Naval Refits

HC Deb 04 July 1995 vol 263 cc125-6

1. Mr. Chidgey

To ask the Secretary of State for Defence if he will consider allowing all shipyards to compete for naval refits by ensuring that whole classes of vessels are not put within predetermined refit programmes. [30555]

The Minister of State for Defence Procurement (Mr. Roger Freeman)

All shipyards are able to compete for a wide range of naval refits within the unallocated programme. An increasing volume of work will be put to competition as the number of refits in the allocated programme reduces. Eventually, the whole of the surface ship refitting programme will be available for competition.

Mr. Chidgey

The Minister has already informed the House that he is considering deferring the ending of nuclear work at Rosyth. Is he therefore also considering reviewing the allocation, and the consequences of his action on the allocation, of refit work for surface ships? If he is considering that review, will he give the House an undertaking that he will also consider the allocation of refit work for mine warfare ships—a particular concern to Vosper Thornycroft in my constituency?

Mr. Freeman

We are discussing with both the managements at Rosyth and Devonport any amendments that need to be made to the allocation of work. The hon. Gentleman is right to say that the allocation to Rosyth assumed the end of refitting to strategic nuclear submarines in about two to three year's time. We need to run on strategic nuclear submarine refits at Rosyth and therefore we will reconsider the allocation programme, but I hold out no immediate hope to the hon. Gentleman that we shall reconsider assigning whole classes of ships to Devonport.

Mr. Colvin

Without inviting tenders from others, how certain can my right hon. Friend be that the price that he receives for the refit work at Rosyth, which I acknowledge will have allocated work, is competitive? Is it not unfair that Vosper Thornycroft, which built most of the smaller warships that are being allocated to Rosyth, is not being allowed to bid for the tender for their refits? None the less, will he also take this opportunity just to tell us what the Government's position is with regard to the bids for the new type 23 frigates?

Mr. Freeman

I confirm to my hon. Friend that we expect Vosper to bid. My understanding is that it has bid for the type 23 frigates. I have a high regard for the company. I have confirmed that the yard is capable of a new build of a modern warship. On refitting, my hon. Friend is right, but to ensure that the price is competitive, we use estimates of what we believe the work of comparable ship refitting has been in the United Kingdom. We have refined our techniques for ensuring that the taxpayer gets value for money, but I look forward to the day when all ship refitting is available for competition—that should be from about 2005, and Vosper will be able to bid for all classes of refitting then.

Mr. Denham

How can Vosper Thornycroft be excluded, as the Government are currently planning, from bidding for Hunt and Sandown minehunter work until 2005? Is the Minister not aware that a shipyard such as Vosper is constantly improving its productivity and lowering its cost structures? How can his Department really know what a competitive price for that work would be unless Vosper is able to bid for at least part of the work load that has been allocated elsewhere?

Mr. Freeman

I understand the strength of that argument, but I should set against that the fact that we wish the Rosyth shipyard, in due course, to concentrate only on surface ship refitting. It is important that Rosyth should be viable. It is important that it should make a full transition from nuclear work to surface ship work. Therefore, the Ministry of Defence has an obligation to Rosyth as well as an obligation to ensure that there is as much competition as possible. I remind the House that we welcome competition for the unallocated programme of refitting work, especially for frigate work and that, by 2005, all new build yards and refitting yards will be able to compete for the work.

Mr. Gallie

I commend my right hon. Friend for sticking to the commitments that he gave to Rosyth about two years ago—commitments that were sought from both sides of the House. Is it not disgraceful that Opposition Members seem now to be trying to persuade my right hon. Friend to turn against those commitments, which he gave so readily only a year or two ago?

Mr. Freeman

I am grateful to my hon. Friend for that support. I can confirm our clear determination to ensure that there is a proper allocation of balanced work, not only for Rosyth but for Devonport. We shall not revisit our decision to allocate Trident submarine refitting work to Plymouth, Devonport, but we intend to ensure that Rosyth has enough viable work to ensure continued employment well into the next century.