Examination of Witnesses (Questions 1-19)|
7 NOVEMBER 2006
Q1 Chairman: Good morning to everybody
and welcome to our three witnesses for the first part of this
morning's session. I wonder if you might like to introduce yourselves,
first of all starting, Murray, with you, and then moving along
the line, to tell us who you are, what you do and why you do it.
Mr Easton: Chairman, why I do
it? Good morning, Chairman, ladies and gentlemen. My name is Murray
Easton, I am the Managing Director of BAE Systems Submarines,
the main part of which is based in Barrow-in-Furness. Our responsibility
is the design and construction of the Astute-class submarines
Mr Ludlam: Good morning. My name
is Steve Ludlam, I am the Managing Director of the Rolls-Royce
Submarines business and our responsibility is to design, manufacture
and support in service all the Nuclear Steam Raising Plant.
Mr Whitehouse: Good morning. I
am Peter Whitehouse, I am DML Devonport's Development Director,
and we are the site that refuels and refits the SSBNs and SSNs.
Q2 Chairman: Thank you very much. I will
start with a question which seems as though it covers the whole
of this inquiry, which is about the skills base that is needed
for the strategic nuclear deterrent, but in fact it is quite limited.
I wonder if I could start with you, Murray Easton, and possibly
Peter Whitehouse, to ask: what are the specialist skills that
are required to maintain a minimum submarine design, construction
and refitting capability in the United Kingdom, please. Specialist
Mr Easton: First of all, Chairman,
if I could talk to the design and construction end, and I will
let Peter, if you do not mind, speak to the refitting and support
end of life. As far as the submarine is concerned, a nuclear submarine
is without doubt, as yourself and the Committee, Chairman, saw
very recently when you visited Barrow, an exceptionally complex
product, both in its design and construction to, really, the highest
standards of manufacture. As a result, there are very specialist
skills required. If you look at the design end of life, both the
computer graphic skills that we need in our professional engineers,
our designers and in our draughtsmen, are key. We design to very
tight tolerances and very complex systems, and in systems engineering
there is the integration of, for example, structural hydrodynamics,
noise and vibration, life support, safetyboth boat safety
and nuclear safetyand a number of other key skills. If
we then move on to the construction, both in terms of the staffwhich
I think is often understated, that being the planners, the safety
technicians, the quality control people and the supervision of
a very skilled workforce in terms of manual skills, both at the
structural end through electrical, mechanical and the integration
of those systemsand then the commissioning of them in this
very complex task means that when you look at the minimum number
that we would require, I think that was your question, back in
the early-90s we had some 14,000 people at Barrow-in-Furness,
supplemented by some 2,000 subcontractors and we now have 3,450
plus 200 contractors. A lot more is required of our people now,
such are the issues of affordability and our response to that
challenge, and I feel very much that we are at the critical mass
just now in the design, build and commissioning end of the enterprise
that we actually need. So below this I think we would be in a
very perilous state.
Q3 Chairman: Bear in mind it is the
skills I am talking about rather than the number of people.
Mr Easton: Yes. The skills themselves
are very submarine-specific skills. It is often said that submarine
designers can design surface ships but surface ship people cannot
design submarines, and that is not a reflection on either, simply
to say that one is much more complex. So the skills are very specific;
the standards that are required for the design and ultimate operation
of the submarine are such that they do not exist anywhere else,
and in order even to supplement the nuclear skills we do transfer
small numbers of people between our colleagues in Rolls-Royce,
in DML and Barrow. So you will find that there are already some
shortages, and we cover them by that level of co-operation.
Mr Whitehouse: I could repeat
a lot of what Murray has said in terms of the specialist skills
in the nuclear area, systems integration, commissioning skills
and things like that. In addition, so far as Devonport is concerned,
we work on the submarine in configurations that are totally different
from when it is operating. Refitting and refuelling the submarine
means that we have to address things like safety case issues that
are very specific to the things that we do and the configuration
of the submarine when the reactor is opened up and we are refuelling,
for instance. So there is a very big emphasis, in our business,
on an additional area which is on the facilities, their safety
justification and the safety justification of the boat as part
of a system that comprises the dock and all of the support infrastructure.
That is probably the biggest area that is additional to what Murray
describes. We are probably slightly lighter in the front end detailed
design area because we are actually working on a product that
exists and is there in our facility, but I think the additional
areas I would highlight are things like the environmental discharge
consents, the environmental assessmentsall those additional
adjuncts that actually come into play because of what we do to
the submarine during the refuelling operation, in particular.
