Paul Sweeney, MP for Glasgow North East, discussed issues surrounding the National Shipbuilding Strategy during a debate on UK sovereign capability in Parliament.

Paul Sweeney is a Scottish Labour politician and has been the Member of Parliament for Glasgow North East since 2017. More importantly in this context, he was formerly employed by BAE in Glasgow. Paul has worked with the APPG for Shipbuilding which has begun an inquiry into the Government’s National Shipbuilding Strategy, taking evidence from a range of maritime security stakeholders and industry.

Sweeney stated that the strategy has been “used as cover to reduce the scope of ships that are qualified to built in the UK”. The MP said it reduced the types of ships that must be built in the UK to frigates, destroyers and aircraft carriers, saying that the NSS was “restricting the scope of orders that can go through UK shipyards”.

Paul pointed out that the previous Terms of Business Agreement had provisions for most Royal Navy and RFA vessel types to be UK built and added that the new strategy “falls short on how it’s going to deliver” industrial benefits due to lack of investment caused by a lack of certainty over future orders, driving up costs of the vessels that are actually ordered meaning of course, less are eventually ordered.

I messaged Paul earlier in the year to discuss the prospect of yards around the UK beginning steady and sustainable production of new vessels using future programmes as a basis.

“The greatest flaw to have plagued British naval shipbuilding since the 1980s is the issue of small batch classes of escort vessels, especially when subject to competitive tendering. Contrast that with the United States, which has been building the Arleigh Burke class since the 1980s.

In the UK small batch numbers and a lack of certainty over production locations have militated against efficiency curves from long production runs and created feast and famine dead weights on shipyards which bleed skills and knowledge.”

Referring to the current issues around the tendering of the Fleet Solid Support ships internationally, he said during the debate:

“We’re seeing the government happy to tender contracts overseas in international open competition which quite easily under the Treaty on the Functioning of the European Union (article 346) could be designated as UK protected builds. It’s entirely at their discretion to do that. Any notion that their hands are tied is bogus.”

What is Article 346?

EU law requires most government contracts to be procured via an open, competitive process. The main EU legislation in the defence domain is the Defence and Security Directive 2009/81/EC, transposed into UK law by Defence and Security Public Contracts Regulations 2011.13

However, Article 346 of the Treaty on the Functioning of the European Union (TFEU) provides for an exemption to the procurement rules where a country considers it to be necessary for national security reasons: “any Member State may take such measures as it considers necessary for the protection of the essential interests of its security which are connected with the production of or trade in arms, munitions and war material”. Article 346 refers to a list drawn up in 1958 by the Council of Ministers of products to which the provisions

The Government’s procurement plans for up to three new support ships for the Royal Fleet Auxiliary are facing opposition from defence analysts, Labour, the SNP trade unions and many others.

“This model should be further extended to maintaining big ship construction of vessels with a beam larger than 20m at Rosyth dockyard, by ensuring a continuous production run after the Queen Elizabeth class is complete by building the new Royal Fleet Auxiliary Fleet Solid Support ships and then the successor to the Albion class there”, Sweeney advised.

According to a briefing paper in the House of Commons library released earlier, the programme is currently in the Assessment Phase with the competition expected to be formally launched towards the end of 2018 and a contract signed in 2020. The MoD says the contract will be for two ships with an option for a third.

The briefing paper states:

“The Government intends to compete the contract internationally. Labour, the SNP and the shipbuilding trade unions argue the contract should be restricted to UK shipyards to support the shipbuilding industry, secure jobs and retain skills. They argue the proposed ships are ‘warships’ and as such, the Government can use the Article 346 exemption to exclude the contract from EU procurement rules on national security grounds.”

The TUC has also assessed the Article 346 exemption argument and argues the Government “has the sole right to determine” what its essential national security interests are. The TUC claims “other European nations have used the exemption to place orders for similar support ships with their own shipyards since the Directive was introduced.”

December this year will see the formal issue of documentation inviting bids for the design and build contract and in 2020, the contract for design and build is to be awarded.

Paul also explained that building the new Royal Fleet Auxiliary Fleet Solid Support ships and then the successor to the Albion class in Rosyth would be of huge benefit to UK shipbuilding and allow for at least four primary shipbuilding sites.

Towards the end of the debate Sweeney responded to remarks that only ‘complex warships’ should be built in the UK by pointing out that the construction of auxiliary vessels has allowed the UK to retain the skills to build complex warships and after citing the example of RFA Wave Ruler and more recently the five River class ships being built on the Clyde to sustain the workforce at the yard, he said:

“By utilising those less complex nut nonetheless complex warships, by smoothing that build cycle, we retain the skills, we maintain the infrastructure, we retain the critical mass to build to build the complex warships  which includes frigates, destroyers and aircraft carriers.

