Examination of Witnesses (Questions 440
WEDNESDAY 8 MAY 2002
WALMSLEY KCB, AIR
KCB, AFC AND MR
440. Can I thank you for giving me the opportunity
and apologise that I was unfortunate enough to miss the evidence
from Sir Robert Walmsley and Mr Coles two weeks ago due to an
urgent meeting with the Minister for Energy over the closure of
Scotland's only deep coal mine which is in my constituency along
with Rosyth Dockyard, so I declare an interest that I have always
taken a keen interest in issues affecting the dockyards and naval
bases' future. I understand that at the Committee hearing on 25
April Mr Coles stated that the view was you only needed three
naval bases and just one dockyard to accommodate the current warship
refit workload, or two dockyard in order to maintain competition.
Given your comments earlier about over-capacity, if with falling
demand for naval refit work there is insufficient room in the
market for all three current dockyards would you like to say if
you have a view on which should close or is it something that
you will allow the market to sort out?
(Lord Bach) My short answer to that is the market
will sort it out but I want to make the point that our view is
that Rosyth, the one to which you particularly referred, has built
up an extraordinarily high reputation for major refitsand
I am looking to Mr Coles , in the last few years.
(Mr Coles) That is right.
(Lord Bach) It may well be, I know not, that none
of them will close.
441. Do you think leaving it to competition
is sufficient given the strategic interests represented by the
dockyards and naval bases?
(Lord Bach) I think the market will have a say in
this, but there is also a hold that we still have on the strategic
importance of these various dockyards spread as they are around
the United Kingdom. I will let Mr Coles answer.
(Mr Coles) What I think I said to the Committee was
that we could do it in one or we could do it in five but we have
three naval bases. When pressed I said of course for competition
you need at least two. In the time-frame we are talking about
now there is enough work for all four sitessites not dockyardsCarport,
Faslane, Rosyth, Portsmouth and Devonport. In the medium term
there is work for all four sites. Secondly, of course, they can
supplement the work they get from the Ministry of Defence by competition
through bringing work in themselves. That has been done very constructively
at Portsmouth, at Devonport and at Rosyth. In the end it is a
combination of how much work is available from us and how much
they can bring in from repair and indeed in some cases in construction,
so in the end it must be the market forces that determine it but
in the short term there is enough work around to fill all four
sites with some work from the private sector.
442. Can I then go on to ask Mr Coles this:
I believe you also said that the major savings from the Warship
Support Modernisation Initiative were expected to arise in Scotland.
We have Faslane on the West Coast and Rosyth on the East Coast.
Given they are on two different sides of the country, how do you
think those savings can be achieved and given the changes and
the savings that I would argue have certainly been achieved already
at the dockyard, are most of the savings seen to be coming in
the future from Faslane?
(Mr Coles) The whole Warship Modernisation Initiative
is quite a large package. Half the savings come from traditional
ship repair and the other half from restructuring and partnering
within the naval bases. For the naval base element the largest
element of that is the proposed partnering on the Clyde and therefore
it does not affect the site specifically.
443. The trade unions are now settling down
after the decision and the reduction in threat of action. They
are clearly not happy but they are accepting the sensible way
it is going. Have you been able to debrief them on the rationale
behind the choice of the Warship Support Modernisation Initiative
and what has been their reaction to it?
(Lord Bach) The debrief takes place tomorrow. That
is not coincidental, if I may say so, which our appearance today.
You know obviously about the joint statement of intent the company
signed along with the MoD on this issue was described, as you
have implied, by one of the unions as a breakthrough. So the full
debrief will take place tomorrow and we will see what the reaction
is. We think that this joint statement of intent and the wording
that is used in it is of great significance. I do not think that
is something that has escaped the attention of the, how shall
I put it, very acute leaders of the trade unions involved in this
444. Will you keep us informed so that we can
judge the reaction of the reaction to the reaction?
(Lord Bach) Yes.
445. If you can work that out, we would like
to be kept informed.
(Lord Bach) Certainly.
Chairman: Thank you, gentlemen, so very much.
Obviously, Minister, you enjoyed your occasional spat which maybe
you were not permitted to do. I am sure we will give you future
opportunities to flex your muscles. Certainly, as Mr Howarth is
able to bring the experience of a front bench spokesman to our
proceedings, maybe a rota could be devised amongst MoD Ministers
that Ministers should be allowed to join the Committee too and
maybe if the constitutional arguments can be overcome you might
serve a counter balance to the Tory front bench. Lastly a tradition
that has been growing up in this Committee is before you are allowed
to leave you must leave your briefing book behind so that we are
able to have the full flavour of your presentation even though
time prevented us from exploring all the arguments. Thank you
all very much. We shall meet again.