Q4 Chairman: Would you agree with
Murray Easton's suggestion that a surface ship designer would
be less able to design a submarine? Would you put that into the
refitting context as well?
Mr Whitehouse: So far as the nuclear
specialisms, some of the system specialisms, are concerned, I
would agree with that. When we look at the industrial labour force
in Devonport, we have had to, and we are continuing to, move large
numbers of people between the two types of work stream. So, so
far as the industrial labour force is concerned, we do actually
have quite a bit of mobility between the nuclear and non-nuclear
Q5 Chairman: What about the design
and construction of a Nuclear Steam Raising Plant? What specialist
skills are needed for that?
Mr Ludlam: If I take the two different
sets of skills, one on the design side, the design-specific skills
there are ones of nuclear engineering which is essentially a multidisciplinary
engineering approach, and it is a very vital skill to bring all
the disciplines of engineering together and make sure that we
design and develop a very safe plant operation. I would endorse
what Peter said about the safety justification skills that are
absolutely vital to be sure that we are safe at all points in
time with the operation of the plant. So they are the essential
skills in the design side of Nuclear Steam Raising Plant. The
essential skills on the manufacturing side are particular to core
manufacture, which is very unique to what we do here in the UK,
and are also particular to heavy pressure vessel manufacture since
we now have only one pressure vessel manufacturing capability
in the UK to undertake this size of pressure vessel for nuclear
submarines, and they are very specialist manufacturing skills,
not ones which are easily acquired or easily trained.
Q6 Chairman: Of these skills that
you have talked about, which are the most vulnerable to loss and
which would be the hardest to replace?
Mr Easton: That is an exceptionally
difficult question to answer because we, quite frankly, do not
value one more than the other. The interaction of all the skills
on the site, whichever of the three sites we were looking at,
would be crucial. To have, on the one hand, world-class welders
(and I mean absolutely world-class structural welders or pipe
welders), I could not compare them as more or less critical to
the designers, for example, or the commissioning engineers. If
they move away you are vulnerable to any of those parts of your
business being reduced.
Mr Ludlam: I would endorse what
Murray is saying; it is that multidisciplinary nature that is
necessary to bring the total submarine together and keeping those
specific skills within that multidisciplinary area that is absolutely
Mr Easton: If I may, Chairman,
often in the public domain there is a view that a welder is a
welder is a welder, as an electrician, but it is so specialist
in this particular product that it is not just a matter of their
training it is a matter of their experience as well, and it is
vast, quite frankly, in any of the three facets of the business
that you are interviewing today.
Q7 Mr Jenkins: If I could ask questions
on the Nuclear Steam Raising Plant, what is the difference between
the commercial nuclear power station and their steam raising plant
with all their engineering skills to the submarine environment?
Why are they not interchangeable and why are you still going back
through the record of how much skill and experience we need? We
need that across the commercial world as well as in the military
world. What is so different? What is this specialist skill? What
is unique about building a Nuclear Steam Raising Plant for a submarine?
Mr Ludlam: At a basic level the
skills are the same; the uniqueness of a Nuclear Steam Raising
Plant for a submarine is its sizeits compactness. That
is the first point I would make. We need to fit a very powerful
reactor into a very small space, which is quite different to the
civil world, and the materials therefore are likely to be different
on a submarine reactor; the size and shape of things are quite
different and the tolerances we are working to as a consequence
are quite different, in that respect. If we look more specifically
at some of the more detailed parts of the reactorlet us
take the reactor corethat is quite different, out of necessity,
for the way that we operate a submarine plant compared to the
way that we would operate a civil nuclear plant. A submarine plant
is moving up and down in speed all the time and the reactor, essentially,
follows that movement up and down in speed and therefore has to
be controlled in a particular way. A civil reactor sits at power,
at a constant power, and the control systems are quite different
as a consequence of that. I think there are some quite marked
differences, but at the basic level there are some similarities
Q8 Mr Crausby: I would like to ask
some questions specifically on the submarine design base, and
these questions are aimed at all three witnesses. I have heard
a great deal over the years, really, particularly about the loss
of the design base for the production of submarines at Barrow.
The question I would like to ask is: what do we do about it, then?
We go on and on and talk at great length about what a great problem
it is, so how could a minimum design base be sustained and what
kind of work would it need to be involved in?
