Wednesday, 6 November 2013

Carry On Up The Clyde

Today I managed to slack off for a few hours... sorry, I mean I found the time for some personal professional development in a solitary and reflective environment, during which I managed to catch the defence minister Phillip Hammonds speech about the announced restructuring being undertaken by BAE in its ship building business, along with the questions that followed.

Normally watching MPs debate in the House of Commons is about as thrilling as watching paint dry, but today was... well, really no different. Though it did have some moments of interest that we'll look at.

The basic plan that will catch most of the headlines is that BAE plans to close its shipbuilding yard in Portsmouth, resulting in the loss of about 900+ jobs. More job losses will occur at Bristol and at two sites in Scotland, though the numbers there are much more limited.

The stated reason for this consolidation is that BAE saw a surge in work recently what with the Type 45 destroyers, followed by the Queen Elizabeth class carriers and a couple of small export orders. That surge is now over and until construction begins on the Type 26 there is only limited work to go around, most of that being the construction of blocks for the second carrier, Prince of Wales.

What came as the most surprise to everyone however was the announcement that three new Offshore Patrol Vessels (OPVs) will be built in Scotland. To say it came out of the blue is an understatement.

The reason for this new work is because the MoD had previously signed a TOBA or Terms of Business Agreement (expect to hear that acronym/phrase in the press a lot over the coming days, it was mentioned at least ten times in The House) in 2009 that provided guaranteed work for BAE (and penalties for the MoD if that work was not forthcoming) in exchange for investment on BAEs part. 

As Mr. Hammond pointed out to the Commons, this TOBA would require the MoD to cover the expenses of BAE, such as redundancy payments, if they could not provide work for BAE to do. Building these three new OPVs will cost the MoD a net loss of £100 million, versus leaving BAE without the work and having to pay penalties under the TOBA.

The three ships were stated by Mr. Hammond to be based on the River class vessels that are already in service, but these new ones will be about 10 metres longer and their flight deck will be able to accommodate a Merlin helicopter. Since then much speculation has been thrown back and forth about whether these are new additions to the fleet or whether they will replace the River class.

Much light was shone on this matter when Mr. Hammond took questions. When the subject was brought up by other MPs, including cost, Mr. Hammond explained that the major cost for the Navy was not the capital cost of the ships themselves, but the ongoing maintenance and manning costs. He talked wistfully about looking at the numbers and the details during the next SDSR, but he as good as said to The House that these new vessels would replace the Rivers, as there was no additional money for three new crews. 

As for the cost of the ships themselves, that money will come from the breathing room that has supposedly been built into the MoD budget over the next few years. Given how quickly said budget breathing room has been used up after first being created, One suspects (for One is in posh mode) that the Treasury has been eyeing up the spare funds and the MoD is now scrambling to suck up all the loose money it can to avoid it being taken away.

Of course the big talking point is the closure in Portsmouth and the consolidation of all UK ship building in Scotland, a move which has been swamped by speculation about political motives, what with the Scottish Independence vote taking place late next year.

Before we get into that though I would just like to take a moment to say how absolutely despicable I think the SNP members in the commons are and to share with you my now great desire that one or more of them should fall in front of a train, bus or similar fast moving, heavy object. 

I cannot believe that in the wake of a serious announcement about job losses in Portsmouth one of them had the cheek to stand up and complain about how unfair it was that further job losses were to occur in Scotland. To say that he missed the forest for the trees is a serious understatement. To say that he's a complete and utter prat of the highest order is probably also a serious understatement.

His colleague nearly topped this though, by standing up and mentioning something about diaries, and how this proved that the SNP had saved Scottish ship building. The level of delusion in the SNP members was truly eye opening, as was seeing the contempt in which their fellow MPs (of all colours) seem to hold them. I actually would like the Scots to vote for independence, if only so we can be shot of this argument once and for all. If that happens then the Scottish people (in particular those who vote no) have my deepest and most profound sympathy. 

Moving on, yes, Portsmouth is to close. This came as quite the shock to MPs from constituencies in the area, who have worked hard over recent years to help organise deals to consolidate ship building and repair activities in the region, only to have much of their hard work swept away from under their feet. Naturally the employees at the Portsmouth yard were less than pleased, many informing reporters on scene about how they've been told previously by the company that they do better work than in Scotland, only to now be dealt this fatal blow.

