Government plans to procure up to three new support ships for the Royal Fleet Auxiliary are facing opposition from Labour, the SNP and trade unions.

According to a briefing paper in the House of Commons library, 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 Government disagrees, defining warships as ‘destroyers, frigates and aircraft carriers’, and says all other surface vessels should be subject to open competition.”

Two major unions, GMB and the Confederation of Shipbuilding and Engineering Unions (CSEU), have published reports outlining why they believe the ships should be classified as warships and why they should be competed domestically:

According to the briefing paper, the Unions’ arguments can be summarised as:

  • The FSS should be seen as warships. They are armed and take part in counter-piracy and counter-narcotic missions;
  • The Government’s commitment to revitalising domestic naval shipbuilding (as espoused in the National Shipbuilding Strategy) will only be achievable with a steady stream of orders;
  • Building the FSS in the UK will help protect the UK shipbuilding industry, protect jobs and retain skills: GMB estimates up to 6,500 jobs could be created or secured, including 1,805 shipyard jobs;
  • Rosyth shipyard will have a gap between the completion of HMS Prince of Wales (the second aircraft carrier) in 2019 and the expected refit of HMS Queen Elizabeth (the first aircraft carrier) in 2030, and FSS work could keep the shipyard operational in between these dates;
  • The UK will financially benefit from returns to the Treasury in the form of taxes and national insurance contributions and lower welfare payments: GMB estimates £285m of the estimated £1bn contract could be returned to taxpayers this way; CSEU estimates 20% of the contract cost could be returned to the Treasury;
  • The Government should factor in the revenue that could be returned to the Treasury when scoring bids between domestic suppliers and foreign competitors;
  • There isn’t a level playing field as, the CSEU argues, “many foreign yards are either state owned, or receive significant direct or indirect subsidy… UK yards do not benefit in this way and are therefore at an unfair disadvantage.”

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”.

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 briefing paper also states:

“While their primary purpose is to replenish Royal Navy vessels, the RFA also provides operational support including for counter-piracy and counter-terrorism missions. RFA vessels may embark Royal Marines and/or helicopters and work with allies (e.g. the US Navy in the Caribbean) on these operations. RFA Fort Victoria, for example, was involved in joint US/UK counter-narcotic operation in the Gulf which resulted in the seizure of £40m of heroin in March 2017, while a Sea King helicopter crew on RFA Fort Rosalie helped guide an Australian Frigate to a suspicious dhow carrying over £100m worth of drugs in the Indian Ocean earlier this year.”

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.

 

99 COMMENTS

  1. Should they not ask if any UK yard wants to build them in the first place before all this showboating?

    Remember that for the last batch of support ships there were exactly zero bids from UK yards.

      • BAE Systems/Babcocks have a very poor record on delivery dates, on build quality and also on budget requirements, look at the Type 45’s.

    • There were zero UK bids for the tankers because they knew they had no chance of beating a subsidized bid from South Korea.

      Putting together a bid costs time and money. Why do that when you know you can’t win.

    • Apart from the Italian and Cammell Laird bid you mean? Look, no UK yards directly bid, because they were pushed out of this project years before when the MOD/UK industry alliance was killed off, when UK politicians (against eu empire and probably their own wretched civil servants) lost the battle about these ships being warship like or military like, so they put this policy forward as if it was their own.

      • Plus. We do not know what deals was done to help other UK sectors (aerospace electronic creative, which should not need dodgy deals if they are that good) at the expense of the UK shipbuilding sector. Although hin the UK commercial private sector. We buy many Kia cars nowadays. How many Kia factories are over here? Especially for the higher valued models?

  2. Lets say that the government folds and these ships are reclassified as warships, what will that mean for the future of the RFA?

    • The EU regulations do not talk about “warships”. That is a total red herring. Another example of government turd polishing.

      The regs talk about equipment being purchased for military needs.

    • A rose by any other name is still a rose. A warship is built to military standards for survivability and with aggressive armament – as opposed to weapons of defence only. Government ships on government service have certain dispensations and when in harms way civilian crews are re#classified as essential reservists.

      • That’s not technically a definition of a warship. The mere presence of armament signifies a ship is intended to fight if necessary: it’s why RFA Argus cannot officially be classed as a hospital ship with diplomatic immunity.

  3. Three comments:
    1. The ‘Is It a Warship’ argument is a Non Sequitur. Pointless. All we need to do is delay the announcement until after March 2019 and we can tell the EU Procurement Rules to go and do one. It seems that ‘someone’ in Whitehall is forcing this to happen before that date to ensure it DOES go according to these rules.