Mr Easton: May I start? If you
look over time, over certainly the last 20, 25 years, it is quite
apparent, although I am relatively new to Barrow-in-Furnessonly
three-and-a-half years therethat the design and build of
nuclear submarines has been supplemented by the design and build
of very large first-of-class surface warships, and some of them
very complex surface warships. That rather builds on the response
I made earlier about the capability of designers but it has also
assisted in smoothing the peaks and troughs, if you like, of the
design demand, resource demand, over time. So what can we do to
retain them? We routinely recruit significant numbers of apprentices.
We are now up over, at the last count, 114 apprentices this year,
and that is excluding 12 accelerated and four adult apprentices
with a further 28 graduates. So we are trying to bring new blood
in, and they love coming to us because it is a very challenging
work environment; it is on the leading edge of technology. So
we are supplementing and we have a lot of people who stay with
us a long time because they are skilled. How do we retain them?
I have to say by ensuring that there is continuity of work in
a place, clearly.
Q9 Mr Crausby: Lots of people would
say that there is no future in this business. I was brought up
in Lancashire and that is what people said about cotton when I
was very young, and they were right, were they not? Is that an
issuewhere people say: "There is no long-term future
in submarine design, so I ought to do something else"?
Mr Easton: If I were to make the
analogy you just have, there are other places in the world to
get cotton but as far as nuclear submarines are concerned, first
of all there are very few places that build them and build them
to the cost that we do. I think we have a very favourable comparison
to at least two other builders, being France and America, so whilst
they are expensive products, they appear comparatively to be good
value for money. What else can we do? Where can we get them? The
policy is that we cannot export our nuclear submarines currently,
and for understandable and obvious reasons, so we have the home
market and that we must satisfy.
Mr Ludlam: If I can just add to
Murray's point, I think all of us find when we bring either youngsters
in or somebody in their first or second change of career they
are very excited by the work that they are given. It is a challenge
for engineers, they thoroughly enjoy it and I think they would
then welcome the future of a long-term programme and the future
of a long-term programme actually would then spur on that innovation
that they bring. Engineers do enjoy the challenge, and submarines
certainly give that challenge.
Mr Whitehouse: One of the key
issues going forward is that to actually be able to attract young
people into this particular industrial segment it is going to
be very important that, as the civil programme potentially starts
up again, they can see and believe that there is a vibrant and
relatively sustainable and stable programme going forward, whatever
its size, rather than one that, if you like, is turned on and
off depending on the exact circumstances of the day. I think this
tension that will probably start to arise with the NDA (Nuclear
Decommissioning Authority) work with the civil programme and the
military nuclear sector is actually going to make that aspect
of being able to look forward and see a forward submarine programme
much more important perhaps than heretofore.
Q10 Mr Crausby: Murray's point that
you can still get cotton in other parts of the world is the core
of it, really, is it not? We cannot leave this to market forces.
We can still get cotton but if we let this go then we will not
be able to buy nuclear submarines. So does the Government have
a role in ensuring that this is in some way supported, to ensure
that we maintain a minimum base? The question I would like to
ask is about what that cost would be and the size of that. In
personnel terms, for instance, how large would a minimum design
base need to be and to what extent should the Government prop
that up and pay for it?
Mr Easton: I never believe that
the Government alone has the responsibility; industry also has
and we have our part to play. Affordability is a huge issue that
is very prominent just now, and I like to think that within industry
we are making a very serious and significant response to that.
If you look at what should the Government do, as has been mentioned
by Peter Whitehouse, continuity of work is all for not only us
as the designers and builders but, also, for the entire supply
chain who depend on us. If we do have fluctuations people will
leave us for very challenging work elsewhere. They want to work
in the submarine business and we have to ensure that even if there
is a further delay, or any delay, in the submarine ordering programme
it will have a significant and, I think, very catastrophic impact
on our ability to design and build and, therefore, for this country
to have its own nuclear submarine design and construction.
Q11 Mr Crausby: I know it is a difficult
question but I am asking the question how many and how much, really,
as to what the size of the design base should be; what are the
minimum numbers of people and how much would that cost the industry
without the support of orders?
Mr Ludlam: I do not think it is
easy to give a size but some of the points that we each consider
as we look to invest in each of our businessesand I will
separate manufacturing again from designon the design side,
to preserve the level of skill that we need we think a eight-year
design refresh is quite important; so every eight years it would
be quite interesting to retain the skills to do a new design.