The suggestion that this move is inspired by politics will not go away easily. BAE has stated that issues of the skill mix in the workforce, logistics and infrastructure were the key reasons. I couldn't help but notice though that as the BAE spokesman repeated this to a BBC reporter at Govan that he had to fight hard to hold back a smile. Either the reporter was doing something amusing off camera, or he simply couldn't repeat the well prepared statement with a straight face.

It has been made clear that not all of the workers will be laid off. Some of the design work for the Type 26 Frigate will still be done in Portsmouth, and there may be places in the Royal Navy dock facilities for some. It doesn't change the fact however that the bulk of the workforce are now being put on the unemployment line. 

Mr. Hammond did mention that a package would be put in place for investment in the area and that a scheme would be drawn up for "job creation". This will be quite a galling phrase for the people of Portsmouth to hear. It always amazes me that politicians never seem to learn the old lessons. If you want to reference a job scheme then fine, but don't try and spin it as a "job creation" scheme when you're slashing 900+ jobs first.

People are not stupid. You should know full well that within a matter of hours your manipulative language will be pulled apart in the press (and rightly so), that the public will not believe it anyway, and that ultimately you could make yourself look less like a deluded fool and/or snake like politician by just being honest from the start.

With the closure of Portsmouth, that means ship building (submarines aside) will be largely centred in Scotland for the forseeable future. But before Scottish workers get too comfortable, it's worth noting that Mr. Hammond repeated many times in The House, in response to a variety of questions, that the decision as to whether to proceed with Type 26 will not be made until after the independence vote. 

He was quite explicit in this, on multiple occasions, giving off a strong hint that a "Yes" vote for independence could see Type 26 construction moved back to England somehow. One does have to wonder (for One is again in posh mode) whether the government is indeed playing this deal for all the leverage it's worth against the possibility of Scottish independence. The entire thing has a distinctly political whiff about it.

What it also has a whiff of is the government once again being held over a barrel by BAE Systems. The cost of all this shuffling about will be borne by the MoD, which is of course another way of saying the taxpayer. BAE gets to consolidate its footprint and significantly reduce its costs going forward into a lean period, while the government gets the joy of paying for it all. 

It will likely take a long time to unpick all the details of this. The National Audit Office and the Commons defence select committee will eventually get to have their say, at which point some of the finer details might emerge. Suffice to say that neither the government nor BAE (or indeed Scotland) has come out of this looking particularly well. The PR fallout from this promises to be quite something. It's impact on the independence debate could also prove to be quite interesting. 

An English lead "Yes" campaign could be coming to Scotland soon.


  1. The loss of Shipbuilding in Portsmouth is very distressing - although 11,000 jobs and a major Naval Base have survived, but as a convinced Unionist there seems to me to be great benefit in illustrating in stark terms what a Scottish vote to break up the Union will mean...a discussion that the SNP have been trying very hard to avoid.

    A sad day, but perhaps a necessary one.

    aka GNB

    1. One (being posh too) has to vehemently disagree with this comment. It just shows the problem that Portsmouth has in getting momentum to defend its position, as there are far too many apologists in England who are prepared to sell their own countryman down the river quite literally in this case. Not one that Scotland suffers where everybody of whatever political view or colour rallies around to defend their own people.
      The simple fact is that BAe systems took over the Portsmouth operation. BAe shipbuilding was always based in Scotland and therefore the senior management was Scottish. They have never had any intention of keeping Portsmouth open from day one.
      So we are happy to destroy Portsmouth so we can keep 5m people in the Union with a bribe, not only do they get Free Prescriptions (we pay for these), Free Elderly Care, Free University Education (my son is paying £9k a year) and no reduction in their grant (my Local Council cutting £150m this year and cut £100m last). So the only thing I can see being a committed Unionist gets you is the right for Scotland to have 60% of its GDP generated by Government spending.
      I am sorry but I see little “benefit” for the people of England in this agreement, if as they allege they only get the same proportion of GDP spent on them as they generate can somebody please explain how they get all these “Free” items.
      Let’s not forget that University Fees only voted through because of Scottish Labour MP’s voting for it even though they were not affected, Gordon Brown signed the TOBA so his constituency got the Carrier Build (and why do you build a ship in a dock when it has to have a complicated folding mast to get out of the river? Oh year GB’s constituency).
      It was summed up last night on Newsnight when a Scottish presenter, talked to a Scottish journalist (wearing a tartan suit), and discussed the English job losses with two Scottish MP’s.
      It’s about time we had an English independence vote and told the leaches of Wales, NI and Scotland to fend for themselves we’ve had enough of being the Milk Cow.

