Select Committee on Defence Minutes of Evidence

Examination of Witnesses (Questions 140-159)


23 JANUARY 2007

  Q140  Chairman: Are you saying that there is a surplus of skills available at the moment?

  Professor Garwin: The contractors will reduce the number of people working from 750 to 250 rather arbitrarily and the market accommodates that. We have the same problem in our aircraft industry and they argued, in the supersonic transport programme, that they needed the SST programme in order to maintain the skills. Ten years later, Boeing thanked me for helping to kill that programme because it let them concentrate on the subsonic aircraft which was a much bigger, commercial market and the UK/French Concorde did not result in an airplane of which the United States would have to buy 500 in order to compete, but only 16 were ever manufactured. The market actually does respond. The skills do not vanish and they can be archived. There was the same problem with the Clinch River breeder reactor when Westinghouse was arguing that, if we did not build that, our nuclear plant skills would vanish. Well, they are transferred to the French and then they are transferred back when necessary and the United States and Britain can do more sharing of submarine manufacturing and technology than has been the case. If we can share nuclear weapons, technology and secrets, we can do a little bit more in the submarine area too.

  Q141  Mr Hamilton: Does any panel member disagree with that?

  Dr Willett: Interestingly, there are not issues or theories which are black and white in this and there can be differences of opinion. It is a simple issue really in that you can only really have a longer life for submarines if they are designed and built with a longer life in mind and perhaps I may explain some reasons for that. In principle, the US Ohio class are designed and built with a longer life in mind. Arguably, there is nothing technically impossible about doing this, but the risks and the costs do increase considerably while the availability actually declines and so delivery, so in the end you get very little return in terms of life extension. The risks and the costs in particular grow sharply towards the end of the life and through the extended life cycle in particular. First, there is the need for the increasing re-evaluation of the pressure hull, the reactor and the diving systems as the boat moves beyond the period that is covered by the safety case. Extending the life might require, for example, a new reactor because, if you are looking to extend the life significantly the current reactors only have 25 years of certified life. Also, the refit process for putting in new reactors is quite significant, so, if we are talking of two to three years to put in a new reactor in order to extend the service life for five to ten years, it is not really delivering you a huge amount of value in terms of time. There are also challenges for replacing combat systems on board, key components to do with the basic survivability of the submarine, and again all these systems have a specified design life, so there are very significant challenges there. Secondly, there are challenges in maintaining the supply chain. Submarine components are very bespoke and it is increasingly difficult to source parts and to order spare parts for a system that was designed 25 or even more years ago. Arguably, supply chain costs do effectively spiral as the submarine moves beyond its design life. Thirdly, in the UK one can argue that safety standard requirements actually are becoming more onerous, so the emphasis is on the Navy and the MoD to prove to an ever-increasing degree the safety of the submarine. Finally and arguably, an older boat loses capability and increases risk with important things like signature, for example, for the submarine. It is like an old car and it will become clankier and it will cost you more and more money to make it as quiet as it was before. Now, the US system is somewhat different because their system for certifying the safety of the submarine is different from ours. It is rules based and they have to show compliance with rules as opposed to meeting safety standards. They have more regular maintenance of their boats because they have more of them, so their boats are running through a more regular maintenance cycle than ours are, so the effects of the ageing are reduced and, as I said previously, the US boats are designed for a longer life. I would not obviously dare to try to disagree with someone of Professor Garwin's eminence, but that is my understanding. I think the MoD have looked very closely at all of this and their view would be that it can be done, but it is very, very expensive and very, very risky. There are others that argue that extending the life of a current boat, even only for a limited period, may cost as much as half the price of building a new boat, so it does not exactly deliver value for money. However, what is increasingly evident, as has been seen in previous classes of British submarine, is that the risks and the uncertainty in doing this increase exponentially and it is very, very hard to plan for these eventualities. Yes, I would agree with Professor Garwin that you can do more to co-operate and perhaps there are lessons to learn from both sides, but there is experience from recent cases. In the Astute class, for example, it has been well documented that the gap between building Vanguard and Astute was responsible for the draining of industrial skills and one only has to look at local newspapers in Barrow to see the submarine builders from Australia actually recruiting in Barrow to try and grab our expertise, to add weight to the argument that these skills can vanish.

  Q142  Linda Gilroy: Dr Willett has to some degree answered the question I was going to ask, but I can perhaps put it a different way. It was about the cost of extending life and how that related to the cost of renewing them, and I think I heard him say that the price of extending could be in the region of half as much as buying a new vessel so that it could in fact be cheaper to build over the long term. Also, perhaps I can ask both Professor Garwin and Dr Willett the extent to which in the new methods of procurement, procuring capability over a period of time, the point you were making, Professor Garwin, we need to know the cost, but the fact that our Government procures capability for a price with gain share built into it, why would we need to know the cost if the company could be held to that?

