Battleships and bunkum
by Scott Minto
When the No campaign launched its website, the Unionist parties behind it helpfully included video clips of what they called “real Scots” giving their reasons for wanting to keep the UK together. The most repeated assertion in the series of testimonies was that shipbuilding would cease to exist in an independent Scotland.
First there was Tanya, who reckons we’re stronger as a “family unit”, that apprenticeships will vanish overnight somehow (or possibly be made illegal, we haven’t ascertained the logic of them just vanishing yet) and that we should stick together to build big warships to show the world what we can do.
Next up we had Robert, whose view is that there would be no shipbuilding in an independent Scotland. Presumably we’ll just be using strong language to keep enemies from our waters. (In fairness, Robert does admit that he hopes, rather than knows, that shipbuilding on the Clyde will have a future within the UK.)
Then there was Craig, proud to build UK warships and who believes there will be no work under independence. His argument takes a subtly different tack: “There’s no commercial shipping at all, it’s all MoD work, that’s all we get, that’s what sustains us, that’s what keeps these doors open here is MoD work, and Rosyth as well, so if we’re not going to build commercial ships and all we’re going to build is defence and frigates and aircraft carriers then that’s our livelihoods and that’s what keeps us alive”.
Finally we have Frank, who believes that shipbuilding is safe within the UK. “We build ships to the world and we’re fantastic at that!” is his view, though he offers no explanation as to why we would suddenly lose the ability to construct a seaworthy vessel if not ruled from Westminster.
So that’s four repetitions of the same argument – that an independent Scotland would have no shipbuilding as only the MoD uses the yards on the Clyde. But does any reality underpin the assertion? Let’s find out.
Scotland will need to build and maintain her own fleet to supplement what we inherit from our 8.4% share of the UK’s military. If equipment wasn’t transferred on independence then a monetary value for the equivalent would need to be agreed and could be used to go towards purchasing or building the vessels required. The latter would seem the sensible option both politically and economically.
But Scotland’s needs would be fairly modest in terms of a navy, and in the medium to long term the Govan and Scotstoun yards would need customers from elsewhere. Would their current biggest customer, the MoD, continue to purchase warships from Scotland when it was a “foreign” country?
The last time defence giants BAE were looking into possible investment strategies and called in consultants to look at the future of the Govan and Scotstoun yards (as well as their third UK yard at Portsmouth), the defence analyst they used – Howard Wheeldon, a senior strategist with BGC Partners – said:
“If BAE decide to close a shipyard because of uncertainty about future work levels, I think it would be Portsmouth. It would be natural because Portsmouth is smaller than the Clydeside operations. It’s true that if Portsmouth closed and Scotland went independent, all the yards would be in Scotland. But that’s not BAE’s concern. That’s the UK Government’s concern.”
Defence Secretary Phillip Hammond, though, has said it’s none of his business:
“It’s explicitly not our decision where BAE builds the Type 26s. It’s a commercial decision they will have to make.”
So the rUK may well end up with no shipbuilding yards of its own and be reliant on “foreign” yards in Scotland to build their vessels, despite claims from a senior Admiral and former First Sea Lord that “there is no way that what would be left of the UK would build its warships in another country” – a claim already undermined by the current government’s placing of an order for non-combat vessels with Korea:
“Hammond has rejected the bid led by an Italian company which would have seen the ships built in BAE System’s Govan yard and instead agreed a contract for them to be built in Korea. The work would have filled an important gap in the UK shipyards’ work programme between the new aircraft carriers and Type-26 frigates. However, in the case of the tankers, defence contracts are not governed by international competition law, which means Mr Hammond could have favoured domestic over foreign bidders.”
But what about the future MoD contracts to be undertaken on the Type 26 Frigates? Surely an independent Scotland is certain to lose that work? Not according to the Portsmouth News, a local newspaper which – as you might expect – follows developments in the shipbuilding industry closely.
A well-placed source has revealed a BAE Systems executive told them the new Type 26 programme will begin in the firm’s yards in Scotland later this decade. It comes as BAE reviews whether to carry on building ships in Portsmouth – potentially placing 4,000 local jobs at risk. A company spokeswoman said the decision on where it will build the Type 26s won’t be finalised until 2014. But a Westminster source said: ‘At a meeting last week, BAE said the first Type 26 will be made in Glasgow. From what BAE said, there would have to be investment in its facilities to accommodate the Type 26 in Portsmouth, so the first one will be done in Scotland.’
The commercial reality is that closing one or both of the Clyde yards would be the least sensible strategy for BAE Systems, as the yard in Portsmouth needs an expensive multi-million pound refit to undertake the Type 26 work while the Clyde yards don’t. BAE is a business, governed by economics rather than politics – it’s not in their interest to undertake needless expense. So if Westminster pushes BAE to close a Scottish yard, it would probably have to give BAE the money to refit Portsmouth.
How would that look to Scottish voters? Westminster funding a multi-million pound refit to Portsmouth with taxpayers’ money, in order to keep it open over a Scottish yard that required no such investment, would be a public admission that – directly contrary to what we were told by Tanya, Robert, Craig and Frank just a few short months ago – Westminster offered no future for shipbuilding in Scotland within the UK.
We should find out in the next few weeks which way BAE will jump. But whichever course they choose, one of the core arguments of the “Better Together” campaign will almost certainly be proven to be built on a lie.