BAE told: Use British steel for Navy deal
Defence giant under pressure on contract for eight warships
MinisTers and defence giant BAe are under pressure to ensure British steel is used to build the next generation of warships.
The Ministry of Defence has struck a deal with BAe systems to start work on eight anti-submarine vessels at its Glasgow shipyard by next summer, but they have refused to guarantee that the uK’s struggling steel industry will be awarded the vital contracts.
The use of British-made steel in the royal navy’s state-of-the-art frigates would provide a lifeline for an industry which has been ravaged by a crisis that has claimed thousands of jobs and devastated communities.
The plea comes after last month’s revelation that a deal to supply steel for the next generation of nuclear submarines – also built by BAe – had been awarded to the French.
A spokesman for steelworkers’ union Community said: ‘it makes more sense to support the uK steel community by buying British steel rather than by using taxpayers’ money to pay the unemployment benefits of steelworkers.
‘if the Government had a joinedup industrial strategy then the steel for such a big defence project would be sourced from the uK.’
And unite the union said: ‘We urge the Government to insist on British steel.’
however, BAe said it had already held talks with international firms about the steel needed to build the Type 26 Global Combat ships, part of an £8bn deal to build royal navy warships over the next decade. it would not reveal the value of the steel contract. A spokesman said: ‘The steel hasn’t been procured yet and we have conducted some preliminary work. This has involved engagement with the uK and international steel market. uK companies will be invited to tender.’
An MoD spokesman said: ‘The Type 26 programme will secure hundreds of high-skilled shipbuilding jobs on the Clyde for at least two decades and hundreds more in the supply chain across Britain. uK steel suppliers have an opportunity to bid for new contracts. no orders have been placed yet.’
The British steel industry has been suffering a decline in recent years driven by cheap Chinese imports undercutting British producers. Thousands of jobs have been axed, exacerbated by a combination of higher energy costs and heavier taxes than european rivals.
As a result, the Government pledged in April that British steel companies would be able to compete on a level playing field for contracts across the public sector. This came with a promise that steel contracts would not go abroad if the most competitive bid was British.
‘All central Government departments must consider the social and economic impact of the steel they source across all major projects,’ a press release said at the time.
in January, Derby-based Bombardier was snubbed when a £490m deal to build carriages for northern rail went to spanish company CAF, depriving Britain’s only remaining train maker of the cash to secure its future.