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Build £1 Billion RFA's In UK

Tuesday, April 24, 2018

SENDING £1 BILLION ROYAL NAVY SUPPORT SHIP ORDER OVERSEAS ‘BETRAYAL OF MAY’S RED, WHITE AND BLUE BREXIT’ SAYS GMB

Shipyards in Germany, Italy, the Netherlands, Poland, South Korea and Spain now eyeing up critical defence contract, GMB investigation reveals.

GMB, the union for shipbuilding workers, today said in the aftermath of the blue passports fiasco, Ministers must reverse their decision to put a crucial £1 billion order for three new military support ships out to non-UK bidders.

New Fleet Solid Support ships are needed to service the UK’s £6.3 billion Queen Elizabeth-class aircraft carriers and their strikeforce of new F-35 fighter planes. The Ministry of Defence has said that the order will go out to full international tender on 30 April 2018.

GMB research, published today, shows that up to 6,700 jobs could be created or secured in the UK if the order went to a domestic shipbuilder – including 1,800 much needed shipyard jobs.

A further 4,700 jobs could be secured in the wider supply chain – including in the steel industry.

The union estimates that £285 million would also be returned to the taxpayer through income tax, national insurance contributions and lower welfare payments.

Exclusive Survation polling, commissioned by GMB, found that 74 per cent of people want the new Royal Fleet Auxiliary (RFA) ships built in the UK. GMB maintains that RFA ships are military vessels that are crucial to the UK’s defence capabilities.

Leave voters were also significantly more likely to support a general policy of retaining defence manufacturing orders in the UK than Remain voters (by 64 per cent to 52 per cent).

The Government’s current policy is to build all Royal Navy warships in the UK but orders for RFA ships are put out to international tender.

Shipbuilding companies from Germany, Italy, the Netherlands, Poland, South Korea and Spain attended a recent Ministry of Defence industry day on the Fleet Solid Support order according to documents obtained by GMB under the Freedom of Information Act.

The last contract that went overseas was the MARS Tide Class tanker order, which was awarded to South Korea’s Daewoo Shipbuilding and Marine Engineering in 2012. The order has been hit by cost overruns and delays.

Shipbuilding and ship repair employment in Great Britain has fallen from an estimated 122,200 in 1981 to under 32,000 in 2016 – threatening the UK’s sovereign defence manufacturing capability [see the notes for regional breakdowns of shipbuilding jobs].

Ross Murdoch, GMB National Officer for Shipbuilding, said:

“The Government looks set to repeat the blue passports fiasco by putting another order of national significance out to tender abroad.

“Ministers are not bound by normal EU rules on competitive tendering when it comes to military ships. There really can be no excuse for sending our shipbuilding contracts overseas.

“We have a highly skilled shipbuilding workforce in the UK that is more than capable of making these ships at a fair market price. We face being sold down the river if the work goes to artificially subsidised international competitor shipyards instead.

“At a time when global tensions are rising, the Government should use this order to ‘buy for Britain’ and rebuild our defence shipbuilding manufacturing capabilities.

“Shipbuilding workers are disillusioned by orders flowing overseas while highly skilled jobs at UK shipyards are being cut.

“It would be a gross betrayal of the spirit of the ‘red, white and blue Brexit’ that Theresa May promised if this crucial contract is awarded outside of the UK and jobs here are lost as a result.”

ENDS

Contact: GMB Press Office on 07958 156846 or at press.office@gmb.org.uk

Notes for editors

[1] All figures and tables are taken from the GMB’s new research report, Turning the Tide: Rebuilding the UK’s defence shipbuilding industry and the Fleet Solid Support Order, which is published today [???]. The report can be found at www.gmb.org.uk/turning-the-tide.pdf

GMB has raised concerns about heavy subsidies paid to some international shipbuilders that are not available to UK employers.

The following shipbuilders attended a Ministry of Defence industry day on the Fleet Solid Support order in September 2017. Two of the non-UK shipyards (Fincantieri and Navantia) are state owned.

UK shipyards

Non-UK shipyards

Company

Locations

Company

Nation

Babcock International

Appledore, Devonport, Rosyth

Damen

Netherlands

BAE Systems

Barrow-in-Furness, Govan, Scotstoun

Daewoo Shipbuilding & Marine Engineering

South Korea

Cammell Laird

Birkenhead

Fincantieri

Italy

Ferguson Marine

Port Glasgow

German Naval Yards

Germany

Harland and Wolff

Belfast

Hyundai Heavy Industries

South Korea

 

Navantia

Spain

Remontowa

Poland

Source: Ministry of Defence response to GMB Freedom of Information Act request, 08 March 2018

[3] GMB estimates of shipbuilding and ship repair employment in the UK.

Region

30110 : Building of ships and floating structures

33150 : Repair and maintenance of ships and boats

Total

 

Direct

Supported

Direct

Supported

Direct

Supported

Grand total

North East

175

119

350

181

525

300

825

North West

8,000

5,426

150

78

8,150

5,504

13,654

Yorkshire and The Humber

45

31

350

181

395

212

607

East Midlands

75

51

75

39

150

90

240

West Midlands

75

51

75

39

150

90

240

East

500

339

600

311

1,100

650

1,750

London

100

68

175

91

275

159

434

South East

400

271

4,000

2,073

4,400

2,345

6,745

South West

6,000

4,070

2,250

1,166

8,250

5,236

13,486

Wales

400

271

250

130

650

401

1,051

Scotland

6,000

4,070

700

363

6,700

4,432

11,132

Northern Ireland

695

471

35

18

730

490

1,220

UK

22,695

15,393

9,035

4,683

31,730

20,077

51,807

Supported jobs include those in the wider supply chain.

Sources: ONS, Business Register and Employment Survey (2016)
Northern Ireland Statistics and Research Agency, Business Register and Employment Survey (2015)
ONS employment multipliers


[4] Military shipbuilding orders are exempt from normal EU competitive tendering requirements under Article 346 of the Lisbon Treaty, which states that: 

“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; such measures shall not adversely affect the conditions of competition in the internal market regarding products which are not intended for specifically military purposes.” https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A12016E346

[5] A number of UK shipyards have been hit by job losses in recent years. These include:

In November 2017 and March 2018 Babcock International announced that 500 jobs would be lost at Devonport and 400 jobs would be cut at Rosyth. 375 further proposed job losses were announced last year.

BAE Systems announced 1,775 job losses at Filton, Glasgow, Rosyth and Portsmouth in 2013 (with the latter yard ending shipbuilding activity entirely).

BBC News                Babcock axes 500 at Devonport dockyard, 08 March 2018 - http://www.bbc.co.uk/news/uk-england-devon-43321441

Rosyth Dockyard faces 250 job losses as carrier work ends, 28 November 2017http://www.bbc.co.uk/news/uk-scotland-edinburgh-east-fife-42152571   

Babcock Rosyth to cut further 150 jobs, 13 March 2018 http://www.bbc.co.uk/news/uk-scotland-edinburgh-east-fife-43395146  

BAE Systems            UK Naval sector restructuring, 07 October 2013 https://www.baesystems.com/en-uk/article/uk-naval-sector-restructuring  

Announcement of organisational changes, 10 October 2017https://www.baesystems.com/en/article/announcement-of-organisational-changes

 

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