    2. If it were me and I was trying to apply pressure, I'd be much more inclined to close Scotstoun and leave the subtle hint that Govan would be next if they went independent.

    3. Apologies to Anon, your comment got trapped in the spam filter. Only just found the e-mail about it.

  2. An excellent post Chris; I agree with everything except the Scots leaving – I would like them to stay in the Union. As for the SNP... you may very say that, I couldn’t possibly comment... :)

    One point I don’t think has been covered is the impact on the MHPC program. Will the early replacement of the Rivers affect the outcome of the MHPC? Will it mean different type/size hulls for survey and MCM now the “joining” patrol ship type/size type hull has been removed? Or will it make it more likely that any MHPC hulls which are built will be evolutions of the River class?

    1. Honestly Gareth, I think we should just let Scotland go. Let them see what Independence is like and be done with it. At least that way the argument would be over. I get the distinct impression that there are lots of people in Scotland that don't like the English much, but will simply vote no because they're not sure how the economics would pan out. The imbalance of political and economic advantage given to Scotland just to keep any notion of independence quiet also gets my back up.

      As for the MHPC program, I can't see this affecting it. I think we're going to just see a straight swap, these new ships for the Rivers. Maybe the Rivers will end up in the hands of the Coastguard or be sold off to governments in the Caribbean? Either way, I think the MHPC will be unaffected. This whole thing is nothing more than taking the opportunity to replace some old ships while there's a window and at the same time avoiding the political damage of paying yards to do nothing.

    2. I am greatly disappointed that the government can not look further than the profit and loss account of BAE to see that we need a strategic, long term plan for vital national interests. I want to know what others think would be a reasonable & realistic per annum spend on building Royal Navy ships for a perios, say 2015 - 2030... I believe £1 billion per annum could be provided for... your thoughts

    3. Evening James,

      Google just ate my last response, which I'm less than impressed about (Google makes the government look competent and capable). You could spend a billion on ship building, another billion on aircraft and another billion on land warfare. Could, but wont. The current government, the last government, and likely the next government have no interest in the military other than the minimum they can get away with spending without causing too much upset.

      My hope is that if something is to come of this Portsmouth debacle it's that defence and defence manufacturing gets the spotlight for a bit. Next weeks Question Time from Portsmouth should be interesting to say the least.

    4. Sorry, forgot add; if you spend a billion a year on warships then you also need to find homes for them, crews for them, and fuel etc for them. Unless you sell them off at a discount. Depends what you're planning to build I guess.

    5. Well I have no way to substantiate this... but the figure I had in mind was exactly £1 billion per annum for building ships from 2015 - 2030 ... I know such blogs take a dim view on "fantasy fleets" but I have reached such a point of despair if I don't get this off my chest I might do myself great damage... I have a reasonable budget, a timeline and a measured plan giving me the following additions to a Fleet for 2030... kindly indulge me...

      I would order 16 Type 26 (8 x ASW; 8 x GP) I wont go into detail specification, now, but I want the GP to have 24 Mk 41s and could cope with the ASW being FFBNW - both versions with CAMM of course. First cut of steel 2017 commissioned 2020, a further ship 2021 with 6 years of two ships following, then then one each 2028. 2029. Budget £8bn ...this includes a very heavy contingency for cost growth. This will keep the two Scottish yards busy throughout the decade. but with some capacity.

      These are essential to the Royal Navy to ensure we can meet all our commitments, provide escorts to any carrier group and have some slack in the system. I am a firm believer that no matter how capable a ship it can not be in two places at once. It is treasonable how governments, of all hues, have reduced the number of escorts to a bare operational minimum. My suggestion means Force 2030 will have 22 Escorts (Type 26 & 45) - its far from ideal, but its workable, its not fantasy fleet territory ...yet...

