15-year MoD deal to secure thousands of shipyard jobs

Published on Tuesday 21 July 2009 21:59

THE Ministry of Defence has announced a 15-year deal worth £3.5 billion that should safeguard thousands of shipbuilding jobs and result in 18 new frigates being built on the Clyde.

The next class of frigate – the so-called Future Surface Combatant – will be built in Scotland as a result of the contract signed with BVT Surface Fleet Ltd.

Under the deal, BVT's bases at Glasgow, Portsmouth and Filton, near Bristol, will receive a minimum of 230 million a year from the MoD. The arrangement is expected to result in at least one of the 5,000-tonne frigates being built by BVT's Glasgow's yards each year.

BVT said the work would secure the long-term future of the Scotstoun and Govan yards after the completion of two 65,000-tonne aircraft carriers being assembled on the Clyde.

The deal was hailed as a "fantastic news" by Charles Thompson, BVT's communications director. "We already have a full order book for the next seven or eight years thanks to the aircraft carriers," he said. "But this gives us the commitment and the capabilities to deliver future programmes for the Royal Navy. It shows that our biggest customer has confidence in us."

As well as the aircraft carriers HMS Queen Elizabeth and HMS Prince of Wales, BVT is also finishing a contract to build six Type-45 destroyers.

Yesterday's announcement follows concern about the state of the shipbuilding industry on the Clyde. Earlier in the summer, a leaked BVT memo outlined plans for "rationalisation" after work on the two supercarriers comes to an end in 2016.

It claimed the MoD was prepared to meet the 165m cost of closing down Govan and Scotstoun or BVT's Portsmouth yard – a move that would have meant thousands of redundancies.

Last night, Angus Robertson, the SNP's defence spokesman, claimed uncertainty remained. He said: "There are still very real fears Labour's plans for the Clyde will involve job losses. No cast-iron guarantees have been given. Labour need to come clean."

But Mr Thompson said it was anticipated the new frigates would be built on the Clyde. "BVT is not in the game of reducing the size of its business. We are investing and developing new products," he said.

Defence minister Quentin Davies said: "The guarantee of 15 years' worth of work is especially pleasing to announce in the current economic climate.

"The contract … will help industry preserve a valuable skills base as the sector restructures to meet our future needs and will lead to significant financial benefits for the MoD and Royal Navy."