendum, but in some ways it’s better for all concerned. In case you’ve never lived under the certain knowledge that sometime in the near future a decision will be made that may or may not close your place of work, I can tell you it’s quite corrosive.

A few facts to add to the debate.

1. Portsmouth ship factory closing does not end five hundred years of shipbuilding on the site. That actually ended at the back end of the 60s and was only resurrected after 2000, when VT were convinced to move their facility for a shot at building T45s, which Woolston (their Southampton yard) could not have done.

2. The future programme for the RN cannot support multiple yards – certainly not 3. There is no prospect of a massive boost in fleet numbers, so either major exports or rationalisation had to come.

3. BAES are not good at warship build exports – see Brunei corvettes (rejected) and Omani Khareef (£500M over contract price – allegedly) for details. The advent of Korea and China as warship exporters is going to seriously dent any residual chance they had of building export ships. They may of course be able to design them for licence build overseas, but you don’t need a UK shipyard for that.

4. The MARS tankers went to Korea for two reasons. Even had there been capacity in the BAE yards, it would only have prolonged the inevitable. The same rationalisation would still have been required once they completed and we would have paid three or four times the price for ships that are needed now. In other words, DSME were the only affordable option. The two Wave tankers cost £150M+ each over ten years ago, god knows what they’d cost in a BAE yard now.

5. What ever design the OPVs are, they will have shed-loads of hangers. Holding up the pipe and cabletray runs. They may have a hangar, but I’d be surprised.

6. The OPVs are being ordered because they can’t order the T26 yet, simply because “issues” (some far from insignificant) remain with the design. The MHPC (vessel) will be another 15 years before it arrives. They simply could not start cutting steel when they need to, because it is the steel trades that are currently running out of work in both Portsmouth & Glasgow. What Moscow Mike envisaged as a means of stringing out the process has rather hilariously ended up supporting the Clyde. As has the transfer of PoW modules. Unpleasant though it is, it actually makes the decision and ends the agony of waiting for people.

7. The BAE systems organisation (and for that matter the nice people at Appledore) cannot cost-effectively bid for commercial ship contracts. They have chosen to tie themselves and their size and capacity to serving the RN – a single organisation with limited funds. I don’t particularly think its going to work, but there is no real alternative. Someone mentioned the vibrant Norwegian industry. It is, but it has one major advantage – the Norwegian oil industry (aka the norwegian mafia) can place contracts where it likes, because Norway is not a full member of the EU and is therefore not subject to the EU competition directives. Therefore while they place a lot of either very complex or very large orders overseas, they can keep a core of mid-sized fairly complex vessels in build in Norway. It isn’t like that for the UK.

8. There will be no exports of T45. Their propulsion system is no longer in build.

9. Interestingly, the Clyde vs Pompey decision has been couched in terms of cost base. With the exception of the more complicated launch method in Portsmouth, I find it difficult to see where that difference is. I’m struggling to understand how maintaining two single use (build only) sites (Scotstoun & Govan), both of which (particularly Scotstoun) occupy large riverfront areas on opposite sides of the river can be significantly cheaper than a pretty much brand new facility which can be dual-use (build and through-life support) on a single site (Portsmouth). Had the ability to build 220m-class ships been critical then Portsmouth would have struggled even more, but would not have been ruled out. Unless there’s a significant wage differential (which is possible), then I just can’t see beyond the desire either within BAE (don’t rule it out) or more likely HMG not to be seen to end shipbuilding on the Clyde.

10. I realise it’s now part of the curriculum at Sandhurst and in the letters page of the Telegraph, but the Brown & Rosyth myth is a myth and a rather tedious one, nothing more. As opposed to the man himself, who was and is, a cnut.

Gloomy Northern Boy
Gloomy Northern Boy
November 6, 2013 11:33 pm

@FBOT – What is it? GNB

Challenger
Challenger
November 6, 2013 11:37 pm

So all of the news coverage I have seen and heard on Portsmouth this evening has failed to mention that the yard there can’t construct anything bigger than a corvette/small frigate and as others have stated the ‘500 years of shipbuilding’ thing is a fallacy seen as it stopped in the 1960s and was only revived by the VT group moving in a few years back (and the place hasn’t been swapped with orders since then).

It’s not hard to make a convincing political argument for why the Clyde yards have been spared. However the simple facts are that 1. Portsmouth will remain open as a repair and refit yard, 2. Both these reductions and the confirmation of an initial T26 order won’t be happening until 2015 (after the Scottish referendum) and 3. Keeping both the Clyde yards open is clearly the better option due to their close proximity to each other and capacity for larger projects.