We have to look beyond that arbitrary restriction and maximise the purchasing power of the Ministry of Defence to deliver UK sovereign capability.”

This would also allow for industry that would become sustainable, ships to become cheaper and hopefully, the Royal Navy to afford more hulls.

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captain P Wash.

This “National Ship building Strategy” He speaks of is basically Scotland. Nothing left south of the Border now, Staggeringly !

DRS

Yes but at least he is making and argument we need to get rest of uk MPs to do their bit too and have 4/5 site where we can build ships and have an planned order book for a decade at least so that yards invest in infrastructure which will make them more competitive in the future. By all means allow foreign companies to build ships but they have to be done j the U.K. with investment in infrastructure to support that or rent infrastructure from existing builders.

captain P Wash.

But, We had 4 or 5 Sites up until a few Years ago, And the last one Capable of building Entire Warships, has just been Shut Down. Gone are the Days of Devonport, Chatham, Portsmouth and Newcastle. F26’s are purely Scottish, F31’s will be Bit Part English but probably Assembled on the Clyde.(That’s If the Government ever actually get their act together and order them. “At least 5 ” was the boast a couple of Years back, Oh Yeah, We’ll see about that.

Cam Hunter

The boast was because they are cutting the type26 to 8 hulls they will build 5 type 31s and probably more increasing RN hull numbers. We will 100% get 5 type 31s but they pretty much promised more than 5! But I can’t see that happening…

Austin l l

“Last one capable of building entire warships,has just been shut down ” ? Govan and Rosyth both are capable of building complete warships it was the UK Government that dictated that the type 45 s would be built in parts around the UK not the builders, it also added approximately a third to the overall cost again it was the government that thought little of this extra cost.

Ray

Type 31e won’t be assembled on the clyde they will either be built in Merseyside bae offering or in Rosyth babcock offering please do your research instead of this little englander rhetoric it’s about UK shipbuilding. With your argument your letting the govt, the party of Brexit off the hook for their anti UK manufacturing agenda how ironic.

Gunbuster

Devonport, Chatham, Portsmouth?
They have not built warships for 50 +years.

Albion

The last at Portsmouth – 1966 as I recall.

Dave L

Pompey built OPV’s / parts of the T45 and parts of the QNLZ until only recently. True the last proper frigate was HMS Andromeda a long time ago but it was not because they did not want to build them. We need more ships but will the MP’s North of the Border accept a larger defence budget – doubt it!!

captain P Wash.

Gunbuster, Exactly.

Darren

BS Portsmouth built full warships in the 2000s

The riddler

Get the rest of uk MPs to do their bit? They couldn’t give a shit and I say that with a heavy heart.

Steve Taylor

The government / MoD (N) / whoever gave us the T31 programme. And that tells you all you need to know about the official collective understanding of shipbuilding.

captain P Wash.

The T31 program Is either going to be a Ship of 4500 Tons with no Armaments whatsoever apart from a “Designed for” but “Not Built With” arrangement, Or a BAE Systems Version that’s a lot smaller that appears to be the Modern Equivalent of the “Antelope” class.( Sorry but That’s just my opinion and I know many of you will not agree but, Seriously, 250 Million per Hull ? )

Steve Taylor

Yes.

Los polos chickens

That’s total crap of course they will be armed even OPV have a gun , so peddling this nonsense from your armchair about a class of ship without ANY armaments is totall balls they will be armed main gun , basic air defence missiles , small calibre guns . Not as much as. They should be but weapons they will have

Roger Davies

I agree Paul Sweeney is only interested in Scotland, so where would it leave us if half way through a build Scotland became independent. Would they still be part of the UK and eligible to build Naval warships under Article 346 ? Unfortunately labour sold out Vosper Thornycroft to Bae Systems with their so called joint venture and eventual buy out so we only have Cammell Laird left as any Naval shipbuilding yard out side of Scotland. However having had 25 years in offshore fabrication and 18 years in Naval shipbuilding I know the offshore yards could easily have provided… Read more »

Steve

The national shipbuilding strategy is a non-starter and a waste of uk taxpayers money. We are no longer a country with one of the largest navies in the world, and we have to accept our new place in the world. Reality is there are two types of nations, the type that buy high end and the type that buy cheap. High end will self build and the UK just can’t compete when it comes to cheap. We need to stop wasting money trying to get exports and focus on what is good for our own armed forces, whether that is… Read more »

