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Shipyard work guaranteed into decade after next
THE government says it has been talking to BVT to guarantee the company work 'into the decade after next'.
Minister for defence equipment and support Quentin Davies said: 'We have a commitment to maintain a domestic capability in naval shipbuilding compatible with our needs. This commitment was formally set out in the Defence Industrial Strategy.
'Work in the shipyards is guaranteed for several years to come, as the new carriers are built.
'Thereafter we will be building the new class of surface warships, the Future Surface Combatant, which will replace the Type 22 and Type 23 frigates currently in service with the Royal Navy.
'We are discussing with BVT at the present time a Terms of Business Agreement which will guarantee a certain minimum level of work for the shipyards, going forward into the decade after next, against a commitment by BVT to achieve certain efficiency targets. This will provide a sound long-term basis for the future of naval shipbuilding.'
But shadow defence secretary Dr Liam Fox called for a review of Britain's defence needs.
He said: 'This leak about our shipyards highlights how much we need a comprehensive Strategic Defence Review to look at all the nation's defence needs and installations.
'We must decide what our strategic priorities are, and plan our shipbuilding programmes accordingly.
'This piecemeal, hand-to-mouth, day-to-day management gives no confidence to our armed forces, the defence industry or the citizens of this country whose security depends on good management.'
YOUR QUESTIONS ANSWERED
Q What is BVT?
A A huge shipbuilding company with operations in Portsmouth, Glasgow and Filton near Bristol, employing more than 7,000 people.
The company was formed as a joint venture in 2008 of Vosper Thornycroft, operating in Portsmouth since 1966, and BAe Systems.
BVT has signed a unique 15-year partnering agreement with the Ministry of Defence to provide the Royal Navy with new warships.
Q Which big Royal Navy projects is BVT working on at the moment?
A BVT won the contract to build large parts of the two new aircraft carriers, HMS Queen Elizabeth and HMS Prince of Wales.
It is also heavily involved in building the six new Type 45 anti-air warfare destroyers.
Q What role does Portsmouth shipyard have?
A Portsmouth is building large parts of the two carriers. On each ship, Portsmouth workers are building a section of the hull for stores and accommodation, the steering gear and two turrets – viewed as the ship's crowning glory.
On the Type 45s, Portsmouth workers constructed the bows.
The shipyard is also the centre for support and maintenance of the Royal Navy fleet.
Q Why, then, are people worried that Portsmouth shipbuilding is under threat?
A Firstly, a leaked memo from the MoD revealed the aircraft carriers project had overspent by 1.1bn.
At the same time, a report from the influential Commission on National Security think-tank suggested the carriers should be abandoned to plug a 9bn funding gap in the MoD's annual budget.
Lord Charles Guthrie of Craigiebank – the former chief of the defence staff who agreed to build the carriers – also added his voice to those questioning the value of the project.
Another leaked memo, this time from BVT Surface Fleet's chief executive, Alan Johnston, revealed that the MoD was willing to pay for thousands of redundancies to scale down Britain's warship building once the supercarriers are complete.
Q What would happen if the MoD did decide to cancel the aircraft carrier programme?
A A BVT spokesman suggested it would cost 10,000 jobs in the maritime industry and many more in the supply chain. Locally, more than 35,000 people are thought to depend on the defence industry for income.
Q How likely is it the carrier project will be axed?
A Not very. BVT is cutting the first steel for HMS Queen Elizabeth in Clyde on Tuesday, so many contracts relating to the project are already in place that the company says would cost the government millions of pounds to pull out of now.
Q What does the leaked BVT memo mean for the future of Portsmouth shipbuilding?
A The memo recognises the MoD will be scaling down the Royal Navy budget after the supercarriers are built – this is estimated to be done by 2014.
The MoD has admitted that there will be reduced demand for Royal Navy ships in the years to come.
The memo reveals the MoD would pay BVT between 115m to 165m for redundancies, site closure, environmental clean-up, equipment disposal and asset write-downs.
Q Does this mean jobs will go?
A Potentially, yes. However, Alan Johnston said the memo was referring to planning for a worst-case scenario and the BVT order book was jam-packed for the next seven to eight years with work worth 5bn.
BVT employs about 7,000 people. Its shipbuilding and ship design operations are spread across three shipyards and an office in Bristol.
Portsmouth shipyard:
BVT employs 3,000 people in Portsmouth.
The company is building large parts of the two 65,000-ton supercarriers.
n After they are built, the carriers will be based in Portsmouth where the company will support and maintain them.
Portsmouth workers are responsible for constructing the bows for the six new Type 45 destroyers.
The shipyard now runs the Type 45 Maritime Integration and Support Centre – a purpose-built test and trials facility for the Type 45s' complex combat systems.
Portsmouth is the centre for support and maintenance of the Royal Navy fleet and Portsmouth designers are currently developing the new Future Surface Combatants, a new class of ships designed to replace the Royal Navy's Type 23s.
BVT says the company's designers for export market and support skills in Portsmouth are a huge asset to attract business from foreign navies around the world.
Govan and Scotstoun shipyards, Clyde, Scotland:
The two yards on the Clyde are viewed as one operation by BVT, which employs 4,000 people to work at its new shipbuild and design facilities there.
The steel works in Govan are capable of building extremely large ships. The steel operation is one of the largest in Europe and is unique to the UK.
Large sections of the hull of the two new carriers, HMS Queen Elizabeth and HMS Prince of Wales, are to be built at Govan.
Scotstoun hosts some of the greatest design experts in the UK and has dry dock facilities where state-of-the-art ships are equipped with the latest technology and fittings.
Much of the technology on the navy's new Type 45 destroyers is fitted at Scotstoun.
The Scottish shipyards specialise in larger vessels.
Bristol – Management and design office employing 200 people.
The Aircraft Carrier Alliance and Type 45 Destroyer Programme Office are based in Filton, just outside Bristol.
The office is a mile away from Abbey Wood, the Ministry of Defence's centre for purchasing all the armed forces supplies, from toilet rolls to tanks.
The Bristol office liaises with the MoD, its main customer, on the progress and design of major projects like the two aircraft carriers and the Type 45 destroyer programme.
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