Examination of Witnesses (Questions 460-479)
BARONESS TAYLOR OF BOLTON, DR ANDREW TYLER AND MR AMYAS MORSE
29 APRIL 2008
Q460 Mr Wallace: With all respect, Minister, the concern of the Committee is that should there be a delay in the aircraft carriers programme—and there are delays throughout at the moment in a number of MoD projects—you could argue that the legitimate concern was that given that delay, could the capacity in the yards not be filled by the MARS programme or the initial two tankers? The response, Minister, that you gave us at the beginning was that there are two reasons why we could not: one was there was no design to slip in.
Baroness Taylor of Bolton: That is absolutely correct.
Q461 Mr Wallace: But it seems to me that if it is going commercial there would be a design split here. I do not understand. Are you saying there is a design or no design?
Baroness Taylor of Bolton: There is no design. One contract will be the design, so we cannot construct immediately.
Q462 Mr Wallace: So that delay is going to exist whether it is a commercial contract or a MoD contract.
Baroness Taylor of Bolton: So are you anticipating the carriers being postponed for several years?
Q463 Mr Wallace: I think the track record of the MoD at the moment for its defence procurement programmes being on time and delivered in the last number of years shows that we have every right to be suspicious that the Ministry of Defence is not able to sign on time and perhaps deliver those programmes as we had hopefully expected. So the unions are quite right, I think, and everybody else, to ask that if there is a delay why we cannot use those yards' capacity for MARS, and the answer would come back, "We have no design to slip in," but that surely is a factor of whether it is commercial or defence. And the other reason for delay, Minister, you said, was the process of applying for derogation to 296.
Baroness Taylor of Bolton: No, I said that could have caused a delay.
Q464 Mr Wallace: So that could have caused delay and so—
Baroness Taylor of Bolton: But we are not going down that route so there is no delay because of that.
Q465 Mr Wallace: So there will be no attempt to go back to the drawing board should there be a delay in the aircraft carriers?
Dr Tyler: At the moment we are planning on a very pragmatic strategy with the aircraft carriers. At the moment although we do not have a contract signed we have not yet had one single slip in terms of our schedule. We are tracking it month by month, so we are placing—as I am sure you have already seen in the press—the key contracts and we are doing the design work that we need to do. So there is no delay to the carrier programme at the moment and we are able to underpin the 2014—
Q466 Mr Wallace: You used to have the concept of Main Gate; do you still have that concept?
Baroness Taylor of Bolton: Yes, that was in July.
Q467 Mr Wallace: That is Main Gate so when is the final effective signing that we are now waiting for going to happen? You have finished your Planning Round, have you not, Minister?
Baroness Taylor of Bolton: We have gone a long way towards completing our Planning Round. I said at the beginning—I repeated the words of the Secretary of State of yesterday—that when we have everything aligned that is when we will sign. We are still waiting to get everything aligned, but we want to get alignment. In terms of MARS the work needs to be done—it needs to be done urgently—and we will not have the capacity at the time that we need these in British yards. Therefore we could delay the whole project or we could have opened it up, as we have done, with a degree of British interest.
Q468 Chairman: In your view when is it likely that this aircraft carriers contract can be signed?
Baroness Taylor of Bolton: I cannot say any more than the Secretary of State said yesterday.
Q469 Mr Wallace: I take your word that the MARS thing is pretty much hypothetical because we should not be seeing a delay in the aircraft carriers, but I want to expand on this alignment. Has the Ministry of Defence finished its Planning Round or not?
Baroness Taylor of Bolton: We are very close to finishing the detail.
Q470 Mr Wallace: Has it decided on its different programmes?
Baroness Taylor of Bolton: We have made a number of decisions about the number of programmes; we have not made any announcements and I am not going to do so.
Q471 Mr Wallace: I want to find out if you have completed the process.
Baroness Taylor of Bolton: I am not going further I am afraid.
