OUTLOOK FOR THE MARINE DEFENCE SECTOR

The impending general election has brought with it more speculation and debate as to likely courses of action open to any future Conservative administration in their attempt to balance the national budget.

By Andrew Collier - NDI Sector Business Manager (Republished from the NDI Annual Review 2009)

The Shadow Chancellor has hinted fairly clearly that he would like some deep examination of defence programmes and inevitably eyes will turn to the carrier programme (CVF), Future Surface Combatant (FSC) and even the Trident replacement known currently as Successor. These programmes are undoubtedly expensive but the rationale for procuring them, even when resourcing a pressing land campaign in Afghanistan, must be seen in terms of assuring future security and the need to maintain capability. Besides it can be convincingly argued that there are clear national economic advantages in forging ahead with build programmes now.

Scrapping of any one or all of these naval programmes will irrevocably alter Britain’s standing within the international community, severely restrict our ability to project power alone and call into question our relevance as a capable partner in coalition operations. And this wouldn’t be transient, what some might seek to characterise as a temporary loss of capability to be built back in better time. No, this would be the new benchmark position of UK PLC’s maritime power. The question is, could any British Government welcome the prospect of an island nation having virtually no modern naval operating ability? I think not.

There is no doubt that the country will face a Strategic Defence Review following the next election no matter who comes to power. But such a review takes time to report and implement, meanwhile the programmes progress and physical proof of such is clear to see in the maritime defence developments in North East England. Take for example Hebburn based A&P Tyne’s winning of the £55 million construction work contract on the flagship carrier vessels, HMS Queen Elizabeth and HMS Prince of Wales. Many of the firm’s 210-strong workforce will be working on the project over the next five years. This is an example of a first class yard with a skilled and highly competent work force positioning itself adroitly to take on large pieces of main block sub assemblies. NDI members Darchem Engineering are also cracking on with work worth £8m on the ship’s uptakes and downtakes.

While FSC and Successor remain on the drawing board, and can thus be regarded as vulnerable to delay, the MOD’s recent decision to invite industry to address the issue of providing a new Fleet Tanker signals a welcome commitment to take this programme onto the next stage. Originally the Military Afloat Reach and Sustainability (MARS) programme consisted of three classes of ships (Fleet Tanker, Fleet Solid Support and Joint Sea Based Logistic) although now only the Tanker programme survives.

The new fleet tankers, of which there will be six, will comply with the highest international environmental standards and are intended to support a full range of global Royal Navy operations for 25 years from their launch. There has been much speculation as to where these ships will be built and early indications suggested that fabrication would take place in the Far East with the tankers being returned to the UK for specialist fitting out. This is far from clear and although, for yard capacity issues if not price, they are unlikely to be built in this country there will be significant down stream and supply chain opportunities associated with the build. NDI will continue to monitor, identify and break out these business opportunities as they arise.

Gloom merchants predict the cut back or whole scale abandonment of the large ticket maritime defence equipment programmes. Adjustments will be made and are expected, but an across the board slash doesn’t make sense and fails to take account of the momentum built on projects like CVF. Programmes underway or imminent are a source of considerable economic benefit to UK manufacturing, an issue which won’t be lost on our next government.