The UK Independence Party has called on the government to intervene in a review of UK operations being carried out by defence firm BAE Systems in order to future-proof the Royal Navy shipbuilding industry in England.
BAE has engaged LEK Consulting to review the UK arm of its business. According to UKIP, some reports have suggested that the review could lead to the closure of the BAE dockyard in Portsmouth, Hampshire, which currently employs around 1,500 people. It is estimated that the closure would cost around £600m – a sum that would be covered by the Ministry of Defence following an agreement that was signed in 2009 that guaranteed work to BAE for 15 years.
UKIP has said that if the Portsmouth facility was to close, “it would not only have a devastating effect on the city’s economy, but would also have serious consequences for other shipyards across England.”
Cammell Laird at Birkenhead and A&P Tyne at Jarrow both act as subcontractors to BAE, and are currently working on the £6billion contract to build the new Queen Elizabeth and Prince of Wales aircraft carriers.
The Birkenhead shipyard was established in 1824 and produced almost 200 vessels during the Second World War, including the Ark Royal.
UKIP says that if BAE decides to close its Portsmouth dockyard then there would be serious consequences for both Cammell Laird and A&P Tyne as the subcontractor work could dry up.
BAE also have a yard on the Clyde where this work could be carried out instead if it chose to consolidate its operations. Such a move would see shipbuilding in England take a blow from which it would never recover as construction of British warships moved to Scotland.
Lord Alexander Hesketh, UKIP’s defence procurement spokesman, said: “If BAE close Portsmouth then it would have serious consequences for Cammell Laird and A&P Tyne.
“By 2014 Scotland could well be on its way to being an independent country and we would be in the absurd situation of Royal Navy ships being built in a foreign land.
“The government needs to step in and remind BAE which side its bread is buttered. The future of warship building in England is at stake.
“Furthermore, BAE’s claim to being Britain’s leading prime defence contractor now looks frankly ludicrous in the light of this cack-handed incompetence.
“A proposed payment to BAE of roughly £600m in closure costs, when added to the ongoing social security liabilities, probably equate to the commissioning of a seventh in class of the Type 45 destroyer, particularly as a significant discount must be applicable in the light of all of the development costs having already been recovered. This in itself is a significant investment in real manufacturing, rather than just paying people to do nothing.”