Certainly when we have looked forward in Rolls-Royce, we have
anticipated that a two-year, 22-month, or something of that order,
manufacturing drumbeat would be the sort of size that we could
work to. So if the Government were to help, a long-term programme
based around those sorts of parameters would be quite useful to
us, to allow us then to take our part in industry and say: "With
that as a horizon we can now size (?) the businesses accordingly",
and at that point I think we could give a much more reliable estimate
of what would be necessary to keep the skill base and actually
keep quality manufacture, because quality manufacture is the important
Q12 Mr Crausby: We went 16 years
between Vanguard and Astute. Are you saying that is too long?
Is that really what caused the problems of Astute?
Mr Easton: We have undoubtedly
haemorrhaged skills and experience during that gap that you are
talking about. We currently stand at 150 designers or professional
engineers, the design end, and some 300 draughtsmen in support
of them taking that three-dimensional information and making two-dimensional
information for production. They are absolutely critical to us,
and that is the core that certainly in Barrow we must maintain.
We can supplement that; we can with computer graphics out-source,
but it has to be very selective because of the skills and the
understanding of the people that you require. So I completely
agree with you, it is fundamental that we sustain it. We have
fluctuations in the programme and these fluctuations naturally,
were there any delay, will be very significant to us.
Q13 John Smith: You referred to retaining
these skills and the role of Government almost exclusively in
terms of continuity of work and making sure the work is there.
Do you believe the Government could go any further? Currently,
we have the Defence Training Review; there is going to be a major
announcement shortly and if it goes according to plan there is
going to be the creation of a huge Tri-Service military school
of engineering. Could you envisage a role that Government, or
the MoD, could play in supplementing or assisting you in retaining
skills or providing skills for the future?
Mr Easton: I think you make an
exceptionally good point, and in fact we have been in dialogue
recently with the customer, the Ministry of Defence, because it
is imperative that we actually bring operating experience into
the design in order that the design is most cost effective, it
suits what the operator needs and, also, for through-life maintenance
because they maintain it through life at sea before it goes to
a place like DML for maintenance. We need that experience to be
integrated. For any future boat I consider it very, very important
that there is integration, and yes, they could supplement some
of the resources. The core resources that we have with the understanding
on what build techniques there are and what design capabilities
are needed is fundamental. However, you are quite right; it can
Q14 Mr Borrow: Mr Murray, you mentioned
the use of surface ship work to help with the peaks and troughs
of submarine work. I got the impression that you are working on
the basis that the surface ship work would supplement existing
submarine work. Would it be possible to retain and maintain the
skill base if there was a clear gap in submarine work and substitute
for that surface ship work, or would that not be possible?
Mr Easton: If I gave the impression
that surface ship work would supplement our current requirement
for submarines then that was erroneous, and I apologise. What
I meant to say was, effectively, where there are also gaps in
the programme. For example, the design of Astute is not complete
but, as your Committee saw when you visited, it patently exists
and we are in the final stages of commissioning a complex first-of-class.
Therefore, we have designers that will increasingly throughout
2007 finally become available. What do we do with them? If we
are to retain them there must be work. There is the possibility
naturally of surface ship work satisfying that what will be a
surplus at that timeit is not yet but it will be at that
time. Yes, it very definitely can compensate in those areas. The
only problem I foresee is that although that satisfies the demand
in engineering and the design and drawing end (if you, for example,
talk about the aircraft carrier that would satisfy that and we
have plans to become actively involved in that), in fact, though,
in production we are out of sync and the carrier does not fill
the hole that any delay in any of the submarine orders would generate.
In fact, it makes it worse because it supplements our demand for
submarinesthe point you madeand then the trough
is even deeper. So we really cannot, as an integrated business,
cope with a delay to the submarine programme.
Mr Ludlam: If I can make a slightly
separate point against the question (I think it probably applies
to each of us, but I will be very specific), let me take the pressure
vessel area. In Rolls-Royce we make pressure vessels; we made
them in the commercial business, then we made them in the nuclear
business for the civil plants and then we went back to the commercial
business. As the commercial business was getting more and more
competitive and we came back into the nuclear side, what we found
was that we had lost some of the skill necessary to build nuclear
plants, and we went through a fairly tough period of producing
lower quality than one would expect to see on Royal Navy submarines,
and it took us a long while before we got that right and then
could send things out of the factory. If we are not using the
skills in the right environment and in the right domain I think
they do erode; you have got to keep practising. It is a slightly
separate view, and we have probably all got specific areas like
that in each of our businesses that would see that same effect.