    2. The Government must (and forgive me repeating myself) change from a ‘Price’ to a ‘Nett Cost to the UK’ evaluation. Quite simply on that basis, unless some foreign company can do something we can’t (like Lockheed Martin and the F-35) then no foreign shipyard would ever build another UK naval ship. Or rather a UK taxpayer funded ship.

    3. The foreign loving civil servants have changed the argument from assuming everything is UK built and asking what a foreign purchase can add to the automatic assumption that we will buy foreign and UK suppliers have to commit commercial suicide to win.

    I summary: This situation of presumptive imports is utterly scandalous and indeed corrupt use of UK taxpayer’s money. At the risk of sounding like our dear friend TH from the Taxpayer Alliance all UK taxpayer money MUST be spent here in the UK unless there are really exceptional circumstances. And those circumstances must be explained to Parliament for approval. And I include Foreign Aid in that statement

    • You are talking total tosh.

      There is a benefit to tax payers if the ships are at a certain price point. Above that then it is better to have them built abroad and the systems then fitted in the UK.

      Shipyards in the UK need to want to build these in the first place. They did not bid for the last lot of support ships so the Government had no choice but to have them built abroad anyway!

      These are not high tech ships and we do not need to have them built here at any cost. If they get bids that are reasonable then sure they should build them here even if those costs are a bit above foreign bids. However there is no pint in wasting time and money for no reason.

      • (Chris H) Lee1 – well thanks for rubbishing a thought out response with one word indicating you clearly do not have the latitude of thought to understand my point No 2. ‘Price’ is NOT the key evaluator here. It is what it costs the UK taxpayer – let me explain as you are finding it hard going:

        Tide Class tanker @ £110 Mn each (say) – Nett loss to the UK: £110 Mn.

        Tide Class tanker built here for £200 Mn each (say) – Nett loss to the UK: Cost of foreign made diesels.

        Can you not understand that if the ships are built here every penny is recycled back round the UK economy and Treasury and therefore of no nett loss?

        Can you not see that even if you count the labour cost in wages as the only ‘money recycled’ this gives direct Income Tax and NI revenues back and indirectly VAT revenue when employees spend those wages plus the benefits to the local economies which will then generate more tax revenue?

        Can you not see the tax revenue alone from Income Tax, NI, VAT, Corporation Tax, Business Rates etc will be less than the so called ‘extra cost’ of not buying abroad?

        So its ‘tosh’ to want taxpayer’s money spent in the UK for the benefit of the UK?

        • It is tosh to claim that they should be built here at any cost. There is a price point at which the overall cost to the taxpayer makes it worth building them here. However past that it is better to build these basic vessels elsewhere. These are not advanced ships. We do not need to build them here to keep skills. The high tech equipment in the ships will be installed in the UK like they were for the last set of Support ships.

          Merely shouting about having them built in the UK and accusing the Government of betrayal without understanding the problem is foolish.

          Also again there were no UK bids for the last support ships so are you going to force those yards to build them at gun point?

          • If it is “tosh” then why does every country in the world that can build it’s own support ships, do so???????

          • They don’t…

            The US does but it has huge resources and huge numbers of ship yards. However even the US has some ships in its navy that were not built in the US.

            Basically the ones that build their own have competitive ship builders and the capacity to do so. Currently most of our shipyards are at full pelt.

          • @stephen

            Most of our shipyards that can build large ships are. The Type 31e and Type 26 are going to be keeping them pretty busy.

          • If we don’t have the capacity to build then use the programs to build the capacity here. Offer (business department) grants to domestic or international companies to build the infrastructure to allow you to build these ships domestically. A lot of grants are available already, add to these. Else it is a death by a thousand cuts and next time there is a contract we will have to again build abroad with a net loss to the treasury and country. We need to build up the skills and capacity this is all a long term task. Need to stop short term thinking.

          • @DRS.

            What then happens after the ships are built? There will be a new disused shipyard sitting idle with hundreds of staff made redundant…

            Our workforce is struggling to compete with cheaper labour elsewhere. So the likelihood of large commercial ship builds is small. Once the other yards have finished building the frigates then we will have our capacity back so this new yard will then not be needed. Meanwhile we will have spent hundreds of millions building a totally useless shipyard…

        • Except the 200M comes out of the Defense Budget instead of the 110M. Good luck getting the treasury to increase the Defence Budget to cover subsidizing UK construction. And if we then insist on all UK taxpayer money being spend at home then we shouldn’t have any problem with other countries on doing the same. How much military and non military kit does the UK export to Korea for example? Or how about other services like financial services.

          Where do you stop with this. Insist that we now build our own iPhones because that way the money flows back into the UK economy?

          And then who are you going to complain to on this site when the UK built best in the world RFA is delivered late, way over budget with bolt heads glued on….

    • firstly would need to wait to December 2020 at earliest as it looks like we have agreed a transitional period after the official leave where we must follow the eu rules but have no say in them.

