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Naval manoeuvres aim at long-range targets

Douglas Fraser | 17:22 UK time, Thursday, 2 July 2009

So the government will stand by the Clyde, by its shipyards, and by workers. That's reassuring.

After the revelation - revealed right here - that plans are being drawn up for the closure of at least one and possibly two Royal Navy shipyards, there's been quite a flurry of political and corporate activity.

BVT, the company that owns Govan and Scotstoun on the Clyde, as well as the yard at Portsmouth, has stressed there's lots of work to keep them going for the next five to seven years.

And the UK Government is not in the business of funding redundancies, according to Scotland Secretary Jim Murphy.

Indeed, he was standing right next to the Clyde and its shipyard workers today, after a meeting at Scotstoun yard, where he stressed the Government is a few weeks away from signing its Terms of Business Agreement (ToBA) with BVT.

That is designed to ensure work for the company for the next 15 years.

So what about the offer, made clear in a leaked document from BVT's chief executive, Alan Thompson, that the government will fund the cost of rationalising down to only one yard?

Jim Murphy says the government is not in the business of funding redundancies.

But his colleague, Quentin Davies, the defence procurement minister, said on the ´óÏó´«Ã½ News Channel yesterday that it is standard practice for the government to fund redundancies when contracts come to an end.

He said: "In all agreements we have with defence manufacturers, involving large, long-term construction projects, we do take on board responsibility for any redundancies at the end of the programme if there are any".

So the government is in that business.

But Mr Davies went on to the message of reassurance: "I'm not expecting any redundancies at the end of the carrier programme. I'm not expecting any redundancies at all."

So let's look again at the leaked documents.

It says that BVT has made a commitment to review its "industrial footprint in light of the projected reduction in UK shipbuilding requirements post completion of the CVF (aircraft carrier) programme".

The Clyde's role in that should be complete in 2014, and it then moves to Rosyth in Fife for the following two to three years.

Many of the Clydeside workers will probably be required to take their skills from the banks of the Clyde to the banks of the Forth.

"Current projections show that at that time the MoD requirements could be delivered from a single BVT facility," says Alan Johnston's memo. "And MoD has committed to underwrite the necessary closure costs".

And how does this next sentence fit with what Mr Murphy is now saying?

"One-off rationalisation/investment costs are estimated to be between £115-£165m for redundancies, site closure, environmental clean up, equipment disposal and asset write-downs, and MoD will underwrite the recovery of these costs under the ToBA."

It's spelled out even more clearly in an "in strict confidence" PowerPoint presentation by Dominic Carr, commercial director of BVT shipyards.

That bluntly states: "MoD will only pay equivalent of one shipbuild facility 24 months after last CVF block".

Under 'Cost Recovery', Mr Carr goes on: "MoD to underwrite rationalisation costs (c£115m-£165m) if options appraisal in 2010 recommends restructuring post-CVF".

There is one clarification we've had from Alan Thompson about the potential shape of rationalisation, and that is to say the two Clyde yards are seen by the company as one site.

That makes the closure threat a straight choice between the Clyde on one hand and Portsmouth on the other.

He also made it clear at Scotstoun today that exports are an essential part of his plans for retaining capacity in the industry.

What lies behind that is the certainty that the UK Government will not have enough work for all three yards (or two sites) to do.

There is nothing that either company or government have yet said that denies the threat to close at least one yard.

The leaked BVT memo makes clear the 15-year ToBA assumes a steady flow of work after the carriers are finished. It makes clear that shipyards will be busy for the next five years.

And for all that Mr Thompson has been saying the option of closing one yard is a "worse case" or "downside" scenario, there's no reference to that in his memo, and nor is it clear what the upside scenario would be.

There's hardly any mention of an exports strategy, though there have been in recent speeches the chief executive has made.

Rationalisation, on the other hand, holds out the attraction for BVT of savings, and lots of them, in the region of £350m to £500m.

If you're a BVT shareholder, that doesn't look like the worst case. If you're a shipyard worker on the Clyde or Portsmouth, it doesn't look at all reassuring.

Comments

  • Comment number 1.

    Douglas, the whoel thing with Jim Murphy was BVT was a pile of rubbish. It was a set up so that Jim Murphy could look like he and the UK Government were riding to the rescue.

    Surely you can see that?

  • Comment number 2.