All Politicians are the Same
All Politicians are the Same
November 6, 2013 11:38 pm

@GNB

Navantia lead the design on the Hobart Class but they are being built in Australia. They did design and build the Fridtjof Nansen-class frigate for Norway.
Are either of them T45 equivalents? The Hobart is an AAW Destroyer but relies upon 2 Mk 99 Fire control radars and in a purely AAW complex environment is less capable than a T45 but it has been built with a 48 cell MK41 cell and a good sonar as well as Harpoon as standard. So it is a more multirole asset with good but not as good AAW capabilities.
The Fridtjof Nansen is an ASW Frigate that during the design phase was beefed up with a Mk41 Silo to allow it to fire ESSM but again that is reliant on 2 Mk82 FC radars.
Both ships have far shorter legs than T45, FN 4300Nm at 16kts, Hobart about 5,500Nm at 18 vs T45 7,000Nm at 18kts.
Yes I would say that the Hobart is a T45 equivalent, less capable in her primary role but with more flexibility. The FN is an ASW Frigate with a good AAW capability.

Engineer Tom
Engineer Tom
November 6, 2013 11:52 pm

@ Mark

Completely correct, though VT (they moved to Portsmouth in 03) etc. built vessels over in Southampton during that gap, a better definition is the Solent has finally lost it’s shipbuilding industry after 500 years. Another fact is this is the last surface vessel shipyard in England. that is a much bigger deal, it means that literally there will be only one yard (the Clyde counts as one really) for future contracts, BAE will be able to set the price in effect.

Also I don’t think Portsmouth is going to sit back and just let this happen, the MP’s may not be against this, but the local unions aren’t happy, and I can see the local unions breaking from the national line on this and fighting the job losses.

Gloomy Northern Boy
Gloomy Northern Boy
November 7, 2013 12:53 am

@APATS – Thanks – so T45 has both the legs and higher performance in the AAW role, but is a specialised ship most useful if you might want to park a task force off a hostile coast with a newish air force? but is less useful than the others if your planning framework doesn’t include that possibility?

GNB

martin
Editor
November 7, 2013 1:40 am

@ Bob

“You are just being silly now. Nobody is suggesting that Scotland “could not wipe it’s own arse” without England.”

Its what we English speaker refer to as a Metaphor.

Angus McLellan
Angus McLellan
November 7, 2013 2:19 am

@Engineer Tom: “[Portsmouth] is the last surface vessel shipyard in England”

There are around 300 people working in Devon would have good reason to disagree with you.

El Sid
El Sid
November 7, 2013 7:13 am

@HL
A Merlin-capable flightdeck is just RN-speak for a medium flightdeck. It doesn’t mean these things will be used for ASW operations. Think about the missions of the Rivers – pottering around home waters doing fishery protection, inspecting freighters with illicit cargoes, that kind of thing. Then think how VTOL aircraft might help those missions. Some of it will end up chipping away at the holes left by the Nimrod withdrawal. Only at the edges mind, in no way is it a replacement for Nimrod but it all helps.

I’d imagine that most of the helicopters that land on these things will be operated by Bristow rather than the RN – SAR S-92 and occasionally their commercial oilfield S-92/Super Pumas doing medevac or emergency diverts. That kind of stuff becomes more important as the oil comes from more remote and dispersed fields West of Shetland rather than the relatively “busy” central North Sea where there’s lots of platforms and service vessels kicking about. An S-92 is almost the same weight as a Merlin, so designing for S-92-plus-a-bit-for-mid-life-weight-increases means that you can take a Merlin.

Rather than HM2, you can also imagine the odd visit by marinised Merlin HC3 for VBSS of dodgy freighters, although Wildcat would be more likely in that role. Looking further ahead, you can also imagine using it as an occasional lilypad for VTUAVs for EEZ surveillance – again reclaiming a bit of Nimrod’s role. And of course it means you have a nice big workdeck where you can plonk down an ISO container of goodies – @RT’s radar aerostat or whatever. You start getting into SIMSS/Black Swan territory at this point, but let’s not get too carried away – there’s still a lot of work needs doing just in the standard patrol task.

On Pompey, I think the last major warship (ie >90m) was HMS Andromeda commissioned in 1968, although they also built the ironically-named HMS Clyde commissioned in 2006.

Engineer Tom
Engineer Tom
November 7, 2013 7:19 am

@ AM

Yes currently there are other yards building carrier blocks, but as soon as that is finished all defence contracts for surface vessels will only go to the Clyde, for at least 20 years.

wf
wf
November 7, 2013 7:23 am

I understood Barrow *could* build surface ships, but had specialized in subs. Perhaps the better option is to close Portsmouth entirely and make Barrow the “other yard”?

