Clyde secures £4.2bn order for five warships
Five more warships will be built on the Clyde after the Prime Minister responded to the global instability caused by Russia’s invasion of Ukraine.
Rishi Sunak announced the £4.2 billion award to BAE Systems for Type 26 Frigates, bringing the total to eight and the total number of frigates being built in Scotland to 13.
The contract will support 1,700 jobs at the BAE systems sites in Govan and Scotstoun, Glasgow, over the next decade with 2,300 additional jobs supported in the supply chain across the UK.
The Prime Minister, who is attending the G20 summit in Bali, Indonesia, said: “Russia’s actions put all of us at risk. As we give the Ukrainian people the support they need, we are also harnessing the breadth and depth of UK expertise to protect ourselves and our allies. This includes building the next generation of British warships.”
A government statement said that it is taking steps with its allies to bolster security “in the face of increased Russian threats”
Defence Secretary Ben Wallace said: “We are investing in our fleet to ensure our Royal Navy maintains its world-leading capability to protect and defend our nation at sea.
“This design has already been successfully exported to Australia and Canada, proving itself as a world-class maritime capability, securing thousands of UK jobs and strengthening alliances with our allies.”
The UK-pioneered Type 26 is an advanced warship with the primary purpose of anti-submarine warfare. It will work to protect the UK’s continuous at-sea nuclear deterrent and Carrier Strike Group.
The Type 26 Frigates will be named Glasgow, Cardiff, Belfast, Birmingham, Sheffield, Newcastle, Edinburgh and London.
In addition the Type 26 frigates, work is soon to start on five Type 31 Frigates at Rosyth.
Pete Wishart, chair of the Commons Scottish Affairs Committee expressed concern that small Scottish businesses get their share of the contracts expected to emerge from the latest order.
“While the number of jobs being supported by this contract is very welcome for Scottish communities, it is important that Scottish defence SMEs are not overlooked in the supply chain,” he said.
“In our earlier report on the military landscape in Scotland, we were concerned that Scottish SMEs accounted for only 2.5% of the MoD’s total spending with SMEs.”
In a trading update today, Charles Woodburn, BAE Systems chief executive, said: “Order flow remains strong and our focus on programme execution, cash generation and efficiencies is helping us to navigate the challenging operating environment.
“Looking forward, our large order backlog, diverse portfolio position and focus on programme performance position us well for another year of top line growth and margin expansion in 2023. We see sales growth coming from all sectors and opportunities to further enhance the medium-term outlook as our customers address the elevated threat environment.”
The full year Group 2022 guidance across all metrics is unchanged on a constant currency basis from the Preliminary Announcement on 24 February 2022.
The UK Government’s frigate order came as MPs were told that military shipbuilding in Scotland would end if the country became independent.
The Scottish affairs committee heard evidence from Keith Hartley, emeritus professor of economics at York University, as part of its inquiry into defence in Scotland.
Shipyards in Scotland are involved in the building programmes for the Type 26 and Type 31 ships ordered by the Royal Navy. The Babcock site in Rosyth and BAE Systems on the Clyde in Glasgow are the main sites where defence ships are built.
Douglas Ross, leader of the Scottish Conservatives and MP for Moray, asked Hartley whether he could see a future for military shipbuilding in an independent Scotland.
Prof Hartley said: “At the moment the industry’s future depends on the Royal Navy. Without the Royal Navy you would not have an industry.
“An independent Scotland will presumably have a minute navy. It would be like, for example, Ireland, with offshore patrol vessels. In short, I don’t see a future for a Scottish warship-building industry in an independent Scotland.”
SNP MP Deidre Brock said that previous evidence from Babcock, which has invested more than £70 million in its Scottish facilities, suggested the company would expect to continue building military vessels at Rosyth.