Ministers have tried to ‘bury critical report,’ claim GMB Union
The Government must act of the recommendations on its own review by backing the UK’s struggling shipbuilding industry, GMB the union for shipbuilding workers has said.
The Ministry of Defence has published the undated review by Sir John Parker, the former Chief Executive of shipbuilding firms Harland & Wolff and Babcock, on the night before Parliament is dissolved.
Parker had been commissioned to write a review of the Government’s National Shipbuilding Strategy.
The report is critical of the Government’s procurement policy. It concludes that the Government’s policy of putting all shipbuilding orders apart from frigates, destroyers and carriers out to international tender is not ‘the right strategic approach.’
The document goes on to say that ‘UK-only competition should be considered for future defence-funded vessels.’
The Appledore shipyard closed earlier this year due to a lack of work, and shipbuilding jobs have been placed under threat at other yards across the UK. The state-owned Spanish company Navantia was thought to be the front-runner in the £1.5 billion competition to build up to three Fleet Solid Support ships for the Royal Fleet Auxiliary.
Ross Murdoch, GMB National Officer, said:
“This report by the Government’s own adviser leaves no room for doubt – it was a catastrophic mistake to put a string of shipbuilding orders out to the global market. Our yards cannot compete against the unfair subsidies awarded by other nations while our competitors would not dream of letting the UK bid for their contracts. The Government must now back skilled UK workers and our steel industry by keeping the £1.5 billion Fleet Solid Support contract in the UK and reserving future awards for our own yards. Instead of trying to bury this critical report Ministers must listen to Sir John Parker and back our industry, instead of selling our future overseas.”
However, as of this week the £1.5bn competition to build up to three Fleet Solid Support Ships for the Royal Navy has been suspended. It is understood that Defence Secretary Ben Wallace halted the competitive tendering process because bidders were “not compliant” with cost.
Competing for the work was a British consortium consisting of companies Babcock, BAE Systems, Cammell Laird and Rolls-Royce (forming Team UK) and international bidders Fincantieri (Italy), Navantia (Spain), Japan Marine United Corporation, and Daewoo Shipbuilding and Marine Engineering (South Korea).
Fincantieri and Daewoo Shipbuilding and Marine Engineering had already withdrawn, according to the Financial Times. This left only Team UK, Navantia and Japan Marine United Corporation.
The Ministry of Defence said in a statement:
“It is clear that the current approach will not deliver the requirement. We are now considering the most appropriate way forward for the procurement project.”
It has also been reported that many regard the suspension as a first step to reclassifying the vessels to be exempt from EU laws aimed at preventing protectionism, allowing them to be built in the UK rather than overseas.
During a debate last year on UK sovereign capability, All-Party Parliamentary Group for Shipbuilding & Ship Repair Vice-Chair Paul Sweeney pointed out that despite claims to the contrary from some corners, the UK was well within its rights to protect the Fleet Solid Support Ships tendering process from international competition, something the National Shipbuilding Strategy did not address when published:
“In the context of major shipyard closures and significant downsizing, whether that is at Rosyth or Appledore, it is bizarre that the Government are quite happy to tender contracts overseas in international open competition. Under article 346 of the treaty on the functioning of the European Union, the Government could quite easily designate the industry as UK protected. It is entirely at their discretion. Any notion that their hands are tied is bogus. They could do that, smooth the production cycles and build a firm and stable footprint for UK shipyards, which would enable them to get match fit and then go out into the world and compete effectively for other orders. That is exactly what they do in Italy with Fincantieri, and what they do in France with DCNS. It is exactly what happens in Germany.
I do not understand why other European Union member states can achieve the same objectives much more effectively than us, but we are so holier than thou that it hurts when it comes to the zealous application of these EU rules and we seem to undermine our own industrial base and our prosperity as a result, meaning that communities are broken and skills are lost. Ultimately, we undermine our objective of building a more resilient and effective industrial base to serve our defence industry and, potentially, commercial spin-offs.”
With a general election set for the 12th of December, it is unlikely that the competition will be revived this year, as reported here.