      In the 2015 SDSR I would order 2 Commando Assault ships.(LHDs -call them anything but carriers) off-the- shelf design like Canberra/Juan Carlos... HMS Fearless (building starts 2018 launch 2021) and HMS Formidable (launch 2023) I again factor in a big contingency and budget £1.75 billion. These will directly replace the capability of HMS Ocean and HMS Bulwark & Albion (but I have a plan for the latter two.) We can not have the QE class carriers up close and personal to an opposing coast and the QEs do not have dock facilities which are vital for landings. (I would make sure an F35B can lilly pad)

      I would have made it possible to build most of them at Portsmouth ...

      I will replace Argus in 2020 with the two Albion class ships - I will raid the Dfid budget (£200m ) to provide enhanced medial facilities on each ship (have one on extended readiness which will reduce wear and tear on both and see them, with CSPs, reach out to 2040) As a sop to the tree huggers the in service Albion-class will provide soft diplomacy through offering cross government medical visits to West African settlements; ... Again this is not beyond a plausible force 2030. Crew? Made up of RNR reserve, RFA and NGOs.

      Finally, and in reality already in early planning so not entirely fantasy realms, I would order
      5 MARS (SSS) starting 2016 then every two years 2024. Hulls built in Korea to keep costs low, and fitted out Portsmouth. Budget £1.5b again I think realistic. I would build a further support ship to replace Diligence, common hull, propulsion, comms et al as the MARS SSS but fitted out with the necessary workshops etc.... £300m

      I still have some change so I would also order 2 further Astute class subs at £2.25b

      And so my total spend is actually under £15b (I am doing a Hammond and building a further contingency for cost growth into my plan)

      at £1 billion per year (a figure that will sustain the Royal Navy, maintain a drum beat of production, keeping skills relevant, ensure some vital strategic industries remain within communities that are kept vibrant and in employment...) is not unrealistic. It will provide a highly capable Force 2030

      I feel much better now...

    6. Annnnd breathe! You're more than welcome to clear your chest here.

      I wonder would there be a cross over in your plans between your MARS order and your new LHD order? You have a cross over where Portsmouth is building the LHD and doing fitting work for MARS.

  3. Thank you so much, Chris, for reading my post, and I can see from your question you must have given it due attention...

    Yes, my plan needs some refinement... in fact I propose a slight change with the first 3 MARS (SSS) having thier hull built in Korea, the fitted out in Porstmouth with the schedule 2018, 2020, 2022. I will then do slot in the Diligence replacement for 2024. Finally the last two MARS (SSS) being completely built in Portsmouth (using some of my contingency if necessary) 2026 and 2028 ...

    1. Afternoon squire,

      That looks like it fits a bit better. On the general subject of "fantasy fleets/armies/air forces" etc I'm generally not opposed to them as long as, as in your case, they have a grounding close to reality. Obviously any fantasy/alternate proposal has an element of unrealism in it, as inherently it's suggesting something other than that which the government is planning on doing.

      I think the problem with fantasy fleets comes when they go right off the rails into the land of five carriers and 50 escorts etc.

  4. thanks Chris...

    I don't know your view on the current PM - but you couldn't publish mine. And its events such as this that lead me to despair.

    We are sending a ship that is designed to blast planes/missiles out of the sky as a token gesture to appease the world's fickle audience that Team GB will do the right thing. I have no doubt our professional service men and women will do everything they can to help ease the pain and suffering in this latest humanitarian disaster ..but... it highlights how our politicians have no vision..

    My Force 2030 would have had the forward based (Bahrain, Singapore, ), DFID financed, Albion/Bulwark in and around the region, it would have had the enhanced medical facilities, a more than residual level of supplies on board for such events and given notice to deploy when the weatherman had identified a serious climactic event ... not days after, with added to days to get there... the same ship-class would cover the hurricane season in the West Indies ... this would show a serious commitment to worldwide disaster relief and humanitarian aid... and if the government had such an ambition, it would ensure such ships were made available now and fully funded from the DFID budget... sure, crewed by the marvellous RFA, and available for immediate deployment should there be a conflict and a need for a primary casualty capability, but meanwhile doing soft diplomacy around the deprived coasts of the world... that is sensible thinking... :)

    1. Trouble is, costs a lot of money to forward deploy to Singapore. If we're looking at it in cold terms then the capital gained from a disaster relief mission isn't as much as would initially appear.

