Rosyth's #350m slap in the face The final Trident blow

There was immediate angry political reaction.

SNP leader Alex Salmond said: ``This latest revelation uncovers the scale of the financial scandal which took the contract to Devonport. It is clear that the Tories were determined to send the contract to the south coast regardless of the financial consequences. The competition between Rosyth and Devonport was a fraud and the Scottish Secretary should be considering his position.''

Shadow Chancellor Gordon Brown said: ``The Public Accounts Committee will have to have a look at this. I will want to know the full details of any settlement. Nobody said that when Rosyth was bidding against Devonport for the Trident contract there would be any question of a subsidy.''

Hopes that Rosyth might have to be given the refit work arose last year, when it was revealed extensive modifications were required at Devonport to allow it to carry out the submarine refit work.

The conversion work will involve construction of the docks, nuclear fuelling facilities and various stores buildings.

Union leaders at Rosyth last night condemned the decision as the latest in a series of broken promises and one which would cost the taxpayer at least an extra #100m.

Delays over safety fears at Devonport last year fuelled optimism that the nuclear work might be switched back to Rosyth in the long-term.

The Nuclear Installations Inspectorate, the independent body responsible for licensing atomic facilities in the UK, said serious problems existed at Devonport because of the instability of the limestone base on which it is built.

To comply with nuclear safety rules, Devonport Management Ltd would have to prove that a 16,000-ton Vanguard submarine could be held securely in drydock during the replacement of its highly radioactive fuel rods in the event of an earthquake or large explosion.

However, Mr Brian Negus, convener of the industrial unions at the Scottish dockyard, said he was not surprised at the decision to proceed at Devonport.

``It is a con. We knew it was a con then and they have proved it now. They have this dock three-quarters built at Rosyth and now they are going to build this brand new one at Devonport and it is the taxpayer who will be footing the bill,'' he said.

``By hook or by crook the Government wants to shut Rosyth. I have never doubted that for a long time. They cannot at the moment because there is no facility to undertake nuclear submarine refits elsewhere.''

Although the transfer was due to take effect next year, the delays in construction has left Rosyth with the nuclear refits at least until 2001.

Mr Negus said he suspected the nature of the construction contract at Devonport would take the final cost even higher, but being proved right three years after the original contract gave him no satisfaction.

Mr Colm McConnell, branch secretary of the white collar union IPMS, said there had been a litany of broken promises and changing of rules by the Government.

``According to Malcolm Rifkind, the decision on the refit contract was made purely on costs but here we see figures of at least an additional #100m,'' he said. ``It was a political decision to move the submarines south and the taxpayer will have to pay the price for that.''

Councillor John MacDougall, convener of the new Fife Council, said there was no strategic or economic logic in the original decision to switch work between the yards, reversing Rosyth's submarine skills and Devonport's expertise in surface refits.

``A massive amount of Government money went into both communities to develop these facilities and now another huge sum of taxpayers' money

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is being spent to satisfy those who allow politics to come before common sense,'' he said.

The privatisation will place a 51% controlling share of Devonport in the hands of the American engineering contractor Brown & Root. Labour voiced its deep concerns at the decision to give responsibility for refitting Britain's nuclear deterrent to an overseas company.

``The privatisation is a triumph of ideology over commonsense,'' Shadow Defence Secretary David Clark said. ``We are very unhappy indeed that an American company is now going to be in charge of the refitting of our `independent' nuclear deterrent.''

The Government's decision represents a policy U-turn as Brown & Root was restricted as a foreign company to a 29.9% stake when the consortium was formed in the mid-1980s to run Devonport.

Meanwhile, the Government was accused by Mr Jack Dromey, national secretary of the Transport and General Workers Union, of wanting to use up to #50m from the pension funds of Rosyth and Devonport naval workers to smooth the path for the private companies who will take over the yards.

Mr Dromey accused the Government of ``doing a Maxwell'' with the pension funds of 7000 dockyard workers. Under a complex arrangement Mr Dromey claims that most of the surplus from the pension fund, which he puts at #60m, has been used as a bargaining tool for negotiations between the MoD and the two consortium groups who want to take over the yards.

Mr Dromey said the cash, which had been accrued from investing pension fund money, would be ``raided'' to help pay for measures to make the yards more attractive to the buyers.

Two separate private companies have managed Devonport and Rosyth since 1987 but the MoD has always retained ultimate authority on pensions. Both naval bases have separate pension funds with the combined surplus around #60m.

The MoD dismissed the allegation as ``nonsensical'' and said any arrangements over pensions would not affect any benefits to current or future pensioners.