  Professor Garwin: It is very hard to hold the company to a fixed cost when they are building a unique system which is vital to the nation. There is just no money to squeeze out of those companies, so the fact is that you will pay the actual cost of production. You will get the skills and, if they have gone to Australia, you can get them back because you will hire them on the market, so the three-year reactor replacement time, if that is required, comes with a major overhaul. A submarine is a big ship and you can replace the reactor while you are doing all kinds of other things there too. What really needs to be done is to have these component costs shown. You cannot, in my opinion, go blindly and ask for a fixed price and hold the company to it, and I think experience shows that problem with the Astute class.

  Q143  Willie Rennie: We have already heard this morning that the American submarines last longer. Would there be a value in trying to rejig our programme to make sure that the next set of submarines ties in with their construction design needs to make sure we get the best value for money out of any new submarines?

  Professor Garwin: I missed the question. Are you asking whether American expertise could be brought in to set a basis for the costs?

  Q144  Willie Rennie: Would there be a value in us rejigging our procurement procedure to tie in with the American construction of their new submarines?

  Professor Garwin: Well, it is an option and these options, in my opinion, should all be laid out with the costs so that the Government will know better what decision to make and Parliament can do its job in the bargain. I am not saying that it is absolutely sure that life extension is (a) possible and (b) cheaper, but I think it highly likely, especially since the tempo of operations has been reduced beyond the initial plan for the UK submarines. As for design life, I think there is a minimum life of 25 years, but it is not designed to fail after 25 years. It is not like an incandescent lightbulb which has a 1,000-hour life at a specified voltage because, if you make it brighter for a given wattage, it has a shorter life, so that is the optimum that people have found. Here, you are quite uncertain. You say, "I am sure that it will run for 25 years and I give my guarantee", but only in service and, as it comes to the end of that, we know what the numbers actually are. There, we need to know the cost of the retrofit, if a steam generator needs to be replaced and, as for the signature, that is something that is the sound that the submarine puts into the water and something I know very well. It is thoroughly monitored, it can be fixed with varying frequency or whatever, it can be managed, and additional quieting can be introduced into the submarines in service as well as in a new generation of submarine, but let us not forget that the job here is to put nuclear weapons at sea in a deliverable fashion. Things can be done with smaller systems, the guidance systems are much smaller, the testing programme would be cheaper and that would be an innovation well worth pricing out to see whether that is what you want to do.

  Q145  Mr Holloway: Professor, there are comments made that the safety standards were somewhat different in the UK as compared to the United States. Do you have any comment on that?

  Professor Garwin: No. I know a good deal about the civil reactors in the United States and I know that our nuclear Navy prides itself on the safety of its operations. We do not have a civil regulation, as I understand it, of our nuclear plants in ships or submarines, but we do have the equivalent, so before someone says that the UK submarines are safer from the point of view of nuclear accidents than US submarines, I would have to see it laid out side by side, but I do not know.

  Q146  Chairman: Dr Willett, I wonder if you could expand on your point that safety regulations in this country in nuclear terms are getting more and more stringent. Extending the life of a submarine would presumably cause some degree of problems for that process, but why are safety regulations in this country becoming more and more stringent? Is that a matter of simple choice? What drives it?

  Dr Willett: Well, in fact and in truth, that is an opinion that I have picked up from some interview material which we have been conducting for our research paper, so I can perhaps come back to you with clarity on that, if I may.

  Q147  Chairman: Please do.

  Dr Willett: With regard to the comments that Professor Garwin raised about the safety case issue and to respond to Mr Holloway's point, if I may, from my understanding, the UK has an external procedure for verifying the safety cases of the submarines, whereas the US Navy does it more internally. In the US, the US Navy has a set of rules and regulations that it needs to show compliance with, whereas here there is actually a safety standard that the Royal Navy has to meet. The US measures its safety internally, whereas the Royal Navy does not have that luxury.

  Q148  Mr Hamilton: By that, you are meaning that the regulatory authorities within the UK would find it difficult to argue to support a system or for a design to continue?

  Dr Willett: The submarines are designed, and built, with a 25-year life and all those who appear to be involved in the game at the moment appear to find it very, very difficult to find a justification for extending the life any further than that. I am not saying that the British submarines are safer than American submarines or the other way round, it is just that the procedures for verifying that process are very, very different and not necessarily comparable.

  Q149  Chairman: Mr Ingram, on this issue of skill, in your paper which I found very helpful, the basic paper, you said, "Exaggerated warnings of catastrophe from any delays should not frighten the Government into a hasty decision". Are you saying that the warnings of catastrophe about losing skills, which certainly we have been given, we have been told that these skills are at a critical level, are you saying that these warnings are exaggerated and, if so, on what evidence do you base that assertion?