    BVT are based on the south coast of england, in tory blue rinse constituencies. their partner operation is based near devonport.
    i am expecting one of two options; they are leaving because of the uncertainty of scotland becoming independent, so the snp's fault, or they have saved the jobs, so look what the union does for the workers of the west of scotland.
    the reality as the powerpoint shows is that there is work for only one site and if you have two associated business including the yard within 50 miles of head office, and another place 500 miles away and you had to choose on geographical location alone the choice is obvious.
    at a time when the tories will be in power, the MOD decision to support a scottish yard over a local one in tandem with BVT would be astonishing, and the tories would lose credibility in their own shires. they will not win these scottish seats EVER, it is a chouce between the snp and labour, so no real loss politically.
    and after linwood, ravenscraig and bathgate, the tories have shown they are not averse to keeping jobs in england and contributing directly or indirectly to shutting the scottish part of these industries down.
    i expect a lot of political posturing, and this MOD contract will be used for political gain, no doubt about it. this is the real world. based on proven facts.
    the announcement on what happens in clydeside on these carriers needs to be done a few weeks before the by election when it is called for maximum effect. so having spud murphy as the mouthpiece shows all and sundry that this is a decision made by wastemonster.
    strangely he and des (i used to be a part time cabinet minister)browne did not feel that jobs lost by a drinks company which pulled the rug from the workers without any political discussion with anyone fell under their domain. strange that. or not, when you consider the canvass that is being painted.

  • Comment number 3.

    Govan and Scotstoun are labour unionist icons along with trident they are used to threaten Scots regarding jobs. i worked in the yards labour will not shut them dowm well they are used in there war to frighten Scots to stay in the uk. but what worries me is the bbc are there willing partners in this. well real jobs where beening lost the bbc played there part in a game to make that corrupt london loving labour unionists look good well shame on you the bbc as alway show there colours

  • Comment number 4.

    1. MartinFromBothwell

    Very good point.

    Reminds one of the Yes Minister episode Jim Hacker saving the British Sausauge (much like this ship yard closure thing- it was an artifical debate dreamed up by ministers and civil servant lackys).

  • Comment number 5.

    It strikes me that the MoD ought to artificially maintain shipyards, even if there is too little comercial work for these shipyard firms.

    Why?

    Surely it is nationally essential to have the defensive capabilities to construct warships domestically. When it comes to issues of foreign policy and defence instrastructure matters; and if any clyde shipyard is allowed to close this means a perminant loss of these skills coupled with a reduction in our naval construction defensive infrastruture.

    This would be artifical. Surely we don't want to see the shipyards are merely 'private enterprises' at the risk of perminently undermining our defense infrastructure for the long term.

  • Comment number 6.

    #5 deanthetory

    If Scotland (my scenario) / UK (yours) needs defended, then why are you concentrating on building warships within the relevant country? That's so much more my generation than yours! The real threat is not invasion, but attacks upon the economic infrastructure. (Presumably you know about Russia's cyber attack on Estonia?)

    I'm playing devil's advocate here, but why is it more important to require warships to be built here - and not IT systems, energy provision etc etc?

    Do you see aircraft carriers playing a major role in defending the oil rigs? You say "defence", but do you really mean "attack" as part of playing a pretendy wee imperial power role?

  • Comment number 7.

    Warships are an essential aspect of either Scottish or British defense not least due to our geographical island status.

    But what I was attempting to outline is the fundamental importance for the UK (or Scotland if you wish) to maintain something reflective of a military-industrial complex; which creates an environment between government and industry and government and commerce which allows for national defense needs to also become a very considerable aspect of the economy.

    You mention the need to protect against cyber attacks (and estonia must be powerful motivation to do so)this is one particular aspect of our national defense needs. But conventional methods of protection are equally essential.
    We have deregulation to promote the kinds of new technology jobs required to innovate protective capabilities against cyber-attacks; and these commerical agents therefore recieve the helping hand from government (via deregulation, lower commercial tax rates and hopefully the odd government contract).

    This is also what must be done for our conventional naval requirements- they must be maintained and brought to fruit within our nation.
    This however requires a mixed policy approach as unlike the commercial side approach this is altogther more difficult. Thus to maintain conventional defense capabilities independent of other nations it is essential (that word again, but it is a good descriptive for this particular scenario) that clyde shipyards recieve long term government contracts, tax breaks as businesses and perhaps a real helping hand through semi-nationalisation.

  • Comment number 8.

