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.