      Secondly we need the ships and the MOD have a limited budget. Using that budget to prop up the UK ship building is not sensible, unless we want further cuts.

      The question should be, can UK yards compete, once we have tkane into account UK tax being paid on the project and if not then the answer is simple abroad we go.

      • The fairly new National Shipbuilding Strategy says these support ships should be built in the UK.

        Spending tax payer money in the UK is eminently sensible. In particular, having a healthy UK shipbuilding sector is extremely advantageous to the Royal Navy.

    • Totally agree Chris, specially about the “Nett” cost. If it’s the same they should get built in the UK, and if it’s a bit more then some sort of cost benefit should be calculated for indeed keeping the skills and yards in the UK. A new philosophy, but also an old one.

    • Out of curiosity Chris, why don’t you just post under the name Chris H instead of putting (Chris H) at the start of each comment?

  4. Still should be international tender, I don’t mind paying 20% more but to know this an international competition is needed. Are the unions and SNP so worried that they can’t get close to an competitive bid.

    Once all the bids are in the comparison would need to take in account subsidies, exchange rates etc

    Any UK yard has to also consider that if its handed an overpriced order that it has not won competitively its effectively a subsidy which would count against it when going for international orders. So to keep the yard afloat UK has to place more overpriced orders, slippery slope…. and we just don’t have the defence budget.

    • Problem with that is that if there’s a competitive tender, the losers can sue if the winner is selected “illegally”. And that could be extortionately expensive in the end.

        • (Chris H) – Ron5 – Just one example of how these Eu regs. can be used: When Virgin lost their bid to retain the West Coast rail Franchise after First won thyey challenged the decision and showed the calculations had been incorrect. The Government had to not only declare the tender void they had to repay all costs to the two companies and re-design the Franchise process. Virgin still run West Coast years later. there are many examples in Europe – German railways are continually challenging German Government decisions and as they have deep pockets so new companies give up and avoid the legal costs. Its why ‘big business’ likes the EU way of doing things as it protects the biggest and the smallest lose out. Siemens challenged a decision on a contract to supply new trains here in the UK which cost Bombardier a fortune even though Siemens lost.

          A company cannot challenge a tender process if they are not involved and shortlisted so if none bid the MoD can do as they please with non EU companies. Its another reason a UK bid MUST be made if only to unearth the calculation process used by the MoD.

    • “Once all the bids are in the comparison would need to take in account subsidies, exchange rates etc”

      But that doesn’t happen does it?

      If the UK is so smart about buying abroad, why dooesn’t every other country with a shipbuilding capability follow suit? Maybe because it’s a stupid idea?

    • We don’t have the defence budget but we give £billions of our hard earned money away in “foreign aid” every single year? That is going to have to stop.

  5. We definitely want these built in the U.K. I believe the reason why no U.K. yard bid the last time is they were busy with the aircraft carrier work, we do not have that problem this time. These are large ships and there are 3 of them, it will really give British shipbuilding something to get our teeth into. These U.K. taxpayer funded ships should definitely be used to keep our own industries going, keep the money in our own country and keep our own people in well paid jobs. This is what other European countries do. All warships AND R.F.A. ships should be built in the U.K., we would be able to sustain a decent shipbuilding industry in this way and therefore there would also be investment to improve our shipyards.

    • Disagree, so UK yard can do it for 2 billion, a foreign yard for 1 billion. I’d rather have x more typhoons, some new hawks, 4 more type 31’s, 1 more type 26, Ocean replacement, better accomadation (the list could go on) for an extra billion. A UK worker will probably by a BMW, Bosch fridge, Samsung TV, holiday in Majorca. Its not like all the money stays in the UK.

      They should be built here but at a competitive price, if not then better spend the money else where. The problem is there no extra money to spend.

      • “Its not like all the money stays in the UK.”

        True but it would be interesting to know what the Treasury calculations are for how much does stay in the U.K. for instance in the hypothetical £2bn local vs £1bn overseas example that you mentioned. (Please tell me the Treasury has done such estimates!).

        I think you might be dismissing a bit too quickly those worker spends. Even if they are buying BMWs, Samsung TVs etc those items are still being bought from net (after income tax and NI deducted) income then 20% of the price paid goes straight to VAT and of the remainder there will still be some margin retained by the U.K. importers/retailers and potentially subject to CGT (admittedly that gets murky with some online resellers but less so with car dealerships, Curry’s PC World, John Lewis etc).

        • But you then take that further the VAT, CGT, Income tax funds wages for the public sector who then buy Samsung TVs, Bosch fridges etc…

          Best thing is the UK has a competitive ship building industry and sell ships overseas. Export ships workers buy foreign TVs the books balance or we’re in profit. That won’t happen if you subsidise UK ship building by accepting a overprice product.