Q15 Mr Borrow: So the existence of
a short gap may not have a significant effect on skill levels,
but the longer the gap the greater the loss of skill
Mr Ludlam: The level of skill
begins to reduce.
Q16 Mr Borrow: Also, the greater
the likelihood that people with those skills would go elsewhere
because they wanted to build submarines rather than do something
Mr Easton: Or they wanted a high
technology challenge. Good engineers go for good engineering challenges.
Mr Whitehouse: It is also a very
important part of the affordability equation. Our business is
integrated, we have a nuclear and a non-nuclear maintenance workload
and an industrial workforce of 2,200-2,300 that we move between
the two. If we look at the submarine population going forward,
we are talking about 7 SSNs and 4 SSBNs. Statistically, that is
a very small number. So we will see going forward, on a three-year
rolling basis, an enormous variability in our nuclear load: peak
load to minimum load a factor of 4:1 on a three-year cycle. It
is essential to help with the affordability equation in the support
area; at the end of the day, 70% of the cost of one of these things
is in service and when it is being supported, not in build. It
is essential that we will have access to non-nuclear workload
to help cope with that extreme variability in the nuclear throughput,
otherwise the unit costs are extreme and the affordability problem
becomes perhaps unmanageable.
Q17 Mr Borrow: Can I pursue the issue
around the numbers involved in each of the specialist skill areas.
I think, Mr Murray, you mentioned that your existing staffing
level is about as low as you could see as being sustainable, but
you were not in a position to identify one particular area of
skill as more important than another. Would it be possible to
give details of the minimum numbers in each specialist area that
would be needed to sustain that skill base? Even if you have not
got it now, would it be possible to make those figures available?
Mr Easton: Indeed, I am perfectly
happy to support that and I commit to do that after the hearing.
We can be talking about single numbers of people with the skills:
four radiation physicists or half-a-dozen people with the structural
design capabilityit is down at those levels, it is not
big numbers at all. We co-operate, obviously, and make proposals
to the Ministry of Defence, our customer, to try to modify what
can be a disadvantageous situation to them or to us. As an example,
we were talking about is there a delay, is there a gap? The gap
between the first and second, second and third Astute submarines
was 18 months each, thereafter 24 months. That is the way they
were originally contracted. We have modified that in a proposal
to the Ministry to 22 months and 22 months, as Steve Ludlam mentioned.
The reason for doing that was to optimise the resource profile
so that we did not create big demands and then we had surpluses.
So we have proactively looked at this ourselves and made a proposal.
It actually reduces the number of people slightly that are employed
in Barrow but it was better for the whole programme.
Q18 Chairman: Peter Whitehouse, could
you provide the same sort of information in relation to Devonport,
Mr Whitehouse: Yes.
Chairman: Moving on to decommissioning,
Q19 Mr Hamilton: You will be aware
that in July the Prime Minister agreed that a decision will be
taken at some point whether we continue with the nuclear deterrent
or not. I do not know whether that will be a free vote or whether
there will be a whipI am not too sure but I can have a
good guess! Everybody will be watching to see how that goes. My
question is really about decommissioning and the maintenance skills
required, because it is not something you just close off, you
would have a long-term feed-out if that were to be the caseit
is important to understand that. If a decision was taken to abandon
the construction of nuclear submarines what skills and infrastructure
would have to be kept for the maintenance work? Peter, I think
you are probably the best person for that.
Mr Whitehouse: If the submarines
continue to operate until a date when they begin to phase out,
essentially, the profile of our workforce and the infrastructurethe
physical facilities that we needwould be not too dissimilar
from where we are today if there were to be further refits during
a phased run-out, perhaps during a transition to perhaps even
a different type of delivery system. Thereafter, if a programme
were stopped then the key thing is that our facility at the moment
has the unique capability to actually move the irradiated fuel
out of the NSRP and package it ready for transportation to Sellafield.
That would be, obviously, a markedly different workforce size
and skill mix compared to where we are today because we are refitting
at the moment. We would need to keep the site licensed with the
NII and, therefore, a lot of the infrastructure teams would not
look markedly different from what they do today. So infrastructure,
probably, very similar in terms of maintaining the site licence
and keeping the facilities capable of doing the work they do.
In terms of workforce, it would move progressively towards focusing
on all of the things that are needed to actually safety-justify
the de-fuelling operation, keep all the environmental consents
and other authorisations in place to allow the de-fuelling operations
to happen, and thereafter to actually then begin to address the
issue of disposal of the actual hulks.
1 See Ev 114 Back
See Ev 113 Back