      HMS Daring is a very capable ship though, with a very capable crew. That and flying in resources using a C-17 should make a difference for those people, hopefully.

    2. @ James - I have long said we need to have a new "Joint Casualty Treatment Ship" or two which could do medical diplomacy and/or disaster relief when not required by Her Majesty Forces.

  5. I agree Chris that it, the type 45, is a very capable ship and no question the crew will perform amazing feats ...but my issue is with the government and these cynical moves, lack of vision in terms of capability and bordering on negligence in terms of funding against what our service people are asked to do.

    There is money to fund, as Gareth Jones suggests, a class of ship that could be built and offer this medical/humanitarian diplomacy that we, as a nation, can be rightly proud of. Look how much we pay in interest on the government debt to see the scale of waste, or on other departments
    (we can all name them) point is, its CHOICE.

    I don;t dispute, Chirs, you feel the same way, that the DFID budget is bloated and could easily fund, the building and ongoing costs, over a 10-20 year timeline.This class of ship could have been built in the UK, in Portsmouth indeed. The hundreds that will be laid off will have a major impact on our, UK/Portsmouth, economy, various welfare payments will rise steeply, future generations looking to apprenticeships on the ship yard will be impacted as these fall dramatically... there is a huge social cost to these decisions, and when the multi-millionaires, in this current cabinet, are sat on the deck of their yacht writing their autobiographies - they will wipe their hands of the broken communities their decisions left behind.

    So capital and running cost, Dfid, Crew, part RFA, part NGOs and part local exchange. Benefit: immense.

    Ps... don't get me started on providing a C17 - again DfID should be made to fund the purchase of 3 C17, to ensure a 24/7 flight is made available for such events as this weeks on...,

    1. I can see the merits of your earlier argument in turning the two Albions into disaster relief/hospital ships if a replacment was built for them in the amphibious assault role. The question is about were to deploy them. Forward deploying costs money and you have to make sure you're in the right spots to have a decent impact. DfID certainly could afford to spare a few quid for some RFA manned vessels that would essentially meet the remit of their department.

  6. Good point about where to deploy them, Chris..

    OK, so returning to my concept of tasking the two Albions, with DfiD funded enhancements that give it increased medical facilities and other necessary equipment for a dedicated humanitarian/disaster relief role, ( given that the RN get two amphibious assault ships a la Juan Carlos/Canberra)...

    The hurricane season, in the Caribbean, is fairly predictable and so I would have one Albion in the region for the duration. The crew would include contributions from the local governments. I dont see any issue with this.tasking.

    What some clever people from DfiD would have to do is then crunch some data about weather patterns (I often hear mention of the"typhoon season" for example), look at previous instances of where these events have taken place and then make decisions on the best forward base at any given time... so if there is a period of the year that brings certain climactic events, that are known to have the potential for serious humanitarian issues - that's where our efforts are deployed.

    I have no issue with Dfid using my hard earned tax to fund these two ships for such events. Knowing also that if there was a serious conflict then they would be immediately available to provide their capability to our fine Royal Navy. And I believe most people would agree on this basis.

    Of course, there would be joint exercises throughout the year, with both our own navy and allies, and of course, I am keen to on this medical diplomacy idea where the ship would visit deprived areas and the DfId funding has direct benefits...

    I wonder what others think..

    1. As long as we don't overestimate the value of medical diplomacy.

  7. As sending HMS illustrious reinforces, I want my government to respond to such humanitarian issues with a capability that will make a significant contribution... But as we will see, once the news headlines rumble on to the next event of death and disaster, the lesson that we need a forward based, appropriate class of ship able to deploy at very short notice with the kit to deal with such humanitarian issues, will be ignored.