Glass Half Full

It doesn’t seem like you have read the NSS, or even the foreword to it? The following is directly from the foreword. “To achieve our ambitions we need a strong shipbuilding industry as part of a wider maritime sector. Today some 111,000 people are working in the maritime and marine sectors in the UK, including in the shipyards,2 supplying the parts, or supporting the equipment that keep this great industry alive, from Appledore to Rosyth and beyond. Sir John Parker’s 2016 report shows the Industry has not stood still. Indeed, there has been a renaissance in the sector fuelled by… Read more »

Frank62

“…we need a strong shipbuilding industry as part of a wider maritime sector.” That’s just wishful thinking if the navy is kept so small that it’s barely viable. If we were investing in building the fleet to a level where we can cover all existing commitments with a little spare capacity for inevitable attrition when conflict occurs & kept enough trained , skilled sailors to man it, then that platitude would hold water; the orders would be there to support an adequate naval shipbuilding industry. What we have is a shocking suffocation of naval shipbuilding cut down to the bone.… Read more »

Glass Half Full

You’re assuming a conflict with a Peer 1 adversary is going to provide time for attrition replacement? Seems highly optimistic to me. Hoping to have enough ship yards to avoid being taken out by missiles is totally impractical.

captain P Wash.

Glass half full, Appledore can be scratched off that list.

Darren

Why?

Glass Half Full

Because the lease is expiring and Babcock is shutting it. I left it in because it was in the original text of the NSS.

The problem with Appledore is that it doesn’t have any other business. Look at other shipyards around the UK and they do have other business and so are frankly better candidates for long term success based on a mix of commercial and naval business.

Darren

No. The problem with Appledore was Babcock. The problem with Appledore is that it does not have its own online identity to pursue other business as Babcock wanted this facility for its own reason and going for one OPV tender from a Country that enjoys eu empire funding was going to end in tears.

Glass Half full

The TLDR version? NSS is not just about building naval ships!

Steve

No it’s about propping up an unprofitable industry. The money is better spent on the future and building new industries that are self efficient and will bring value back to the UK.

We need to split defence decisions from policitcs of job creation in Scotland, and instead make them based on what is best for defending our conntries interests.

The 110k figure is a huge misleading one, how many of them are reliant on ship building, maritime and marine sector is very diverse.

Darren

How is it unprofitable?

Glass Half Full

As long as the UK mandates building war ships in the UK then it needs a viable ship building industry or it will be “propping up” to an ever increasing extent. TOBA will look cheap by comparison if it isn’t addressed.

You can make an argument that it would be better to generate wealth and jobs for the country in other commercial fields and then use the tax revenues from that to buy ships from other countries, but that’s a completely different discussion.

Darren

Yes! Sir John Parkers report did state that defence contracts with a decent profit should see decent investment in people and facilities, which is something we don’t see in the UK at the moment. How many yards modernised to Italy, Germany, France, Japan and South Korea standards and more with these lucrative warship contracts. No, as warship building does not promote efficient building or demand investment. Look at the Type 26’s being sloooooowed doooown.

Expat

Steve. You can’t separate and shouldn’t separate the economics and defense spending. Boeing is the company it is today because of the US investment in military aircraft which transferred into a commercial aviation. However there should not be blank cheque either defence companies should be demonstrating they are providing products efficiently improving productivity and hopefully able to win exports which brings money back into the UK boasts GDP and thus defence spending. If you get this right everyone wins.

Darren

What new industries are these? Ones that other Countries are involved in too.

Darren

We are entering the virtual digital shipyard era in which everything down to the last weld seam butt and fillet can be measured and given a cost along with benifit to the economy and money lost if given abroad etc. ONS and NAO should be on this

Stephen

If Germany, France, Italy etc. can manage to build ships and export ships, then so can we.

We will always have a Royal Navy, so we will always need shipbuilding facilities, it is very much in our interest that these facilities have a steady stream of work so it is worth their while to invest in new facilities and equipment so that British shipbuilding is efficient, cost effective and competitive.