          • The UK does not really have a competitive ship building industry. That was ruined by the Unions a long time ago. However it is certainly better than is was. We are now pretty good at building complex or luxury ships at a competitive price and at a high quality. However cheap off the shelf ships are still not our strong point.

        • @Ron, the number are just for an example. But why pay for an overpriced ship, we could build x number of better value t31s or x number of typhoons and still support UK jobs. Or give our lads( and ladies) better married quarters, again UK jobs supported.

          Build at any price just supports a industry that will eventually die. So have the competition if the UK yards are within x amount (net taxation or whatever else you want to measure) they win. Other wise the money is better spent else were.

  6. The UK defence budget should not be used to subsidize inefficient UK industry, unless there is a strategic national interest.

    The building of these support ships is not on the strategic national interest, so have an open competition to see to who can deliver the best ships at the best price.

    The South Korean tanker contract has proved a great success.

    • Good luck telling that to a UK shipyard workre that’s just been laid off because this work is going abroad.

      Good luck getting a quality QE refit after all the skilled workers that built her were laid off years earlier.

      • (Chris H) – Ron5 – I am mystified why people cannot see that taking a short term benefit with a ‘low price’ rather than a ‘Nett Cost’ at the loss of a long term capability is just not clever let alone sustainable

    • (Chris H) Mike Saul – I define the Strategic National Interest in retaining the skills, facilities, training and wealth creating jobs here in the UK and not exporting those key elements to South Korea to whom we owe nothing.

      I don’t care if you spend your personal income on a Kia or a BMW or whatever. Your choice. But when it comes to taxpayer’s money that should always (IMHO) be used here in the UK and nowhere else unless absolutely necessary. We should use Defence spending to support and create manufacturing skills and investment here and get double the benefit from taxation.Just throwing it away overseas gains us nothing at all in Strategic National Interest

    • Building these U.K. taxpayer funded ships in the U.K. is very much in the national interest, it will keep our people in well paid jobs, the money in our country and with a constant stream of work there will be investment in British shipyards to improve efficiency. Investment to improve efficiency will never happen if we keep giving ships to foreign countries.

      Other European countries do not do this, we are not either. We are sick to death of the government not supporting our industries, they see to take genuine delight in waging a deliberate war against them in fact. Every single opportunity to not support British heavy industry they take, in every single field. This attitude has to stop or we are going to have no heavy industry left, zero, we will have to go cap in hand to foreign countries for every single thing, which is an absolute humiliation for a major European country with a proud history of engineering like us.

      With the experience and facilities gained from building these large ships we will be able to start bidding for cruise ships like other European countries do, and far from costing us money we will actually make money.

      Other major European countries make their own support ships, have large commercial shipbuilding industries and better shipbuilding facilities than us. We are also a major European country, a major European country who is also an island, if anything we should be building more ships than them, have even better facilities etc. We want our shipbuilding supported and invested in like other European countries do, not waged war against.

    • Those Mars tankers havent yet been a success,there are still problems with them.
      You tell me in twenty years weather we have got our money’s worth out of them. The steel they were made with was poor in comparison to British steel.

  7. I like to avoid politics when it comes to defence, but politics is at the heart of this. You have Labour, the SNP and unions protecting “state spending”, and the Conservatives going for privatisation in its various forms.

    Ultimately whatever the result of the conflict, it should be important that defence don’t suffer.

    • Not really. Independent of politics, which serves the UK better? Building these ships in South Korea or building them in the UK?

      If you ask someone from the US, France, Italy, China or Russia, the answer is very easy to predict. Asking it on this forum gets a lot of Putinbot responses. Putin would be so happy if the UK ‘s shipbuilding capability dwindled.

      • Putin would love for the UK to build less Type 26 or Type 31 because we blew the money on overpriced support ships….

        • (Chris H) – expat – please justify that comment? How can employing British workers, supporting British companies and recycling British taxpayers money back around the economy and therefore back to the Treasury, even if the price is higher, be in any way ‘blowing money’.

          And given that money will get back to the UK Treasury rather than the South Korean Government (say) surely they will then have more money to recycle back to buying T26 and T31 ships?

          As the old saying has it “What goes around comes around”

          • Chris read my other comment in this article.
            I’m actually not against paying more if the industry can prove it will become more completive by winning the contract and win more orders, but I’m against subsidising inefficient industries where we have the risk of creating a workforce and management that believe its there right to get these orders. Recycling money is not actually what happens, the UK lives in debt and we import more than we export so money eventually bleeds out the country. What you in fact end up doing is taking money from efficient profitable companies and give it to inefficient industries some gets recycled but some is spent on foreign goods, some gets recycled again goes back into the economy but again a % goes on foreign goods , the wheel turns and money bleeds away. As the old saying goes ‘Throwing good after bad” should not be an option.

