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'Shipbuilding's Coming Home'?

Monday, July 9, 2018

 

NEW REPORT STRENGTHENS GMB CALL TO MAKE SURE ‘SHIPBUILDING’S COMING HOME’

Review commissioned by Defence Secretary strengthens GMB’s campaign to keep Fleet Solid Support order in the UK

GMB, the union for shipbuilding workers, has said that a new review of defence spending has strengthened its campaign to construct up to three Fleet Solid Support vessels in the UK.

The report, Growing the Contribution of Defence to UK Prosperity, which was written by former Defence Procurement Minister Philip Dunne and published this morning, was commissioned by Defence Secretary Gavin Williamson.

The Dunne Review has recommended that the Government should consider factoring the economic benefits of UK spending and taxation into its procurement policies [1] – two arguments advanced by GMB should the Government proceed with putting a crucial order for up to three military support ships out to international tender. [2]

GMB has opposed the Government’s decision to put an order for up to three new Fleet Solid Support ships out to international tender. The union estimates that up to 6,700 jobs could be created or secured if the order was placed with UK yards.

The Dunne Review found that the defence sector employs half a million people, both directly and indirectly. 

MPs will debate the Government’s record on shipbuilding on Wednesday. [3]

Ross Murdoch, GMB National Officer and CSEU Chair Maritime, said:

“We welcome the fact that Philip Dunne listened to the arguments put forward by shipbuilding trade unions, even if his recommendations don’t go far enough.

“Even at this late hour, the Government can still reverse its decision to put the Fleet Solid Support order out to international tender.

“If Ministers make the wrong decision and insist on putting highly skilled UK jobs at risk, they must at the very least accept and implement the recommendations in this report that would make limited progress towards establishing a level playing field.

“Up to 6,700 jobs are at stake. Other countries do not hesitate to place orders with their own yards to preserve vital skills and their sovereign defence capabilities, and the UK should do the same.

“The Defence Secretary should now give the UK another reason to cheer and ensure shipbuilding is coming home.”

ENDS

Contact: GMB Press Office on 07958 156846 or at press.office@gmb.org.uk

Notes for editors

[1] Growing the contribution of defence to UK prosperity: a report for the Secretary of State for Defence by Philip Dunne MP, 09 July 2018, https://www.gov.uk/government/publications/growing-the-contribution-of-defence-to-uk-prosperity-a-report-for-the-secretary-of-state-for-defence-by-philip-dunne-mp

Page 53 - 'For FSS [Fleet Solid Support] and as part of the early objective-setting for other future significant procurements ... development of relevant prosperity weighting for UK content and criteria to assess tenders should be considered.'

Page 54 - 'There is current debate in some circles about whether to take into account tax revenues when making decisions on major procurement procurements, as set out by GMB ... the prevailing orthodoxy deployed by HM Treasury and supported by other economists is that value for money for the taxpayer is achieved without taking into account the taxes raised from spending in the UK.

Given the strategic objective which the MOD now has to contribute to UK prosperity, the MOD should commission academic work to inform a discussion with the Treasury to settle the question of whether additional tax revenues flow back from procurement spend in the UK and whether a cost premium applies to maintaining freedom of action and operational advantage from UK manufacture.’

 [2] GMB’s research report, Turning the Tide: Rebuilding the UK’s defence shipbuilding industry and the Fleet Solid Support order, published 25 April 2018, recommended that:

 ‘When scoring bids between domestic suppliers and foreign competitors, public bodies should factor in the revenue that would be returned to the Treasury in the form of taxation and lower welfare payments. The MoD and the Treasury should consult on and produce a model that provides an agreed methodology for doing so in respect of defence contracts that also accounts for likely corporation tax receipts. When placing shipbuilding orders, the MoD should proactively publish an estimate of the tax benefits of orders going to domestic suppliers.’

http://www.gmb.org.uk/turning-the-tide.pdf

 [3] The Labour Party has called on opposition day debate on shipbuilding in the House of Commons this Wednesday (11/07/2018).

 

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