  Mr Ingram: Essentially what I am saying is that, whilst it is costly to restart a nuclear submarine programme, we have already seen with Astute that it leads to delay and overcost. It is not impossible, for many of the reasons that Richard Garwin has already outlined to the Committee, that some of the more unique skills are transferable globally, that it is possible to retool, particularly when you are creating a new submarine from scratch and that it is not as black and white as has been hinted at by witnesses to this Committee before Christmas. I would also just reflect back to the Committee its own report as a result of the previous inquiry which stated quite clearly that industrial reasons should not be leading this particular decision because this decision is more important than the industrial reasons for replacing a submarine.

  Q150  Chairman: Yes, of course that is right. The industrial question of whether, if we delayed, we would then be capable of meeting our strategic defence needs is something that we would have to take into account.

  Mr Ingram: You certainly need to take it into account, but also the Committee need to consider the longer term, not simply the transfer from Astute to the Trident replacement. The Rand Report, which I refer to in my more recent evidence, suggests that it would actually be advantageous from an industrial perspective to delay the start of construction of the Trident replacement in order that there is not this enormous gap that has been the concern of the Committee in the previous inquiry between Astute and the Trident replacement construction. There would be an enormous gap between the replacement programme and the NUFC, the next generation of submarines to replace Astute, so, if we are not careful, if we rush into this decision now, we could well be facing exactly the same, or perhaps an even worse, industrial problem when it comes to that gap with the next replacement submarines.

  Q151  Chairman: Yes, as I understood it, because I read that report following your reference, the worry about that was the gap between the end of the strategic ballistic submarines and the NUFC programme.

  Mr Ingram: Yes.

  Q152  Chairman: That is, I think, not an issue that we should concern ourselves with at the moment. At the moment, we are worried about whether it is possible for British industry to create these submarines at all. I do not think that you have actually given me evidence to suggest that industry is wrong in saying that these skills, once they have left, would leave for good. When they tell us that, if they left, they would leave for good, can you give us any evidence to suggest they are wrong about that?

  Mr Ingram: I would say that, as with so much of the evidence that you are hearing today, there is actually a great deal of speculation involved. We have speculation that the cost of extending the life of the Trident submarines may be as much as half the cost of replacement. That is entire speculation. There is no reference in the White Paper to those costs. Similarly, if there were a delay in the replacement of Trident, there is the speculation that the submarine base would be impossible to restart. I would say that the burden of evidence is on industry to demonstrate that because we have already seen quite a significant gap between the completion of the Trident construction programme and the start of the Astute programme and, as I say, that came at a cost and at certain delay, but it was not impossible. With a similar gap, one could quite genuinely assume that it would be costly and it would take longer, but it would be far from impossible to reconstruct the submarine base with a relatively short gap of five or ten years because many of the unique skills could be brought in from outside and there could be retooling at a cost.

  Q153  Linda Gilroy: From where do you get the skills that build a ballistic submarine? There are only three countries in the world that do that at the moment. Are we going to go to the Russians or are we going to allow our skills base to go to the Russians? We have talked about the Americans, but I think there is also the debate to be had about our independent deterrent.

  Mr Ingram: Well, our deterrent is not independent when it comes to procurement and we already entirely rely upon the Americans for the delivery of the missiles. There is no reason at all why we should not co-operate more with the Americans when it comes to the construction of the submarines, as Professor Garwin has already hinted. There are also the French with whom we are collaborating over the construction of the carriers. These are concerns that could easily have been more widely considered in the White Paper, but, because of the rush into publication and the rush that this Committee and Parliament are having to comply with in order to make the decision very quickly, we are not having that sort of information and consideration over the options, which is why there is a very major advantage to delaying this decision beyond March.

  Dr Willett: Arguably, the crunch of the decision only really comes, as I said previously, within the next decade when we have to start cutting metals, so there is plenty of time to talk about this between now and then. The Astute case proves that there are skill losses and cost overruns if you delay these kinds of decisions. Now, as Paul rightly said, yes, there are cost issues, but cost is one of the major things. Yes, we can delay the decision, but it will cost more. Now, are you prepared to delay this decision and pay for the implications of doing that? In terms of the independence of procurement, yes, of course we have to buy our system from somewhere. What we do have, through our co-operation with the Americans, is the best system that money can buy for affordable cost. There are options for closer co-operation on submarine design, reactor design, submarine build and reactor build, but there will be some political obstacles to that and tensions with the US about what they can and cannot share, in terms of the technology, with us. The options for increasing co-operation, I would argue, yes, would help the potential to reduce costs, but, in terms of tying ourselves into the American time-lines, the time-line gap actually is not as bad as people think it is. The number that people refer to from the American point of view is 2042 when the last American boat comes out of service, but in fact their first new boat will be ready to go into the water in about 2029 and ours we will be looking to go into the water in the mid-2020s, so the time-line is not that different and perhaps, therefore, there is some scope for looking to bring the time-lines more into line.

