Recent claims from politicians that Scotland would be eligible to compete for Royal Navy warship contracts if the country left the UK have been rejected by the Ministry of Defence and Parliamentary Under-Secretary of State for Defence and Michael Fallon.
The Parliamentary Under-Secretary of State for Defence, recently confirmed this policy in response to a written parliamentary question:
“The National Shipbuilding Strategy (paragraph 92) was clear that for reasons of national security, the UK prioritises the need to retain the ability to design, build and integrate warships.”
According to the ‘National Shipbuilding Strategy’ document, there are three tenets regarding UK shipbuilding policy that impact on the build location of contracts:
- For reasons of national security, all Royal Navy warships (destroyers, frigates and aircraft carriers) will continue to have a UK-owned design, and, will be built and integrated in the UK. Warship build will be via competition between UK shipyards. But international partners will be encouraged to work with UK shipyards and other providers to produce the best possible commercial solution.
- All other naval ships should be subject to open competition (provided that there are no compelling national security reasons to constrain a particular procurement to national providers). Integration of sensitive UK-specific systems will be done in the UK, where possible after competition between UK providers.
- Defence will take account of wider factors (including the impact on UK prosperity) when making these procurement decisions.
Many politicians in Scotland had been criticised on social media for suggesting that Britain’s new Type 31e frigates would be built in Scotland if the campaign for independence was successful.
First Minister of Scotland Nicola Sturgeon had claimed at the time of the referendum that the only option for BAE on the event of independence was to continue to build the ships in Glasgow, this however was denied by a GMB convener at the Scotstoun yard in Glasgow:
“She was saying that the Clyde is the only game in town. I’m afraid it is not. There’s shipbuilders in Cammell Laird in Liverpool. You have got the A&P Group on the Tyne, who are shipbuilders, and you have got Barrow in Furness. So to say if Scotland goes independent we will still be building frigates… listen, I assure you that if we go for independence we will not be building. We have been told quite clearly by the UK government and I have been told quite clearly that will not happen.”
The issue of UK naval contracts on the Clyde had become controversial after the 2014 Independence Referendum and even more so recently when several groups indicated that the work would not go to an independent Scotland. Shipbuilding trade union leaders had previously told Ms Sturgeon to stop “using” them by claiming that British warships would continue to be built on the Clyde in the event of independence as they know that not to be the case.
Nicola Sturgeon had earlier insisted that it would be a “betrayal” to go back on its promise to build the frigate fleet on the Clyde. Sturgeon said:
“Promises were made about orders to these yards and promises were made about jobs at these yards, and I think it is absolutely vital now these contracts are delivered.
These yards have been through some really difficult times with a reduction in the workforce, and they thought that that was all part of the process of getting themselves into shape for the Type 26 and securing a level of employment here.
This is about jobs and securing jobs in an industry. It would be a complete betrayal of these yards if there was any U-turn or going back on on promises made.”
Doesn’t the UK build ships overseas anyway?
Many have misconstrued the building of a naval tanker in South Korea for the RFA as a break in this policy, that is not the case. Support vessels like this are eligible to be constructed outside the UK as only ‘complex warship’ construction (such as destroyers and frigates as outlined above) must stay within UK borders. Besides, no UK yard bid for the work.
Other than procurement activity undertaken during the World Wars, the UK has not had a complex warship built outside of the UK since the start of the 20th century at least. All of the Royal Navy’s new complex warships are being built in UK shipyards and the UK Government says it remains committed to utilising the strengths of UK industry in this specialist and complex area.
There is the matter that companies based in an independent Scottish state would no longer be eligible for contracts that the UK chose to place or compete domestically for national security reasons as this would be protected under Article 346 of the treaty on the functioning of the European Union which allows states to declare contracts related to defence or national security exempt from external tendering. Where they could continue to compete, they would be pitching for business in an international market dominated by major economic powers.
There’s also the matter of contracts using US technology, defence contractors that work with items or technology of US origin are also covered by undertakings given in accordance with the US International Traffic in Arms Regulations (ITAR), under which any change to an existing US export licence requires US State Department approval. An independent Scottish state would be a third-party country, not covered by existing UK-US ITAR agreements.
UK companies would not have authority to transfer items and information that is subject to ITAR licence to their subsidiaries or other companies in an independent Scottish state or to a Scottish national, without US approval, anymore than it could transfer such material to organisations or individuals in other foreign states. Every licence held by companies in Scotland working on ITAR-controlled items would have to be re-approved if Scotland became independent.
Isn’t Scotland the only location in the UK capable of building warships?
Claims at the time of the referendum that the only option for BAE on the event of independence was to continue to build the ships in Glasgow were refuted at the time by John Dolan, GMB convener at the Scotstoun yard in Glasgow:
“She was saying that the Clyde is the only game in town. I’m afraid it is not. There’s shipbuilders in Cammell Laird in Liverpool. You have got the A&P Group on the Tyne, who are shipbuilders, and you have got Barrow in Furness.
So to say if Scotland goes independent we will still be building Type 26 frigates… listen, I assure you that if we go for independence we will not be building.
We have been told quite clearly by the UK government and I have been told quite clearly that will not happen.”
Modern shipbuilding makes considerable use of prefabricated sections. Entire multi-deck segments of the hull may be built elsewhere around the UK, transported to the building dock or slipway, then lifted into place and assembled into one ship. This is known as block construction and is far more cost effective.
Yards pre-install equipment, pipes, electrical cables and any other components within the blocks, to minimise the effort needed to assemble or install components deep within the hull once it is welded together.
What about Scottish naval vessels?
Scotland would still need a navy right? Up to date facts on what an independent Scotland would operate at sea, let alone what it would build aren’t easy to come by. The SNP earlier proposed that under independence Scotland would:
“Take over existing naval, army and air force bases within Scotland and inherit a share of defence equipment in negotiation with the rest of the UK.”
Prior to the referendum, the SNP had planned to inherit two Type-23 frigates in addition to four mine counter-measures vessels, two offshore patrol vessels and four to six patrol boats from all from the Royal Navy’s current fleet. This leaves seemingly little needing built and any ships that would be constructed, would likely be a few Offshore Patrol Vessels similar to what’s being built on the Clyde today.
Given the already slow drumbeat of MoD orders are barely enough to sustain the yards as it is, this doesn’t bode well for the yards future if Scotland chooses to leave.
The only way for naval shipbuilding to continue to be viable on the Clyde after independence would be for the Scottish government to place a significant order totalling many billions of pounds for a large volume of vessels.