Proposals that would see BAE Systems focus on the Type 26 frigates, clearing the way for other companies to build different vessels, are likely to be ignored
Aradical plan that would break up BAE Systems’ near-monopoly building Britain’s warships will never be implemented, according to defence sources.
Industrialist Sir John Parker unveiled his independent report on naval shipbuilding last month, having been commissioned to by the government to investigate the subject in the March Budget.
Sir John, a trained naval architect who currently chairs Anglo American and has held senior jobs at companies including Babcock, Harland & Wolff and Carnival, recommended spreading work across other shipyards.
He also wanted to see work on a new class of Type 31 frigates, a “stripped down” version of the Type 26 vessels which BAE is due to start building in 2017.
Sir John Parker wanted to see work on the Type 31 vessel accelerated
Other recommendations included an export push for the Type 31 as part of the “prosperity agenda” to sell more equipment overseas, as well as replacing ships once they reach the end of their natural lives, rather than extending their time in service thorough costly refits.
Increasingly the workload in this way would likely see BAE lose its dominance of building ships for the Royal Navy.
The City also applauded the Sir John’s ideas. Jefferies analyst Sandy Morris called the plan “sound common sense” that had the potential to shake up the industry.
However, defence sources have told the Telegraph that while Sir John’s ideas were seen as far-reaching and welcomed in many cases, they will never go ahead.
“The Chancellor controls the spending and there’s just no money for the Navy to build the Type 31s,” said one, referring to Philip Hammond’s nickname of “spreadsheet Phil” and his vice-like grip on spending.
Sir John Parker’s proposals were applauded by many
The Royal United Services Institute agreed the proposals were unlikely to become reality.
Dr Peter Roberts, director of military sciences at the influential defence think-tank, said: “Ending BAE’s monopoly might seem a lovely idea for industry but very few companies are willing to take on as difficult a customer as the Ministry of Defence, which changes its mind all the time as warfare changes.
“Others say that it might take only five years from concept to delivery of a mega cruise ship but two decades for a Navy ship and think that speed could be applied to the military. These are very complex vessels and few companies can commit to those long timeframes.”
BAE is part of a consortium building the Navy’s new aircraft carriers CREDIT: JOHN LINTON
Dr Roberts also questioned the value of accelerating work on the Type 31, saying the stripped down vessels could be a liability in the event of conflict as they would be unable to protect themselves, and said the idea of making them suitable for export markets was likely to fail.
“Most countries build their own warships to their own designs because they have specific roles – whether it’s hunting submarines in the Atlantic or protecting aircraft carriers,” he said. “Warfare does not make allowances for the government’s ‘prosperity agenda’.”
Independent defence analyst Howard Wheeldon added: “This is a well-intentioned document and if there was the demand for more naval shipbuilding after the Type 26 programme, Sir John’s plan would be absolutely perfect.
“However, that demand is just not there and the report is solely destined for the library shelves.”
Defence Minister Sir Michael Fallon has said Sir John’s report “will inform our National Shipbuilding Strategy to match the needs of the Royal Navy with the ability to design and build efficiently, maintain skills, and maximise export opportunities.”