Q472 Mr Wallace: Minister, all we are getting is an answer about alignment—we have to get these things aligned and then we will know. Have you completed the review of the programmes? I am not asking you which ones are saved or not saved—yes or no?
Baroness Taylor of Bolton: You talk about it as if the MoD just sits down one day and looks at all its programmes, ticks certain things off and makes crosses on others. That is not the case because many of these programmes change over time; we upgrade things; we decide that we will not upgrade this at this stage because we want to do it in a different way in six months' time, two years' time or whatever.
Q473 Mr Wallace: That is the Planning Round.
Baroness Taylor of Bolton: No, that is why Planning Rounds are always subject to future changes and future Planning Rounds because nothing is as definitive as it is in other departments because you are not buying things off the shelf for single use and off they go. You have to take into account all the upgrades and other things.
Q474 Mr Wallace: Minister, I would be very keen to know what you exactly mean by alignment, about before the decision is announced or whatever there is more alignment to happen. What is that?
Baroness Taylor of Bolton: That is what we are discussing with the companies at the moment and, as I said, we are not going to have those discussions in public. The Secretary of State said yesterday that when everything is in place then we will set a date for signing.
Q475 Mr McGovern: Like other Members I am quite concerned about what I am hearing about the time tables and the availability, et cetera. I do not think we have heard anything definitive actually—it does sound very, very vague. The Chairman mentioned earlier that at our meetings with the management and with the trade unions of the Glasgow shipyards they expressed concern that there might be a serious problem by the end of the year. Can you clarify what you are saying, that those fears are groundless and there is nothing to worry about, and can we go back and reassure the management and the unions that that is what you have told us?
Baroness Taylor of Bolton: I think at this stage what I can say is what Andrew said, that so far we have not lost a day in terms of the work that we have been doing on the carriers. We know that the companies are as keen to move forward as we are and that is why we are having very close contact with them and very close discussions with them.
Q476 Mr McGovern: So we cannot tell the unions that you have told us there is nothing to worry about?
Baroness Taylor of Bolton: I can tell you that we have not lost a day at this stage, but in terms of when a contract will be signed, I cannot add anything to what the Secretary of State said just yesterday on the floor of the House. When he was answering defence questions this came up and he made the position as clear as he could and there is nothing I can add to that.
Q477 Mr McGovern: Do you think there is a problem here?
Baroness Taylor of Bolton: A problem in what respect?
Q478 Mr McGovern: With workload. That is what the unions were expressing to us, and the management.
Baroness Taylor of Bolton: When I spoke to the unions they were very realistic; they knew that a lot of planning was going on. They see the need for long lead items being bought; they see the work that is taking place in some places such as Rosyth and that gives them confidence that this contract is going to go ahead. They have seen things progressing well so far and I think what Andrew was saying about not having lost a day at this stage is right.
Dr Tyler: One thing that the yards get total visibility of at the moment is the engineering design activity—it is actually being done in the shipyards, it moved into the shipyards at the end of last summer—so the unions have total visibility of the progress that is being made in maturing the design and we have no plan at any time to start the production activity until we have got the design to the appropriate level of maturity, and they have total visibility of that. I can also reassure you that there has been no change in the spending profile of the money required in order for us to buy the items that we need to when we need to, to make investments in the infrastructure—and, as I think you are aware, there is a major investment committed to in Rosyth of £35 million to build all of the infrastructure for the production and integration activity at Rosyth. So if I was in their position I would be seeing a lot of walk to go with the talk to illustrate that we were very serious and we are keeping to the schedule which the Minister and Secretary of State repeatedly stated in the House as being a delivery for 2014 and 2016.
Q479 Mr McGovern: I understand what you say that the unions are very, very realistic and pragmatic, and they were when we met them too, but we must express the fears that they expressed to us and that is why I am looking for reassurances that you are able to give us and I am still unsure as to whether I received them or not.
Baroness Taylor of Bolton: I think we would say so far so good, we are on track, and that I think is the key at the moment.
| 