    #7 deanthetory

    Such quaint antiquated thinking, dean!

    You do know that when Eisenhower coined the term "military-industrial complex", he was using it in pejorative terms?

    Such a complex is not there for "defence". It is designed to turn the taxes of ordinary people into power symbols for the leaders of the state.

    Unless you intend to fight aggressive wars single handed, or to stay out of defensive alliances and anticipate "fighting alone on the beaches", then it makes no sense for each little nation to have its own military procurement policy. When you think in Scottish terms, or European terms, that's obvious. The problem comes when you insist on thinking in UK terms.

    As with many aspects of government in the 21st century, the UK is not really fit for purpose. It's too big for the "wee" things and it's too wee for the "big" things.

    Defence is one of the "big" things. The USSR collapsed through excessive military expenditure (among other things). The EU is large enough to afford a military (not "defence") industry. The UK isn't.

    If you haven't seen it, have a look at

    You are young enough not to be trapped by the out of date thinking that is laughingly called "policy" on defence in all the UK parties.

  • Comment number 9.

    Oldnat your suggestion that "EU is large enough to afford a military" does carry some merit, not least in there perhaps being an EU neuclear deterent to replace the Franco-British independent versions.

    But your assessment that the UK is wee to do the big things, this oldnat is absolute nonsense. Our peacekeeping and reconstruction mission in Sierra Leon for example has been a total success; and I certainly wouldnt call it a "wee thing". It required the deployment of around 1000 soldiers to prevent a violent uprisings by militiamen from overthrowing the democratic government in the former British colony. I for one wouldnt call Operation Palliser a "wee thing" when a democratic government depended upon UK military assistance.

    Then there was our role in the Balkan conflicts. 600 UK soldiers as part of an EU peacekeeping operation in Kosovo. These conflicts for example arent "wee things" oldnat- and the UK and her independent military capacity is essential to see these operations are carried forward.

    This is unless you'd prefer the UK to abandon her military-industrial complex, abandon her ability to aid democratic government such as Sierra Leon, and sell her conventional defense capacities to other European nations as your posting seems to suggest we do.

    The UK can afford the big things, and as humanitiarians it is essential that we continue to do so (with a developed economy like ours, I'd suggest certain international responcibilities must go with it). The "wee things" which we equally do handle (the idea of the UK being too proud to carry out 'wee' operations abroad is nonsense). Look at our battalion from the Royal Gurkha Rifles in Brunei. You cant get smaller than one battalion! They carry out training to the Sultans army, and have been there since the Sultans first request for UK assistance went out during the 1962 revolt.

    Oldnat, you suggest that we can't/won't carry out "wee things" but even an elementary glance through history sees this allegation proven false.

    It is essential that we maintain the complex, not least for the ability to project UN sponsored peacekeeping forces abroad, after all oldnat with a high level of economic and social development that we enjoy surely we have a moral obligation to maintain the capacity to intervene abroad for humanitarian reasons?
    Lets not forget the enormous financial profits and employment the complex provides for the UK (and Scotland especially). I for one dont want to make the UK (and Scotland) poorer, with great levels of redundancies because of a notion that the UK cant use its military capacity abroad. (And as I've shown, it can, and does- even for the wee and big things oldnat).

  • Comment number 10.

    #9 deanthetory

    The "wee things / big things" tag applied to all functions of government - not to individual military actions.

    Defence I had already classified as one of the big things!

  • Comment number 11.

    Domestic defense is a big thing, and so is our important role internationally- to intervene against inhumanity oldnat.

    You still have to reply to my substantive point.

  • Comment number 12.

    I agree with the notion on here that this is yet again another attempt by the unionist westminster lackeys to frighten people away from daring to think about independence. Ian Davidson always harps on about warships on the clyde and the SNP being the cause of closure of the yards.
    So, in this case, if the unionists can't save the yards on the clyde from closure as opposed to Portsmouth, they blame us Scot's for having the nerve to want to think for ourselves. We caused the closure for wanting Independence.
    IF the yards on the Clyde are saved, ( I think they will be, but with a much reduced workforce ), Mr Davidson and Des Browne and Spud Murphy will be shouting from the top of the crans that they were right and we have to stay in the UK to protect jobs. It's a pity that these three unionists didn't ensure that more defence money was spent where it is needed most, on the front line in Afghanistan and Iraq, where lives could have been saved with the right equipment.

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