            So the surely the way forward is an competitive shipbuilding industry that wins international orders and improves the UKs trade balance. Increase tax taking and therefore the defence budget.

      • I have to agree Ron, I sense some people on this forum have a vested interest in trying to talk us into buying foreign at every opportunity. I see the same names pushing these suspicious comments, which go directly against the grain of what the majority of British people want, over and over again.

  8. anyone like to answer this question? When we pay more for the support ships to be built in the UK what would you like to cancel to pay the difference?

  9. I was all for building these abroad for the best price, but having digested the counter argument, I can see strong valid reasons for a UK build.

    Here’s the problem …. The government of the day ( all political colours) just don’t see that sort of logic, bid goes to the cheapest bidder, end of.

    After all, they will all be long out of power and happily making a fortune on the after dinner speech circuit and
    quite frankly, they won’t give a toss that there’s no large UK contractor left to refit the QE class!

    • This decades long deliberate war against British heavy industry has to end. We need a complete change of attitude from the government so that British heavy industry is supported and invested in like other European countries do.

  10. I think the point is that determining how much of a spend on ships (in this example) comes back to the treasury. Most contracts do not operate in isolation ie the yard would be doing something before it took on this particular contract and will start another before the one we are talking about completes. How much of each contract pays for the senior management overhead, how much for the loan payments that was for the cranes that the yard previously installed. Only when you know where the money goes can you see how much goes back to the treasury. It is going to be different for each yard on each different bid.
    Also it takes time for the money to flow through the system, you have to ask who pays the difference between the price and the actual cost. Do you give the MOD a refund 2 years later when the treasury has collected all the tax receipts?
    Defence and Industry have a symbiotic relationship. When one tries to take advantage of the other then both suffer in the long run (Batch 2 Rivers anyone). It is worth paying a premium for defence equipment to be build in the UK, what that premium should be set at, I don’t know.

    • Don’t forget cost avoidance. If the ships are ordered abroad, UK shipyard workers are laid off and go on social security. SS payments are made by the government.

  11. “The goal of the National Shipbuilding Strategy (“this Strategy”) was set out in 2015: to lay the foundations for a modern and efficient sector capable of meeting the country’s future defence and security needs.”

    The above was taken from the Executive Summary bullet 4 at the start of the NSS report. It also says immediately prior in bullet 3:

    “Getting this right will result in a transformation of the way that the Ministry of Defence procures naval ships, and will also re-energise the UK’s Shipbuilding Industry, making it efficient and effective in delivering the naval ships our nation needs. Achieving this will increase UK global influence through maritime power and reach and have significant benefits throughout the UK in terms of increased jobs, skills, exports and wider prosperity – all of which are at the heart of this Strategy.”

    First and foremost the NSS is MoD/Defence driven initiative. It wasn’t a trade development initiative from the word salad of department names that used to be the DTI and it wasn’t a job creation project from DWP. It highlights efficiency in those two quotes as a driver for an effective competitive industry that can stand on its own in the commercial world without subsidy or favour; so that a competitive, efficient industry exists for warships the UK deems strategic and which must be built in the UK. A number of shipyards around the UK already have or are in the process of establishing areas where they can be competitive and profitable, engaged in ship building, refits, wind farm business, oil and gas servicing etc. the goal of the NSS is to reinforce and build on that that without subsidy or guarantee beyond commitment to warship production.

    It seems a number of companies have been able to form consortia that believe they can build T31 for $250M, i.e a world competitive price point for a frigate and make money doing it. If the FSSS makes commercial sense to a single builder or to a consortia of builders then they will tender a competitive bid. If not then they won’t. Guaranteeing work especially to any specific site or sites undermines the NSS … unless one believes that the OPV Batch 2 BAES contract is the way we should support shipbuilding.

    • “First and foremost the NSS is MoD/Defence driven initiative”

      Incorrect, the NSS was initiated ad owned by the Treasury.

      Also what does competitive bid mean? If a foreign bid is subsidized by the foreign government, does the UK shipyard have to beat that bid?

      • “The National Shipbuilding Strategy is intended to be a radical, fundamental re-appraisal of how we undertake the shipbuilding enterprise in the UK, intending to place UK naval shipbuilding on a sustainable long term footing.” from here https://www.gov.uk/government/publications/uk-national-shipbuilding-strategy-an-independent-report

        Every document I see is coming from MoD. Even if the Treasury initiated it, the strategy is not driven primarily by the desire to create a commercial shipbuilding industry, but to create a shipbuilding industry that can competitively build naval ships “on a sustainable long term footing” as the quote above states.

