Select Committee on Work and Pensions Minutes of Evidence

Supplementary memorandum submitted by the Ministry of Defence (SHP 8B)

  At the session of the Scottish Affairs Committee on 19 June which I attended, John Robertson expressed a concern that Swan Hunter (Tyneside) Ltd were preparing to sub-contract further work on ALSL hull fabrication, in addition to the bow sections already sub-contracted to Centraalstaal. I undertook to find out what the position is and I appreciate this opportunity to report back to you.

  Swan Hunter is currently reviewing the ALSL programme in light of how best to recover a current slippage of two-three months and in order to benefit from their learning and experience over the past nine months of fabrication. This review is being conducted in full consultation with BAES Marine (who are building ships 3 and 4) and entails a rescheduling of the programme for the first ALSL (01), which is being built by Swan Hunter.

  I can confirm that Swan Hunter has no plans to subcontract any further units to BAES Marine at Govan or elsewhere. Informal enquiries have led Swan Hunter to conclude that such a proposal would not be cost effective in any event. I should stress that there was never any question of the sections being offered overseas.

  The contract we have with Swan Hunter requires them to construct the ships on their premises, except as may otherwise be agreed with the MOD. Should Swan Hunter propose for work to be carried out elsewhere, it would be subject to our requirement that no fabrication or assembly of structural components may be sub-contracted outside the UK. If Swan Hunter choose to sub-contract elements of steelwork to other UK shipyards it would be in keeping with this requirement and subject to the MOD being satisfied that the contractor concerned is capable of undertaking the work.

  I hope that this explains the situation. I am copying this letter to Brian Wilson and Anne McGuire.

Lord Bach

Minister for Defence Procurement

25 June 2002

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