Scottish independence: Navy frigate contracts will be held after UK split vote

THE Ministry of Defence has revealed that contracts worth billions of pounds to build the next generation of Royal Navy frigates will not be awarded until after it is likely Scotland has voted in the referendum on independence.

Specifications for 13 new Type 26 Frigates were unveiled by the MoD yesterday, but crucially officials said that the contracts will not be awarded until the middle of the decade – after the independence referendum expected in 2014.

The MoD insisted the delay was normal but the announcement reinforced fears that Scotland risks missing out on the deals, putting 16,000 jobs and the shipbuilding industry north of the Border at risk.

In talks with Scottish shipbuilding union representatives in May, later confirmed by MoD procurement minister Peter Luff, the UK government said that if Scotland becomes independent the contracts will not be awarded to the two Clyde shipyards – Govan and Scotsoun.

Ministers have already pointed out that the UK has never awarded a contract for a warship or other sensitive defence equipment to a foreign shipyard and have said that this will not change in the future.

A senior Whitehall source said last night: “The timing of the contracts is significant and as has been said before contracts of this nature have never been awarded to a foreign shipyard.”

Unions have already said that the Type 26 contracts are vital for the two yards to remain in operation. They reacted with dismay yesterday to the timing of the awarding of the contracts.

Under European Union rules, defence contracts can be exempt from usual international contract rules, allowing the UK government to favour British manufacturers.

If a decision was made to allow yards from an independent Scotland to bid then the 
contracts would have to be made available to bids from yards around the world.

The Confederation of Shipbuilding and Engineering Unions (CSEU) last night demanded clarity over the referendum.

Hugh Scullion, general secretary of the CSEU, said: “This sort of speculation over the future of the Type 26 is causing massive uncertainty for thousands of Scottish families. There urgently needs to be clarity on the referendum and the substantive issues raised. This is not a game, these decisions affect working people and their families. Scotland needs certainty.”

Unite Scottish Secretary Pat Rafferty added: “It’s our members’ jobs, skills and their communities that are caught-up in the uncertainty, which is a total failure of politics particularly in this fraught economic climate.

“So our message to politicians is straightforward: Stop using our members’ livelihoods as a political football and start giving them clarity on their futures.”

Labour shadow defence secretary Jim Murphy said the new contracts could be a great opportunity for the Clyde shipyards. He said: “My own dad worked on the Clyde yards so I know how important this is for Scotland.

However he added: “But one thing is crystal clear – the MoD hasn’t built a warship in a foreign country in living memory, so if we leave the UK we leave the Royal Navy and lose its order book. The Clyde is a working river and must stay open for generations to come.”

But SNP defence spokesman Angus Robertson pointed to comments made Defence Secretary Philip Hammond, who said the awarding of the contracts was a “commercial decision” for BAE.

Mr Robertson said: “Given that more than 5,000 shipbuilding jobs were lost when Labour was in government Jim Murphy should acknowledge that it is not the London government that makes the yards successful – it is the second-to-none Scottish skills base and technical expertise that brings orders to the yards, and that will continue under independence.”

Yesterday the MoD insisted that the timing of the contracts had nothing to do with the Scottish independence referendum.

An MoD spokesman added: “We expect Scotland to vote to stay within the UK so we do not expect this to be an issue.”

Peter Luff, Minister for Defence Equipment, Support and Technology, said the new Type 26 Global Combat Ship “will be the backbone of the Royal Navy for decades to come”.

Concerns also remain over the future of carrier contracts for the Rosyth yard in Fife which is expected to refit and repair the two Queen Elizabeth-class aircraft carriers. It has faced rival bids from France and could also lose out if Scotland goes independent.