And yes, we will get exports on the Type 31e, so no, it is not an “unprofitable” industry.

sjb1968

That place in the world would be as the 5th/6th largest economy, permanent member of the UN Security Council, Nuclear capable, recently secured significant success selling the design of the Type 26 abroad and having just completed the trials of the largest and most complex surface ship completed outside of the USA in the 21st century. In a country that heavily subsidises private housebuilding, farming to name just two and spends £13Bn on foreign aid the idea that a £100m a year could not go on supporting UK Yards to build support vessels is a total nonsense. It is more… Read more »

Glass Half Full

There seem to be two errors (or one that is repeated) in the first paragraph of content, namely NSS is “used as cover to reduce the scope of ships that are qualified to built in the UK” and “restricting the scope of orders that can go through UK shipyards”. The NSS is not restricting the scope. There is nothing preventing UK shipbuilders from tendering for FSS ships, the NSS just opens them up to international competition too. Sweeney goes onto to say “This model should be further extended to maintaining big ship construction of vessels with a beam larger than… Read more »

Steve Taylor

I have a question, what commercial ships would we building then?

Glass Half Full

Whatever makes commercial sense to the respective shipyards, or coalitions of shipyards. That probably seems a facetious answer but its not meant to be. Govt. shouldn’t dictate what gets built, or even whether anything gets built versus shipyards being say the center of excellence for refit work, offshore wind power work etc. As the NSS foreword points out, “Indeed, there has been a renaissance in the sector fuelled by a diversification into support, repair and wider marine engineering work.” Private companies did this by themselves. They are in the best position to decide what makes commercial sense for them. Sensibly… Read more »

Steve Taylor

I do wonder why there is no British Damen. CFP hasn’t helped. I would say the decline of the RN hasn’t helped either, obviously. Since WW2 successive governments have invested in the idea that we are land power and we couldn’t afford to defend Germany and have a navy. Even when our European neighbours sly subsidised their shipbuilding while we happily subsidised their defence. In peace an army has little utility unlike a navy. And in the nuclear age an industrial in war has little utility too, probably less. As soon as we had enough nukes we should have left… Read more »

Glass Half Full

There is a danger in assuming that a vibrant shipbuilding industry in support of UK defense purposes has to build big commercial ships, where clearly large subsidised foreign manufacturers provide the toughest competition. If we look across companies like Ferguson Marine, Harland & Wolff, Cammell Laird, A&P and Babcock we can see a range of marine related capabilities and projects. No two companies are the same in markets they choose to address. I see the greatest capability for these companies being adaptable, flexible with highly skilled value add workforces capable of constructing complex marine structures in response to changing market… Read more »

Stephen

France, Germany and Italy all build and export cruise ships, there is no reason we can’t do that either.

We have to stop waging war against our heavy industries and start rebuilding them with modern state of the art equipment, and start supporting them too.

Darren

But we do! South Koreans are quite expensive too.

Darren

“You should also consider that we don’t really have the geography to knock out 20k TEU ships as cheaply as the Koreans”., The South Koreans did not either until investment. There at the moment maybe certain ship type we don’t want to get involved in because of competition by subsidized countries like expensive South Koreans, but that means we should not be buying from them or any other rivals. it’s been said by the cruise ship firms/line that they would like to buy British if only we were in the game. If it is worthwhile is maybe one thing but… Read more »

Darren

So the NSS is really an INSS that does not compliment UK shipbuilding as it does not allow it to invest properly as Sir John Parker would like to see?

Darren

We are relying on international tendering, to be honest, and the UK MOD to be smart because going for South Korea for the Oil Tankers was hugely expensive but looked cheap on the face of it. This is new as RFA ships that were not built in the UK were taken up from trade, there was never a policy for tendering internationally and with modern technology the MOD can have a far better idea of prices and costs. The biggest most significant shipbuilding is in the FSSS in terms of tonnage. Why has it had to come under a new… Read more »

Glass Half Full

While on the topic of NSS I’d like to throw out a rationale for why I think the T31e is priced at £250M, beyond just providing a low cost GP frigate for the RN, because I suspect it is far more about being the basis for a sustainable naval shipbuilding program, which is critical to the NSS and why the program has taken the path it has up to this point. If it was only about costs for the UK then the possible $3.5B Chinook purchase amongst other big ticket purchases would suggest that £400M for a frigate would be… Read more »

Steve Taylor

T31 is priced as it is because HMG doesn’t have a clue and the modern RN leadership is too politicised.

T31 needs to work for us.

Expat

If we’re following the NSS then the type 31 should not be refitted but sold it’s to some extent disposable it’s competitive to build new rather than have expensive refits. This means it’s an open order book the first sold before refit is required and another ordered. Savings from not refitting and proceeds from the sale make significant contributions to the new ship.

The problem with his argument comes down to cash like most things. If we build UNREP ships in UK yards they will cost more. The defence budget is fixed therefore it will mean less money for something else within defence. If we want to build all ships in the UK someone in govt needs to come up with difference between the best price from our yards and the best price from overseas. Unless/until that happens the best we can do is mutually beneficial deals with the overseas yards. Eg R.O.K. operating Lynx/Wildcat and buying Rolls Royce marine engines.