    Let me clarify what I mean when I use the term "medical diplomacy". It is infact short hand for a mission that contributes in several ways. My Albion class ship is parked off shore and its enhanced medical facilities are being used by teams of Army/Navy medical reserves doing a range of good stuff supplemented by NGO providers of medical care, In my scenario, They are ferried back and forth by the 2 helicopters chartered by DfID (more than likely piloted by ex-service personnel) similar to the SAR contract.

    Meanwhile on land, in the town and villages, pre-planned small infrastructure projects are taken place, sanitation, a small clinic is built, a road or bridge repaired, all undertaken by Royal Engineer Reserves, gaining experience, all providing the notion of downstream, preventative diplomacy. Further the DfiD "experts" locals are holding talks with senior locals, building trust, or a team for the Trade Department (do we still have one?) work closely with local business about opportunities ...

    Again, Chris, thanks for letting me put, on record, my thoughts...

    1. No worries James.

      - As much as it's a genuinely nice thing to do to provide support to foreign nations in times of disaster (and we could perhaps do more) is it really a source of political/trade capital? As opposed to just being a good thing? I would suggest that the positive out-turn in terms of trade or diplomatic leverage would be minimal.
      - Are reserves really the best people to be manning such ships? I'd be more inclined to have permanent crews. I'm not sure reserves should be called out for such things. From an employers perspective it's not great.
      - Pre-planned infrastructure? If we don't know what's going to get wrecked can we really pre-plan? Or do you mean in the sense of having say a generic design for a clinic that can be put up using carried materials? Or just a list, like an action plan, for things that need to be addressed?

  8. sorry, I didn't explain myself well enough.

    The pre-planned infrastructure and the mission I talk about, in the second and third paragraph, is not a response to a specific event. It is the subject of planned visit to a specific area, lets say West Africa, where the UK government through its various departments and in partnership with NGOs schedule the visit of an Albion class ship, in advance, to do all the good stuff I mentioned. DfiD liaise with the national government of the country in question and plans a number of humanitarian interventions... so, lets say DfiD set up, in partnership with a leading charity, cataract surgery for the town to be visited and its local region... all good stuff, funded by the DfID budget. while that's going on plans have been put in place to rebuild a bridge perhaps, this is where the royal engineers might come in ...all good soft diplomacy. the sort of thing the British Army rolls their sleeves up and get involved in... and once draw down from Afghanistan young soldiers will need these sort of opportunities to keep skills relevant.

    but returning to the point of this topic... its about maintaining the capability of a ship that can do the role of primary casualty receiving... but, thank god, when there is no need for its direct use, relevant skills are still maintained , and skilled crew and others can be put to effective use for UK diplomacy and influence.

    All contingent on two spanking new amphibious assault ships, to keep shipyards busy... a virtuous circle... all within my budget... all in a realistic timeline...but no politician willing to take up my ideas ...

    1. Afternoon James,

      Right, that makes more sense. Pre-planned as in "we're off to East Africa next year chaps, lets get planning". That I can see, could make some use of reservists, and has the potential to do a lot of good, depending on how much money you can wringe out of DfID.

  9. Exactly... retaining the use of the 2 ship Albion class within the fleet, covering some of the tasks (hurricane season - WI) , extending soft diplomatic reach through planned humanitarian visits, and forward based to deal with emergency disaster relief with the PM making a clear commitment that this is all covered by DfiD funding (except for, god forbid, use as a primary casual evacuation in a time of conflict) ...all contingent on Royal Navy getting 2 amphibious assault ships (HMS Fearless & HMS Formidable) built at Portsmouth...

    We have, unsurprisingly, found (increasing) amounts of money to send to this most recent, and regrettable, disaster; we found huge sums of money to bail out a number of banks and underpin the confidence in the financial sector ...but a critical, hard earned, nationally strategic industry that supports an entire community, within an island nation, is allowed to face the results of free-market forces... As I have said before, this is short term thinking of the worst kind. The welfare benefits bill, the loss of income and other tax, the damage to personal consumption within the local economy, the negative multiplier effect to industries in the wider supply chain will all aggregate to a figure that will make the treasury's eye's water...and my specific point here, is that there is money to fund a ship building programme that allows the Royal Navy to meet a wide and diverse range of tasks, to keep local economies growing and vibrant, to maintain vital industrial & strategic skills but our government chooses not to.,