        Competitive bid doesn’t mean it has to be the lowest as has been illustrated in many prior comments. However, to address the underlying issue. Say the UK shipbuilders do get these ships, what happens after they are built? The ship yards will need to win additional commercial business since there aren’t enough RN and RFA vessels required to keep the ship yards fully employed. But the ship yards will only win additional commercial business if they can compete against foreign ship yards, so UK yards do have to compete against subsidized foreign yards on an ongoing basis or find a niche that side steps that such as the refit work, offshore wind turbine work etc.

        • So there 2 schools of thought here.

          1) Align with Sir John Parker (the former Harland and Wolf apprentice) to build a competitive world beating ship building industry that will profit the nation for decades to come.

          2) Industry should not have to be benchmarked against international peers and its government (UK taxpayer via MoD) job to prop up the industry now and in the future.

          • I think there’s also a 1b) answer too from the NSS which is that in addition to commercial shipbuilding the UK should try to create a value added enterprise with the export of defence ships, hence the Type31e. Either of the Type 31e proposals is likely to be complicated and large enough to be a challenge for smaller countries to take on the domestic manufacture but low enough cost to be affordable and highly scale-able to more advanced capabilities over time, especially the Arrowhead 140. The £250M target seems to have been as much about a low cost platform capable of being exported as it is about a low cost platform for UK GP frigate use.

            Exporting something like Type 26 with a UK build is a tough proposition because most countries that could afford/justify Type 26 advanced ASW capabilities will also want domestic build like Australia and perhaps Canada. One possible exception might be NZ. Two Type 26 would be a real stretch for their economy but would have them punching well above their weight with real value add in their relationship with the US and Australia, which pays back with support for NZ interests. One interesting aside on that is that the Type 26 is likely a far quieter vessel for ASW work than anything the US has now or is likely to have, but I digress.

        • ‘Not enough RN or RFA vessels required …’

          The shipbuilding strategy highlights that there is a healthy market for second hand RN (and RFA?) vessels and recommends selling at half life to other navies who want high quality but low cost. End the need for ever more life extension work and replace the exported vessel with new build – thus setting up the oft mentioned ‘steady drumbeat’ of ongoing work.

          • Not sure we know this? “… that there is a healthy market for second hand RN (and RFA?) vessels.” We know there is a market as shown by Brazil and Chile for a few vessels but is there a large enough market if the UK starts cycling through its whole fleet (ex carriers) at 15-20 year lifetimes? And what happens if other top tier navies do likewise and so saturate the used market? One caveat is that navies such as Canada and NZ who normally buy new, might find 15 year old, still extremely capable vessels, much more attractive than having to go down the path of expensive brand new vessels although who then pays for the refit at that stage.

            That said it is definitely part of the strategy to increase the cadence of build activity by reducing vessel life in service, starting with the Type 31e where life will be defined at Main Gate. Whether later governments stick to it may be another matter.

            Of course the major advantage of making a success of the re-sell of 15-20 year vessels is that every ship is guaranteed to be UK built, whereas even T31e new export sales may result in foreign licensed builds in some countries.

  12. This has to do with eu regs but other Countries get around it like Germany with their Berlins and this: https://www.naval-technology.com/news/italian-navys-logistic-support-ship-vulcano-completes-launch/. UK governments had arguments about this during Labour years with eu, but lost in whether they were military warshiplike and combatants etc, even though they go into the frontline and logistics must be a sovereign capability too. So made decisions to build abroad to abide by eu regs, nothing else. Other Countries do not as we can see, or use the unfair: “we have military crewing these ships” rubbish, or plainly, do not abide or see any advantage in there being any value for the taxpayer, which there is not in building abroad. When are we going to get a grip of this? In most, we always built RFA ships here in the UK. Where is the argument for building abroad? let’s see the figures after all tax clawback from workers all UK firms be it main shipyards and suppliers, investment in people, facilities and injection of money to awaken areas that have so much potential in the UK, is taken into consideration and account. There is no argument for building abroad. By the way. The Italians just like the Germans will say that there is no value for their respective taxpayers in building these ships abroad. Italy is on its knees, yet still realises building abroad gives no savings. So they do not abide by eu rules.

    • This is clearly incorrect. EU rules require that any firm in the EU must have equal access to every member state. The RFA were built in South korea which is outside the EU and so not impacted by the rules. The decision was made for a combination of cost and capacity, and speed of build, and not a lot else. I am unaware of any RFA ship that was built in the EU27

      • (Chris H) Steve – Firstly until March 2019 it is ‘the EU28’.
        But on the more substantive point I am sorry but if a contract is declared to comply with EU Procurement rules regarding Governmental sourcing (over a certain value) then they must comply with those EU Rules and the options must be published in the OJEU.

