MoD considers pulling £4bn Clyde frigate contract

THE Ministry of Defence has admitted it is considering abandoning its promise to build the new type 26 frigates on the Clyde and instead seek an alternative from abroad, the head of Royal Navy has admitted.

By DAVID MADDOX Thursday, 13th November 2014, 1:49 pm

BAE's Govan yard. Picture: Donald MacLeod

With the MoD and defence contractor BAE in the midst of a dispute over terms of the contract for the frigates there has been speculation the UK could purchase French warships instead and Scotland would lose out on a £4 billion contract while the ship building industry could collapse potentially costing more than 11,000 jobs.

If the Royal Navy goes abroad for warships it will be the first time it has done it in peace time and would break a key pledge made to Scottish voters by the UK government during the referendum that the new frigates would be built on the Clyde.

Sign up to our daily newsletter The i newsletter cut through the noise Sign up Thanks for signing up! Sorry, there seem to be some issues. Please try again later. Submitting...

CONNECT WITH THE SCOTSMAN

• Subscribe to our daily newsletter (requires registration) and get the latest news, sport and business headlines delivered to your inbox every morning

• You can also follow us on Facebook, Twitter and Google +

In an interview with Defense News Admiral Zambellas said: “The aquisition process looks for a solution to be able to give us what we need.

“The affordability question that comes from that depends on the vest that industry can deliver.”

Crucially, he added: “You’ll notice I haven’t necessarily said that that’s the British industry, as the decision has not been made on what the solution to the requirement will be.”

Referendum

SNP defence spokesman and Westminster leader Angus Robertson said that the First Sea Lord’s comments showed that voters in Scotland were lied to during the referendum.

During the referendum campaign, the then Tory defence secretary Philip Hammond made it clear that a Yes vote would mean the ships would not be built in Scotland but a No vote meant the Clyde would get the contracts because the UK does not build complex warships abroad.

“The UK has not – except during the two world wars – ever placed orders for complex warships outside the UK, and I don’t anticipate that the UK would wish to do that in the future,” he said in November last year when Portsmouth was closed in favour of the Govan and Scotstoun yards on the Clyde.

He added: “I think there’s something there that people in Scotland need to think about very carefully.”

Then in August his successor Michael Fallon also confirmed the contracts were heading to the Clyde unless there was a Yes vote while announcing a £348 million contract for the Clyde.

He said: “UK warships are only built in UK shipyards.”

Mr Fallon went on: “This multi-million pound contract shows our commitment to investing in new ships for the Royal Navy and maintaining in the UK the expertise needed to build the warships of the future. It will benefit the dedicated workers of the Clyde, their families and the local economy in Glasgow.”

“This sort of investment by the UK Government is vital for the sustainment of shipbuilding in the city and the hundreds of specialist manufacturing and engineering roles that play an important role in providing war fighting capability for the Royal Navy.”

But reacting to Admiral Zabellas comments, Mr Robertson said: “This puts the lie to yet another Project Fear scare story rolled out during the referendum. Time after time we were told by the No campaign that warships could only be built in the UK.The best place to build these frigates is on the Clyde and everybody knows that.

“It would be a serious breach of trust if this is now being reconsidered - Scotland needs and deserves this work.”

No decision

A spokeswoman for the MoD told The Scotsman that no decision has been made yet on the frigate contract and confirmed that the First Sea Lord had reflected the MoD’s current position.

However in an effort to provide reassurance, she said: “Other than during the World Wars, since the start of the twentieth century, all the UK’s complex warships have been designed and built within the UK for reasons of national security. We do not anticipate any change to this policy in respect of the Type 26 Global Combat Ship.”

Jim Moohan from the GMB and a senior figure in the Confederation of Shipbuilding and Engineering Unions described the comments by the First Sea Lord as “ludicrous” and said he “does not understand what he is talking about.”

Hew pointed out that the shipbuilding industry had been through a decade of restructuring in the UK, including closing the yard in Portsmouth, which he said “has made us extremely competitive.”

He went on: “I very much doubt that the MoD could find better value for money or a higher stand of quality elsewhere in the world.”

But he also said that the frigate contract was essential for the future of the industry in Scotland and the whole UK.

He said: “We are on the cusp of breaking into a world market for warships with this contract because we will be world leaders in the field. It just requires a bit of common sense to take us forward.”

The contract, thought to be worth £4 billion, would be to build 13 new type 26 frigates, the next generation of warship for the UK to replace the type 23 frigates which are going out of service.

The MoD and BAE Systems are currently negotiating the terms of the contract but are reportedly in deadlock over the cost of the project and last month procurement defence minister Philip Dunne refused to put a date on the signing of a contract despite ministers previously saying it would be completed by the end of this year.

It is understood that the MoD is considering the FREMM frigate currently being built by France and Italy as an alternative.

SCOTSMAN TABLET AND IPHONE APPS