The Clyde still means shipbuilding to a workforce of thousands. When a leaked memo earlier this week revealed that 3500 jobs were in danger at the last two major Glasgow yards, those belonging to the BVT consortium at Govan and Scotstoun, the city faced not only the loss of the jobs but the end of the industry on which it has largely been built.
The Clyde still means shipbuilding to a workforce of thousands. When a leaked memo earlier this week revealed that 3500 jobs were in danger at the last two major Glasgow yards, those belonging to the BVT consortium at Govan and Scotstoun, the city faced not only the loss of the jobs but the end of the industry on which it has largely been built.
Today there is optimism with the announcement that the company has a terms-of-business agreement with the Ministry of Defence that would see it build 18 new frigates for the Royal Navy. That holds out the prospect of work for 15 years, but no guarantee of where it will be carried out. Alan Johnston, BVT's chief executive, was carefully neutral in describing both Govan and Portsmouth as "an option" for the steel-cutting. Nevertheless, the Clydeside workforce will attach some significance to his mentioning of 2013 as the date when this could start, as by then steel-cutting on the current contract for two aircraft carriers will be well advanced.
There are no guarantees - but as the recession brings instability and fear of redundancy into sectors once regarded as offering security, a 15-year timescale amounts to relative permanence. With a General Election holding out the prospect of a change of government within a year, however, this "commitment" could be undone as a result of the strategic defence review promised by the Conservatives. BVT's rationalisation programme, designed to save £500m by carrying out all naval shipbuilding on a single site (either on the Clyde where the two yards operate in tandem or in Portsmouth) is planned for a similar timescale, and the leaking of the memo has crystallised fears that if the Conservatives form the next government, large-scale job losses on the Clyde may be politically more acceptable than large-scale job losses in Portsmouth. Political tensions will increase if the 2011 Scottish Parliament election gives the SNP a second term at Holyrood and their opposition to the nuclear submarine base at Faslane is seen as antithetical to awarding defence contracts to Scotland.
In business terms, the Portsmouth yard has the advantages of modern facilities and being next door to the Royal Navy's main dockyard. In the Clyde's favour is a solid track record of performance and expertise, as recently evinced by the transfer of two sections of the carriers due to be built by BAE Systems at Barrow-in-Furness to Glasgow.
The skills of the workforce at Govan and Scotstoun demonstrate the vital role of defence-procurement retaining and highly-specialised skills, which support British industry and provide it with export opportunities. Defence-procurement decisions, however, must be based on a strategic policy, and too often that has reflected past rather than future requirements.
The present contract, for two 65,000-tonne carriers, the largest ships ever built for the Royal Navy, is more than £1bn over budget, taking the construction costs to £5bn. This enormous cost, at a time of immense pressure on public spending generally and on the MoD's £9bn-a-year capital procurement budget, not least when forces on the front line are hampered by unsuitable equipment and ageing helicopters, has called into question the necessity for the carriers at all.
