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UK Government close to new Clyde ships deal

Scottish Secretary says agreement in the works with warship builder BVT to keep Scotstoun yard busy for next 15 years.

02 July 2009 17:42 GMT

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UK Government close to new Clyde ships deal

An agreement will be struck soon to ensure defence contracts for the Clyde for the next 15 years.

The Scottish Secretary made the announcement on Thursday during a visit to the Scotstoun yard in Glasgow. Jim Murphy said the "terms of business agreement" between the Ministry of Defence and warship builder BVT would offer "real assurance" for future jobs.

It is understood the work could include contracts to build a new generation of frigates.

The visit by Mr Murphy follows by a day a leaked memo suggesting that two of BVT's three yards could close after a contract for two giant aircraft carriers is completed in 2014.

The author of the memo, BVT surface fleet chief executive Alan Johnston, accompanied Mr Murphy on his visit. Mr Johnston insisted the document was no more than the type of "worst-case scenario planning" conducted by all prudent firms.

He said: "What we are looking at in these stolen documents are planning scenarios.

"We are looking at planning scenarios on the downside, but our aim is to drive for the upside of this business - and we see a very solid future here on the Clyde."

Mr Murphy insisted: "There's seven years of work here, and we are looking over the next few weeks to sign an agreement that would guarantee some work for the next 15 years."

Prime Minister Gordon Brown also reassured workers at the two Clyde shipyards that they would win new contracts.

"I think the reassurance is that there is years of work ahead on the aircraft carriers," he said. "As you know ship building is one of those industries where you continue to look for the contracts for the years after that.

"I believe we will find contracts for the years after that."

BVT employs 7,000 workers at the Govan and Scotstoun yards in Glasgow, as well as at Portsmouth and Bristol.

The leaked memo contemplated the period after work on the two giant aircraft carriers is finished, and said MoD requirements could be delivered from a single BVT facility - and that the MoD had "committed to underwrite the necessary closure costs".

The agreement to be signed shortly is a 15-year pact setting out how the MoD and the company will work together. It was expected to include provision for up to 18 new-generation frigates to replace the Type 22 and Type 23 vessels.

Mr Johnston said that, under current planning, steel for these could begin to be cut in 2013 and Govan could be a contender - "I would suspect that's a prospect".

John Dolan, Scotstoun convener for the GMB union, insisted his industry had a good future.

He said: "This industry is not closing.

"Whether anybody offers money for redundancy or not, they have to take into consideration the views of the workers - whether they want redundancy or not.

"We have been in worse corners before, and we have fought them,  and we will do it again if necessary.

"But at this stage, it's a huge future."

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