        The fact a Korean firm bids is neither here nor there. The source of the contract is within the EU. If a Korean firm bids against say a Japanese firm and it loses it can challenge the UK Government about the methodology of selecting the winner and can, quite possibly, overturn the decision. Who decides this? The European Court of Justice. No not even our own courts decide.

        This is the utter madness of the EU regulatory treacle in which we are embedded and from which we are having such difficulty extracting ourselves.

        Better of course to just build the ships here as military ships which they are of course.

          • @Ron.

            It is not misleading. If a UK yard does not want to bid for the work then the Government can not award the contract to UK yard! What exactly is misleading about that?

      • Not incorrect what so ever. But, exactly. It helped UK governments say this and giving the contract to South Korea was a get out or got away with it as Luff said. Come on, get with it! 452 million (not the total 600 million+) for just the shipbuild bit to make it look less and a get out in not having to blame eu regs. Give me strength! Why did the UK gov not vote for sanctions for steel to do with China, with eu? They voted against this because if they had voted for, they would have still been outvoted. See how these people operate for heaven’s sake.

  13. (Chris H) I recall having quite a heated argument over dinner with some Germans and Dutch people (who worked for the same company as me) during the time dear old Maggie was proving ‘difficult’ for the EC (as was) over Maastricht. They asked me why she was like it and I explained that a) we like to agree all the rules so then b) everyone can play by them.

    Their response?

    “That is crazy! Do what we all do! Agree everything and then ignore everything…”

  14. The RFA took nearly Twenty years to get the new oilers in service, The Army Navy and Air force got involved….
    Reality check, UK need new RFA Fort type vessels, though present limited Manning, low Cadet recruitments needs to be resolved.
    Thus new vessels designed as such to be full Merchant Rules (not pro armed) and be stationed as per how these vessels are supposed to operate and Not as suedo naval vessels.
    Then a realistic vessel can evolve and be more cost effective being easy to operate, lower manning levels and reduced capital cost. UK build it raises our Union Flag!!
    Kind Regards….

  15. I run a small engineering company I’m happy to build your next car, it will be 100% UK built and similar specs to any foreign brand. Price well its not going to be as cheap but that’s not import, the money will go back into the UK economy and you’ll keep me employed as well as few others for few years.

    Having read the comments on here I’m convince this is a sound business model I can’t possibly loose I should be swamped with orders.

    • Irrelevant.
      You are comparing Private to Public Taxpayer funded in which there is a huge claw back. Does it make sense to pay BAE X amount of pounds with no question, then they go to their mates Dent to buy some steel from abroad (using the excuse of special thin steel needed) because they get a deal and may get some tax back themselves in various forms, but ignore the UK taxpayer clawback from a fair UK supplier and loss to future investment and competitiveness? Open your eyes to this! A UK car nearly 100% UK sourced is better than A UK car only 30% sourced? Well, many of the foreign components seem to be poor (Vauxhall Astra Estate when everything that failed were components from abroad) Work it out. You would be surprised at the price too as we are not 50% or 100% more expensive than anywhere abroad. But going back to the 100% UK content. If design electronics and other none pure shipbuilding bits can be cheaper than here, should we go that way? That fact is, we have no chance of getting competitive in shipbuilding with this model you wish for, in which the more expensive Germans, Italians and Netherlands do not abide by.

      • I’m playing devil advocate.

        ‘Does it make sense to pay BAE X amount of pounds with no question’ absolutely not.

        ‘That fact is, we have no chance of getting competitive in shipbuilding with this model you wish for’
        ‘You would be surprised at the price too as we are not 50% or 100% more expensive’

        So how do you measure a competitively built ship? The only way is a competition then factor in any uncompetitive parts of a foreign tender. UK can always withdraw the tender then go single source. There are foreign yards out there that are not subsidised our industry should be benchmarked against them and the understanding should be should the order be placed they need to reach that benchmark on ship number 3.

        • Sorry. Bad comparison in the previous reply. Look at it this way. You are the paymaster general, (the UK taxpayer and UK government) in which you buying something and get 40-50% back in tax clawback revenue, so they cannot compete and that’s to our advantage as other nations see it too. But you say, you better make sure you invest in modern facilities so we are up to snuff and better than the foreign competition.

          This is the only way we will get competitive in shipbuilding when our own independent from eu, UK government believe in the UK shipbuilding sector and make sure it invests.

          Are the Germans more competitive? The Italians? No. The Netherlands? No! No. the model I wish to see is the one the Sir John Paker wants, that is Shipyards to invest from these taxpayer-funded contracts. You cannot compete against a foreign subsidised yard! There are some foreign yards that are not subsidised, so we will get a true price and it will not be value for the UK taxpayer! Bring it on! We should be winning foreign ship contracts otherwise but we don’t.

