Job loss fears as coalition threaten carriers

Published on Wednesday 8 September 2010 20:28

THE government is considering scrapping the proposed new aircraft carriers, putting the future of shipbuilding in Scotland on the line, the chief executive of one of Britain's biggest defence companies has warned.

• An artist's impression of how the new supercarriers could look. The project has been hit by rising costs

BAe chief executive Ian King made the dramatic revelation during a hearing of the defence select committee in the Commons yesterday.

He told MPs that the Ministry of Defence had asked his company to look at scenarios "ranging from one to no carriers".

And he said the move could lead to the permanent loss of skills and bring about the end of the British military shipbuilding industry.

His comments appeared to confirm fears the 5 billion project for the two supercarriers, which is supporting the future of shipbuilding on the Clyde and at Rosyth, as well as other UK yards, could be among the casualties of the Strategic Defence Review (SDR) which the government confirmed is due to report in four or five weeks' time.

• Analysis: Scrapping carrier programme would be a risk too far for coalition

• Plea over Moray RAF bases

The loss of carriers would cost 4,000 jobs on the Clyde and 1,500 at Rosyth, as well as 1,000 to 1,500 engineering subcontracting jobs across Scotland. The project has already been hit by delays and costs rising from 3.9bn to 5bn just over a year ago.

"The carrier programme is committed against two vessels, that is the current contractual commitment," Mr King said. "We have been asked recently, in the last couple of weeks, to look at a number of options.

"The programme is for two vessels, but the options range from one vessel to no vessels, but having an equivalent programme to maintain skills."

He went on to warn about the long-term consequences of cancelling the contracts. "If you terminate these carrier programmes, you lose a capability that you cannot replace at a later date," he claimed.

Midlothian Labour MP David Hamilton, who sits on the committee, asked Mr King if scrapping the contract would spell the end of British shipbuilding in the defence industry. Mr King replied: "That is exactly right. That will have an impact on the skills we have in the sector and defence exports; we will not be able to sustain that going forward."

Union leaders last night said they believed the real choice was between one or two carriers because the first, the Queen Elizabeth II, had progressed too far.

But Bernie Hamilton of the Unite union said: "Even cancelling one of the carriers would be devastating. It would mean that the coalition government will have succeeded in doing what Margaret Thatcher failed to do, which was destroy the ship building industry in Scotland."

Mr Hamilton added that the statement from BAe seemed to confirm that the ongoing review is "not about strategy, defence and security but about cost-cutting".

He said: "This is a spending review, nothing more and nothing less, which is bad for the security of this country."

The issue of the carriers project was also raised by Glasgow South West Labour MP Ian Davidson, the chairman of the Scottish affairs select committee, in Prime Minister's questions before Mr King gave evidence.

Mr Davidson said he was concerned about reports of the carriers being shared with France and continued doubts about whether they will be built. But he was told by the Deputy Prime minister Nick Clegg that he would have to wait for the result of the SDR in the autumn.

Mr Davidson demanded last night that Lib Dem Scottish Secretary Michael Moore "stands up for the Scottish shipbuilding industry". He also revealed that Mr Moore will be called in to answer questions from the committee when the SDR is published.

Mr Davidson added: "Without the carriers, the Royal Navy will be reduced to a costal defence force and that is not acceptable for short-term financial gain."

The Conservatives have claimed that their policy with the aircraft carriers, of looking at the options in the SDR, was no different to what Labour had planned to do in government.

But last night former Labour Scottish secretary Jim Murphy said: "For all their denials, it is now exposed that the Tories are actively looking at cancelling the whole project – not just one ship, but both.

"It is increasingly clear that the Tories want to do to ship building on the Clyde and in Rosyth what they did to the steel industry in Scotland."

However, government sources suggested that Mr King may have been playing politics and that there was no secret that the aircraft carriers had been on the table as part of the SDR.

A Ministry of Defence spokeswoman said: "The Defence Secretary has made clear that tough decisions will need to be made, but the complex process of a Strategic Defence and Security Review will be concluded in the autumn and speculation at this stage about its outcome is entirely unfounded." The SDR is looking at all aspects of defence spending across the UK with only the 100bn replacement for Trident safe from being cut.

The SNP has failed in a bid for the government to consider the proportional impact of cuts on different regions and nations in the UK, after Scotland took a disproportionate hit in the past decade.

The loss of ship building would be a further blow added to other cuts feared for north of the Border.

Although no final decisions have been made, the Kinloss and Lossiemouth bases on the Moray Firth are the most vulnerable of the three main RAF bases in Scotland because their continued existence relies on thedeployment of new reconnaissance and strike-fighter squadrons.

The Royal Marines' Arbroath base of 45 Commando is also at risk, as is the Black Watch headquarters at Fort George, near Inverness.. x