Not a Boffin
Not a Boffin
November 7, 2013 8:01 am

I think Angus is referring to the Irish patrol vessels being built at Appledore, nothing to do with UK ToBA. Good business by Babcock Appledore.

Barrow built the two LPD (and the Waves), but their cost base is even higher than that alleged for Portsmouth. It’s also a very constrained place to launch ships (and deliver subs from!).

Engineer Tom
Engineer Tom
November 7, 2013 8:52 am

Barrow isn’t capable of doing any work apart from subs for the forseeable future, they are at full capacity.

And Appledore only have a year or two left on the OPV’s, then what.

The Other Chris
November 7, 2013 9:21 am

So, we’re likely looking at three BAE 90m OPV’s, similar to the Amazonas-class (formerly Port of Spain-class) delivered to Brazil (with license to build five more locally) and based on the River-class:

http://shipbuildingtribune.com/2013/04/05/uk-amazonas-class-opv-araguari-starts-sea-trials/

The Other Chris
November 7, 2013 9:28 am

Anyone know what the qualification process would be to rate Bristow’s S-92’s for deck landings would be?

Observer
Observer
November 7, 2013 9:30 am

Pure military shipyards. Never a good idea, especially when your Navy has hit its quota. They NEED the civilian sector to keep afloat in the lean times.

Fedaykin
November 7, 2013 10:16 am

Lets not forget that this doesn’t mean the total end of English ship building, as already pointed out Appledore continues and the oft forgotten Cammell Laird is going through a bit of a boom.

Actually Scottish independence would be to Cammell Lairds advantage, it is the only English shipyard left with facilities suitable to support the T26 build. 4, 5, 6 and 7 dock could all take a T26 and they have a Wet basin. Before anybody says that Camell Laird can’t do complex ship building I suggest they look at this picture and report:

http://www.clbh.co.uk/project-news/650

Major sections from Appledore and final assembly/build at Cammell Laird, not an impossibility. It would also be good news for H&W Belfast as Rosyth would be taken off the table in respect of QE class refit and dry dock time. The main dock in Belfast could easily fit a QEC with plenty of space to spare, so not all doom and gloom…

Fedaykin
November 7, 2013 10:35 am

@Observer

Going on my above comment what you are suggesting is exactly what Cammell Laird are, a mixed civilian and military contract yard with dock facilities and fabrication halls large enough to take on anything from oil industry work, ferry refits to construction of some new Frigates.

In the end the same thing comes up over and over again, we don’t like BAE Systems due to the general fowling up of projects and over spends yet don’t throw anything in the direction of suitable yards not owned by them. Going on my even earlier comment about an RFA Diligence or Argus replacement, push it in Camell Lairds direction. Give them the business so they can be a realistic rival to BAE Systems for military ship building.

Gloomy Northern Boy
Gloomy Northern Boy
November 7, 2013 11:13 am

On the question of the three Rivers currently in service, would they be fit for EEZ patrolling in the South Atlantic, or could they be made so? If so there is a small but friendly Government down that way who might well need to beef up their local capacity for that kind of work in a few years time and could be interested in doing some sort of deal.

If the need arises, they will have the money…

GNB

mickp
mickp
November 7, 2013 11:20 am

@The Other Chris – that’s no bad thing, they will be useful, proven ships, slightly enhanced compared to Clyde

It all then revolves around the numbers game and the spec. on the latter, nothing fancy, a decent surveillance fit, space for ISOs with some sort of ability to bolt on a simple missile box if they are ever needed for more than patrol. Armament something similar to Amazonas / Krabi – gun up front and a couple of extra guns on sides – we’ll probably get a 30mm and 2 20mm (which will be ok) – 3x 30mm or a 57mm and 2 30mm would be the most I’d go with. That covers the anti piracy stuff. Nice to have would be a hanger for a Lynx say but in EEZ waters probably don’t need. What about an option for a temporary sliding hanger to be fitted to those craft operating outside EEZ – some sort of bolt on kit that can be moved between ships?

On the numbers game, I think there is only one way this is heading – less T26s

Not a Boffin
Not a Boffin
November 7, 2013 12:07 pm

Cammell Laird are limited in what they can take on by their facilities and workforce. The QE units that they have built are primarily steel fabrications, with some pipework and some elements of fire protection / lagging etc, all with a good paint system. There is not much high density outfitting, electrical installation, cabling etc in those units. It is no different to what A&P Tyne (the old palmers yard) are doing and you could probably get H&W to do similar.

There is a world of difference between doing that and producing a complex warship, including machinery spaces and other heavily outfitted spaces and then testing and commissioning those systems to the relevant standards (Lloyds/DNV, Lloyds Naval, Defstan etc).

