Type 23 Frigates (Hansard, 22 January 1992)

§ Lord Glenarthur
asked Her Majesty's Government:
When they expect to announce the outcome of the tender negotiations for a further three Type 23 frigates.

§ The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran)
My Lords, we expect to make an announcement shortly.

§ Lord Glenarthur
My Lords, I thank my noble friend for that Answer. When reaching a decision will he bear in mind the difficult employment conditions on Clydeside? Will he also acknowledge the excellent quality of Yarrow Shipbuilders' work on earlier vessels? Will he also acknowledge that, should that order go to Yarrow, there remains the possibility of opportunities for further work coming from abroad, thereby further enhancing the prospects of that yard?

§ The Earl of Arran
My Lords, first, I should like to say that of course we recognise the excellent quality of Yarrow Shipbuilders. However, I suspect that many noble Lords could rise in your Lordships' House and plead for the same reason to be given. All relevant factors are taken into account. But I must stress that the decision will be made on the basis of value for money.

§ Lord Mayhew
My Lords, are the Government reassessing the Soviet submarine threat and the role of our frigate fleet in the light of the break-up of the Soviet Union?

§ The Earl of Arran
My Lords, we are always assessing any world threat, from wherever it may come. It is vitally important that we keep the Royal Navy up to the best quality at all times.

§ Lord Boyd-Carpenter
My Lords, does my noble friend's answer mean that the Government have firmly decided to order three of these frigates?

§ The Earl of Arran
My Lords, it was said that up to three frigates would be ordered. However, we shall make an announcement on the result of the competition just as soon as we can.

§ Lord Dean of Beswick
My Lords, is the open tendering system being used or are the tenders negotiated? In other words, does each shipyard have an equal chance in the bid for this work?

§ The Earl of Arran
Yes, my Lords. Each shipyard has an equal chance.

§ Lord Mackay of Ardbrecknish
My Lords, when my noble friend and his colleagues are considering the order for these three frigates, will he bear in mind that the officers and men of the Royal Navy consider the long line of ships that have come from Yarrow to be of the very highest quality? Will he further consider that Yarrow is the lead yard for the Type 23 frigate and both merits and deserves the order for these three frigates to provide the Navy with ships of the highest quality?

§ The Earl of Arran
My Lords, I cannot go further than the answer that I gave to my noble friend Lord Glenarthur a few minutes ago when I said that of course the quality of Yarrow is not in dispute. Nor is the quality of any of our warships from whichever yard they may come.

§ Lord Williams of Elvel
My Lords, while accepting that Yarrow is the lead designer for the Type 23, and accepting the noble Earl's statement that all other shipyards will have a fair crack of the whip, is the noble Earl aware that Swan Hunter for instance has been asked, in submitting its tender, to incorporate a £4.4 million surcharge to cover payment by the Government to Yarrow for the design? Is that a proper calculation? How was that figure arrived at? Are all other shipyards which are being asked to tender being asked to put the same sort of figure in their own quotations?

§ The Earl of Arran
My Lords, it was made clear in the tender documents issued to the shipbuilders that their bids would be subject to a weighting to compensate for the cost to MoD for provision of lead yard services by Yarrow Shipbuilders to another shipbuilder.

§ Lord Glenamara
My Lords, need I point out that Swan Hunter on the Tyne is the best, both in design and building?

§ The Earl of Arran
My Lords, there seems to be an enormous competition for the best. All are extremely good.

§ Lord Chalfont
My Lords, while declaring an interest as the chairman of Vickers shipbuilders may I say that it also has an excellent record?

§ The Earl of Arran
My Lords, based on what your Lordships have said, it will be a very difficult decision to make.