  Dr Stocker: I was just going to comment on our lessons from the Astute programme. The lesson to be drawn surely is not that it is possible to recover from a mistake, but it is better not to make the mistake in the first place and why repeat it.

  Q154  Mr Holloway: It seems to me that Professor Garwin and Mr Ingram are suggesting that industry is being rather self-serving in this. Is that fair?

  Professor Garwin: Yes, though that is the purpose of industry, to make money for the stockholders. In fact there is an incompatibility with a 45-year life and building a ship every 22 months. Under those circumstances, you would have to have about 25 submarines in service and the UK does not have the need for 25 submarines and cannot afford to operate 25 submarines. Therefore, the life is set at 25 years. That is the industry decision to make a new ship every 22 months and the Government goes along with it. The White Paper discusses the operational independence, it does not claim that the submarine strategic nuclear policy is totally independent obviously because these are Trident D5 missiles and the maintenance of the missiles is done in the United States, and it takes more maintenance on a missile than on a submarine, but I think it would be perfectly reasonable for the UK and the United States to pool their manufacture of submarines. Once you buy a submarine, then it is yours for 30 or 40 years and you can do the major refits and add the reactors. After all, the United States aircraft, many of them use Rolls-Royce engines and there is no reason why the Admiralty cannot operate US-built submarines. Now, they have to fit the missiles of course, so there are a lot of interface questions and in this case fortunately the D5 is used by both. I would like to see small, single warheads, intercontinental-range, modern missiles developed perhaps jointly with a much smaller submarine. We have the same problem that you do; we have these submarines at sea with enormous excess capacity. Eventually, we should have a smaller submarine for the same number of warheads that we decide to have.

  Q155  Mr Holloway: Does Mr Ingram think that British industry with international shareholders today are bouncing the Government into an early decision?

  Mr Ingram: Well, at the very least, as was hinted by Lee Willett just now, there is the possibility of us simply making a decision in March, not to go the whole decision, but simply to investigate the options further and to make a final decision at maingate in 2010-11. That is an option that has not been put before us in the White Paper, but would be more consistent with the procurement of other military systems. That, at the very least, would give us much more time for Parliament and for the public to engage in the discussion and the debate over where our future lies and we will be that much closer to the point of deployment of a new system. Now, there are all sorts of advantages, which we have not gone into in this Committee, which indeed the White Paper has not gone into, of deferring this decision even for four or five years, not least the possibility of us actually putting a serious proposal into the international community for greater disarmament in the lead-up to 2010. Therefore, to answer your question specifically on industry, I do believe industry are bouncing this Government into making a decision now and committing on this in order that they can have the security of production far, far earlier than they would need to necessarily.

  Q156  Mr Holloway: Chairman, Dr Stocker is frowning at some of this.

  Dr Stocker: Yes, I specifically wanted to comment on the idea that the UK and the US could pool the production of submarines. The practical effect of that would be that we would buy them from the Americans because the Americans are not going to be buying nuclear submarines from us. That argument is going the other way, I think.

  Q157  Chairman: And you would find that objectionable?

  Dr Stocker: Not necessarily. If we decided, as part of the industrial strategy, that we no longer wanted to build nuclear-powered submarines in the UK and that we wanted to buy not just the missiles, but also the submarines from the United States, that might be a decision we could take, but I do not see the UK at this stage being prepared to surrender that amount of its defence industrial base to another country, no matter how friendly it was.

  Q158  Willie Rennie: You would not necessarily have to get the Americans to do the construction and at least, if you co-operated on the design, there should be other benefits there.

  Dr Stocker: That is another issue and indeed, although it is not in the White Paper, it is in the exchange of letters between the President and the Prime Minister, the intention to collaborate further on future submarine platforms, which would indicate that the Government are intending to do just that and there would be clear mutual advantage in doing so.

  Q159  Mr Jenkin: Professor Garwin and Mr Ingram, what perverse and misplaced motive does the Government apparently have to avoid even considering these options in the White Paper? What do you ascribe that to?

  Professor Garwin: I am a physicist, not a psychologist!

  Mr Ingram: There is pressure from industry, as has already been stated, so that is one. There are potential political legacies of particular individuals which I would not want to go into because that is more the political thing which you might have more to say about than I would.

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