What is misisng in those yards (and in Appledore now btw) are the design, drafting, ops control and commissioning staff in sufficient numbers to make a complex warship build happen and that is among the biggest issues. You can’t just create them from scratch – years of experience (scars!) are required to get that sort of expertise. BAE Portsmouth got a lot of that from the transfer of VT staff from Southampton, Babcocks Rosyth got a lot from a bunch of ex-Swan Hunter guys (not the dutch take-over, but the real Swans). Once the Portsmouth building workforce has been gone for a couple of years, the only real centre will be on the Clyde. Where are Cammells (or A&P Tyne) going to get those people? They have largely left the industry and I can tell you from personal experience that once gone, they don’t come back.

There simply is not enough work to generate and then maintain a competitor to BAES and it certainly won’t arrive via any sort of Argus or Dili replacement programme – even if the money existed! The demise of Swan Hunter in the 90s and the decision to shaft VT on the T45 build (block build instead of whole ships) both demonstrated this and were the last chances to avoid what has happened now.

Chris
Chris
November 7, 2013 12:18 pm

NaB – ref “the decision to shaft VT on the T45 build” – would that be yet another fine decision by New Labour that favoured Scotland against the rest of the country?

Fedaykin
November 7, 2013 12:25 pm

@Not a Boffin

I guessed that would be the answer but here is my counter argument, Camell Laird is still best placed to be expanded/upgraded to take that kind of work on. If Scotland goes independent then there is no choice but to look at what the remaining English yards can take on. Lets start giving them at least some of the work to start bringing those skills in.

Academic really I suppose as I think Scotland will stay in the union but if they don’t and we are making it clear that we will not buy from a Scottish yard then something will have to be done to get the remaining English yards to step up to the plate.

Fat Bloke on Tour
Fat Bloke on Tour
November 7, 2013 12:26 pm

NAB @ 11.32

Some interesting comments.
So interesting that I actually agree with many of them.

One area where I have issues is that you say the T45’s are history because the powertrain is out of production.
Looks like we now have the tail wagging the dog and the design team have finally disappeared down the rabbit hole. Either that or they have a desire to make things difficult for themselves — painting the hall through the letterbox.

Normal commercial organisations would be able to re-engine the T45 at minimal cost.
Giant vampire squid in the form of British Waste of space would start from scratch and charge £132 mill to do it.

And only do half of it.

Couple of issues:

BWoS paid £303mill to buy out VT get access to Portsmouth.
Big bucks in anyone’s language and then they shut it down 4 years later.
How will BWoS’s shareholders view this huge waste of money — sack the CEO or give him a bonus.
Tycoon capitalism at its worst.

Finally regarding the Waves I fear you only tell half the story.
Barrow just aren’t up to surface ships, subs are probably beyond them as well.

Govan pulled them out of a hole.
They could have built the Mars 4.

Shameful that BWoS couldn’t be bothered to bid.
Real work is obviously too much trouble to their management.

As mentioned before interesting to see the size and cost of the “Guilty Conscience 3”.
If they come in tooled up the T26 numbers are going to be cut.

Fat Bloke on Tour
Fat Bloke on Tour
November 7, 2013 12:34 pm

NAB @ 12.07

That is the politics of despair.
How does anyone do anything?

BWoS can’t do shipbuilding — they are only interested in profits by stiffing a stupid / compliant customer.
They however can do blackmail and tycoon capitalism.

Govan should get into the Oil support boats.
Get an order for 4 boats and mug it up PDQ.

If the Clyde can’t do commercial and they can’t do then they have no future.
BWoS need to be taken out of the equation.

Fat Bloke on Tour
Fat Bloke on Tour
November 7, 2013 12:40 pm

Bliddy I-Pad.

The missing word is “exports”.

If the Clyde can’t do commercial and they can’t do exports then they have no future.

Brian Black
Brian Black
November 7, 2013 12:42 pm

I think one or two folks are fretting unnecessarily about Type 26 numbers.

Three new River variants aren’t going to gobble up any frigates. They’re not corvettes; the Navy will get HMS Clyde (x3) with a bit of extra leg room and an ipod dock.

Then, don’t forget, the big T26 decision comes next year. So the Navy will then have the 2015 defence review to object to funding all the OPVs, or even to funding the second carrier, if other tastier options were at stake.

Red Trousers
Red Trousers
November 7, 2013 1:00 pm

NAB,

taking all you say about shipyards as correct, it sounds like we’re all fairly buggered if Scotland do go their own way. England as we won’t have a yard to build a proper warship (which sounds like much higher end engineering than building a merchant ship), Scotland as they won’t have the economy to fund a Navy nor the ability to undercut Korean prices for commercial shipping.