Jeremy Corbyn calls for Navy Shipbuilding contracts to stay in the UK

Labour’s demand comes as the UK Government is preparing to put the £1 billion contract for building these ships out to international tender.

Securing this £1 billion investment for the UK’s shipyards would create around 6,500 jobs and also support other British industries, including steel.

Jeremy Corbyn MP, Leader of the Labour Party, is expected to say:

“Workers in British shipyards, from Plymouth to Rosyth, share a proud tradition - building the best ships in the world. But the Conservative government is trashing that tradition by offering up the Ministry of Defence’s most recent contract for three new Fleet Solid Support Ships to overseas companies to build abroad.

“This decision is wrong. Today we are calling on the Government to guarantee that these three new ships for the Royal Fleet Auxiliary will be built in domestic shipyards.

“Building these ships in Britain would benefit those working in and supporting our world-class shipbuilding industry. Over 6,500 workers could be employed through this contract, 1,800 of them in shipyards. Decisive public intervention in support of this vital industry would protect it from anti-competitive practices by overseas firms and other states.

“By refusing to help our industry thrive, the Conservatives are continuing their historic trend of hollowing out and closing down British industry. Over the course of the 1980s under the Tories, 75,000 jobs were lost in UK shipyards, leaving just 32,000 remaining.

“Our shipyards used to produce half of all new ships worldwide. Our current market share is now less than half a per cent. The Tories seem hell-bent on accelerating and deepening this industrial decline.

“The next Labour government will use public contracts as part of our bigger plans to upgrade our economy. Don’t listen to anyone who says we can’t build things in Britain and that a casino economy, which produces little but soaring inequality and insecurity, is our only future. Shipbuilding is not a lame duck, and can have a high tech, high skilled and exciting future right here in the UK.

“We can make sure that happens, but only if we reject the Tories’ outdated free market obsession that gives the whip hand to out-of-control multinational companies and doesn’t care about the everyday needs and wishes of workers and consumers.

“The Government claims that it is overseeing a ‘renaissance’ in British shipbuilding. But Scottish employers have pushed through one set of redundancies after another in recent years.

“Our proposal would both sustain existing shipbuilding and supply chain jobs, and create new ones -  right here in Scotland and also across the UK.”

Ends

Notes to editors

• ·         Royal Navy ships are built in domestic shipyards. Article 346 of the Lisbon Treaty allows for almost unlimited freedom of action over defence procurement under EU law.
• ·         The same Article applies to the ships of the Royal Fleet Auxiliary, which provide operational and logistical support to the Royal Navy. Only government decisions are stopping the production of the three new ships in domestic shipyards.
• ·         International competitor shipbuilders receive state subsidies, such as Chinese shipbuilders who were subsidised by an estimated 13-20% between 2012 and 2013 or Daewoo, who recently completed building four British tide class tankers and benefitted from a bailout of £2 billion in 2017 from the South Korean government.
• ·         The GMB trade union estimates the total shipbuilding workforce are paid £1 billion annually, £238 million of which is returned to the Exchequer in taxes.  
• ·         Given the scale of the Royal Fleet Auxiliary order, it is unlikely that a successful UK bid would result in the work being assigned to one yard, or even a single employer with multiple yards. The most likely outcome may be a modular, or block, build with the work being shared between yards in England and Scotland, with final assembly at Rosyth . 

• ·         Employment in Scottish shipbuilding has fallen from 32,000 jobs in 1981 to 6,700 in 2016.

• ·         The Upper Clyde yards do not have excessive capacity due to the Type 26 order and it is unlikely that substantial work from FSS order would be conducted at Upper Clyde yards.

• ·         Redundancies in Scottish shipbuilding:

o   In November 2017, Babcock announced that 250 jobs would be lost at Rosyth as the carrier programme ended; in March 2018, Babcock announced that a further 150 workers would be made redundant; in October 2013, BAE Systems said that it intended to make 835 workers redundant ‘across Filton [in England], Glasgow and Rosyth, progressively through to 2016. BAE Systems also cancelled plans to build a £200 million ‘frigate factory’ at Scotstoun. This followed the Government’s downgrading of its planned Type 26 order (from 13 ships to 8).