          Building the 3 Fleet Solid Support Ships in the Country they should be built in, the UK, is a no-brainer. There are no figures to support otherwise.

          • When I say bring it one. We need to see wha tthese forien firms can actually do. But the listed Foreign firms trying to poach these UK contacts are dubious ones. No German firm should be able to to compete with us, as with an eu Country, for starters. South Korea and Japan, not much difference in hourly pay rates. In fact, Japan is higher.

        • I should also mention. You are maybe not aware of the huge new technologies in digital that can benefit the UK. OK, others can do the same, but if the UK leads or at least is up with the others, it does close the gap. Energy is not fair as this was caused by Government and needs to be taken in to account like all other civil servant and government damaging policies. Biu tif you support his, you support decline, and nothing else. The UK shipbuilding sector will not grow with going for the suppose lowest foreign bidder model, which is not value for the UK taxpayer. People are getting wise to this now.

  16. You really have to go over history from when this MARS project was first mentioned, go through the UK yards interested in wanting to build these ships in a MoD partnerships, the UK government being subservient to eu and Uk industry killing regs which the then Lab gov did not have a problem with and carried on with the Con part of this establishment party. Then the UK gov manipulation of this project and eu regs and involvement with this along with the ambitious for themselves, individuals in the public and private sector who had no interest in a growth on viable UK shipbuilding and what these ship contracts could achieve. This is a shameful story from all including this liblabconsnpplaid party.

  17. Lee this is not true…
    Lee1 July 10, 2018 at 08:48
    The UK does not really have a competitive ship building industry. That was ruined by the Unions a long time ago.
    ——————————————————————————————-
    What was left of the ship building industry in the 1980’s was actually very efficient and the unions had been a big part of enabling that. What killed off the large commercial ship building capacity was a deal by the Thatcher government and Europe to protect the city.

    Your next assertion is true if we are prepared to support it. There is nothing cheap and off the shelf about an RFA, and even if it cost nominally more I would rather my taxpayer money went to a British shipyard.

    Lee1 July 10, 2018 at 08:48
    …However it is certainly better than is was. We are now pretty good at building complex or luxury ships at a competitive price and at a high quality. However cheap off the shelf ships are still not our strong point.

    • Yes. But sadly, the most efficient were Pallion, Laings and Austin and Pickersgill so sadly demolished only after a few years of use.

  18. It should be a no brainer that we should build the ships in the UK. Its not only in the interest of the ‘British work force but it help us to maintain the skills in terms of ship building, as once lost it takes years if at all to get it back. Looking forward after we leave the EU we must have the capability to look after ourselves as clearly under Donald Trump we might not be always able to rely on the USA.
    Lets start to put Britain First!

  19. Some interesting arguments on why they should or should not be built in the UK, the tax returns to the treasury is very understandable and in many ways I agree that tax payers monies should where possible be spent in the UK and in UK companies.
    As mentioned there is difficulties with the ship building capacity at the moment and to build two possibly three of these 40,000 ton vessels and in the near future the Albion/Bulwark replacements could push our limited capacity over the edge.
    Could some of the older docks such as Belfast be reactivated, again that would cost money and as argued would they have enough new construction to keep them at capacity.
    On the last point I could argue yes, the UK not only needs ships for the RN/RFA but it does need what I would call government ships, ships that are British flagged to be available to the RN/RFA in times of need. Possibly three hospital ships even Spain has two of these types of vessels. Ro/RO vessels, container vessels, maintenance and repair vessels possibly even an R&R liner for troops in combat areas all with a higher speed more to RFA norms of 25 knots. They can be employed on government critical transports such as oil reserves, that way they generate an income. At the same time they can work as normal cargo/ oil tankers generating more income whilst being used as training ships.
    The vessels are not paid for by the government but are giving low or 0 % government credit to be built in the in the UK and used by the government when needed.
    Yes I know that I have not worked out all the details and that this is a general idea, but as far as I am aware we used to do something like this, the Americans do and I think some other nations do even now. So why can’t we. To build such a supporting unit with the amount of ships needed would take a minimum of 20 years using two dry docks/slip ways. We could always call it the Union Jack Line.
    Or ask yourselves a simple question do we the UK have enough British owned British flagged vessels to launch an expeditionary force to carry out the task that we had to do in 1982. The answer is No. I am not asking about RN numbers just from the logistic side.

  20. After the daft decision in building the tankers abroad when academics had shown the positives of building them here was totally ignored. These three Fleet Solid Support Ships will be built here in the UK and follow with a new larger UK shipbuild sector that is not totally reliant on MoD orders (which it cannot as RFA ship are subserviently being tendered internationally because of eu rules).

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