Steve Taylor

Yes. But there is the churn factor to consider. If we build in the UK the money, sort of, stays in the UK. Whether that is simply in wages or maintaining skills and so on.

We have to be pragmatic. Building the Tides abroad made sense because of QEC. B

Stephen

There’s more to it than just the price as France, Germany, Italy, Spain, U.S.A., Canada, etc., etc., etc. realize, do you see them rushing to Korea? It would be cheaper after all, and that is the only thing that matters, right? Wrong. It keeps our people in well paid jobs, it keeps our industries alive, and it keeps the money in our country.

Stephen I don’t think you got my point about the budget. The defence budget like all is fixed in advance. If the price of A is higher than we either buy fewer A or fewer B. I’m not disputing your economic arguments I’m simply stating where we are right now.

Expat

Why do you think money stays in the country. Most people use their wages to buy foreign goods. And this is why having exports of t31 is so important to offset these imports. You don’t win exports by throwing blank cheques at industry. Having a competition focuses the company’s attention on becoming efficient and lean.

Darren

How do they cost more? Please tell me this! Do clarify and give detail on this assumption.

Steve Taylor

@ Glass Half Full

I would say the danger is assuming that we can be even more successful in the warship market than we are now.

And much the same can be said about commercial building. As I said we have no Damen.

Glass Half Full

Oh I don’t assume anything. A lot is riding on both the govt. and the ship yards being able to make this work. What encourages me is that despite all the odds we still have ship yards engaged and apparently successful in marine work per the comment from the NSS “… renaissance in the sector fuelled by a diversification into support, repair and wider marine engineering work”. It also seems to me that we shouldn’t get carried away in terms of the scope of what a successful UK ship building industry looks like. For example assume we never sell a… Read more »

Expat

Completely agree.

Stephen

We will always have a Royal Navy, so we will always need shipbuilding, so it is in our interests that British shipbuilding has a relatively steady stream of work otherwise it will never be worthwhile to invest in new facilities and equipment to make British shipbuilding as cost effective, efficient and competitive as possible. B.A.E.S. should still build the frigate factory at Scotstoun. Rosyth should keep the gantry crane and the solid support ships should be assembled there and other large Navy and R.F.A. ships in the future. Cammel Lairds should get the Type 31 and of course submarines in… Read more »

Glass Half Full

The problem with your allocation proposal is that you just entirely eliminated any competition by having dedicated resources for different classes of vessels. There is no incentive for ship builders to keep costs under control and reduce margins if they face no competition.

Fedaykin

“Contrast that with the United States, which has been building the Arleigh Burke class since the 1980s.” – There are advantages to just build the same ship for decades but there are also disadvantages. In means US shipbuilding is surprisingly behind the curve when it comes to modern shipbuilding practices. The Arleigh Burke class is a vessel designed in the 80’s using systems first developed in the 60’s and 70’s then built using thirty year old shipbuilding and fabrication techniques. The latest Flight II are cramped with habitability standards that are inferior to the latest UK ships. The Flight IIa… Read more »

captain P Wash.

They do tend to get the best use out of their equipment though , think B52 Bombers with the latest life extension planned up to 2050 or so. That’s nearly 100 years !

Elliott

The only reason Arleigh Burkes are cramped are because the USN refuses to cut crew size unless necessary. In addition the Flight IIa and III ships are much more automated than previous units. The only thing keeping their crew numbers up is once again reluctance to cut crew viewed as necessary during an emergency. As for habitability? Yes I have no doubt that NAVSEA required first and foremost that it be a warship, and wrote the living standards accordingly. The crews won’t thank you for making them comfortable if you didn’t put in enough magazine space to keep them alive.… Read more »

Pacman27

I think the UK does need a NSS and I think we do have a viable shipbuilding industry. This is important stuff for the whole country. We build x amounts of ships allied to x amount of boxers, Ajax and lets not forget the trains we are putting on our railways etc and we have a viable steel industry, have both and we have a viable service industry supporting all this which equals jobs, tax revenue and most important social benefits. If we get it right, we then may be able to export (and the UK exports quite a lot… Read more »

Darren

Yes.

Johnf

The majority of our MP’s only seem interested in their re election, their gold plated pension rights, their unchecked expense accounts and their inflation proof salary. Their interest in the defense of our country is minimal at best.

[…] many argue that the claim “they are not warships” is arbitrary, more on that […]