Select Committee on Defence Appendices to the Minutes of Evidence


APPENDIX 22

Letter to the Clerk of the Committee from Prospect on the Future of Royal Ordnance Factories—Birtley, Bridgwater and Chorley (25 January 2002)

  I enclose two papers supplied by our local representatives at Royal Ordnance Birtley and Bridgwater. As you will see, both papers have set out a series of questions which I hope the Committee will find useful in probing the issues affecting these two sites with the Ministry of Defence and British Aerospace. The arguments surrounding Chorley are somewhat different as in essence the future of the site is very much tied up with a commercial arrangement it has with a company called David Bickford and in particular the production of Initiators for the car industry. I do not, therefore, think the issues associated with Chorley are as significant for the Defence Committee as the futures of Birtley and Bridgwater, nevertheless, when I have more information I will pass this on.

  The first set of questions from Birtley are really trying to ascertain further information. To date they surround particular technical aspects of work carried out at Birtley in support of various MoD projects, either directly or via British Aerospace contracts.

  The second paper supplied by Bridgwater really touches on issues of security of supply and/or of transportation of material should Bridgwater close, i.e. the consequence for the safe transportation of, and stock holding of, materials in the UK that would be supplied predominantly from US sources. The paper from Bridgwater also touches on some politically sensitive issues, i.e. the US's stance on land mines.

  The Trade Unions in Royal Ordnance have been grateful to the Committee's work and in particular the consequences for the long-term Partnering Arrangements with the MoD, and there is no doubt that this Partnering Agreement is creating, for some factories, a greater degree of stability and we now have some visibility of a medium to longer term future for Royal Ordnance within British Aerospace. Nevertheless, there is a significant suspicion that the Partnering Arrangement with BAE/RO has been used to create some strategic alliances with overseas manufacturers and has therefore meant that the Partnering Agreement is supplying jobs outside of the UK. It will be helpful if the Committee were to ask RO Defence for the breakdown of the workloads and product lines that fall within the Partnering Arrangement and to indicate which products supplied to the MoD are being provided either by direct manufacturing of overseas companies or through purchase.

  I hope this information is helpful, again I apologise for not getting back to you as quickly as I initially thought possible.


QUESTIONS RE BIRTLEY [PREPARED BY THE ROYAL ORDNANCE BRIDGEWATER TRADE UNION TEAM]

  1.  Can the Committee enquire with the MoD directly and provide the five-year demand for ammunition? In addition, there should also be 10-year projections of ammunition demands. (Need to confirm that the Birtley SOP properly reflects the demands of ammunition from the MoD).

  2.  Could the Committee request BAE, RO Defence provide information on the enquiries and responses received from the Company over the last two years?

  Has the Company responded quickly to each of the enquiries?

  More specially, what enquiries have the Company declined to quote for?

  3.  Seek clarification from ROD, BAE and MoD that overseas customers would be satisfied with empty ammunition being manufactured overseas and supplied as a UK product.

  4.  What is the estimated lost revenue for the Government, eg Income taxes, Benefits payments etc of historic RO Birtley work being carried out overseas?

  5.  The Partnering agreement between the MoD and Royal Ordnance was agreed and put in place to stabilise the Company and provide a five-year forward view of the MoD's ammunition requirement.

  Should these orders be used by the Company to guarantee indigenous supply of ammunition to the MoD and to maintain Royal Ordnance manufacturing base, including Birtley?

  6.  Following the Defence Select Committee Report, concerning the security of supply and future of RO Bishopton.

  Has there been any post audit activity concerning the contract with South Africa?

  Is there any information available that details the technical performance to contract, delivery performance and actual cost to contract?

  7.  What work has been conducted by the MoD, including the Ordnance Board, to confirm re-qualification of the products manufactured at Birtley midway through contract on both raw material source and also the finished product?

  Prepared by the Royal Ordnance Birtley Trade Union Team.

QUESTIONS RE BRIDGWATER

Security of Supply

  1.  If Bridgwater was to cease to manufacture then explosives would have to be imported from America (or other supplier), this would require a very large stockpile of explosives for production purposes.

  What would the cost be to provide suitable security arrangements to guard the huge amounts of stockpiled material?

  2.  There is an increased risk in safety in transportation in two areas:

  (a) Terrorism and (b) Normal shipping and road accidents.

  3.  By keeping the only military high explosive manufacturing facility in the UK the Government is in total control of its foreign policy i.e. no foreign Government would be able to interfere with the supply of explosives, as was seen in the Middle East conflict when Belgium refused to lend Britain supplies.

  4.  As already stated, there are increased risks in further distances of transportation. What is the cost benefit of transportation of American explosive in comparison to Bridgwater explosive production?

  This needs to include paperwork, packaging, end user certificates, handling etc and also the important point of if/when BAE systems lose the contract to run the American (Holston) explosive plant. This point is developed further under point three of the Political/Commercial situation section.

Safety Issues

  1.  The Woolwich versus Bachman question, the Woolwich process for the production of RDX produces an explosive that is inherently safer due to the high purity. RDX (B.UK) is inherently more stable as the quantity and quality of HMX that is added is better controlled. Note that for many existing compositions Woolwich RDX is specifically required.

  So are the MoD/RO more interested in the cheapest option or the safest option? If it is cost then it has to be purchased from America as RO has limited overheads due to operating the American Government's explosive plant on contract.

  If it is the safe option then RO Bridgwater would be retained or if RO wants to shut down the country's only military high explosive manufacturer and the UK Government are prepared to allow this to happen, then the explosive should be purchased from a country like France, who produce the Woolwich type explosive.

  2.  Insensitive munitions (IM) is the complete weapons system which includes booster pellets, the IM booster pellets require N7 which is only produced at Bridgwater. Bridgwater provides the USA with this product, as the USA does not have the facility to manufacture the major ingredient for this composition.

Political/Commercial Situation

  1.  The UK Government has signed up to the Ottawa Convention, the USA have refused on numerous occasions to sign the convention.

  BAE Systems are a British company operating the American Government's explosives facility at Holston.

  What would be the company's and UK Government position if the American Government required the Holston Site to produce explosives for land mines which is in complete contravention of the Ottawa convention?

  BAE Systems has a 25-year contract to run the American Government's explosive facility at Holston, which can be reviewed by either side every five years. If BAE Systems do not play ball would they lose the contract and where would that leave Britain let alone BAE Systems?

  2.  The UK Government allows UK companies to sell arms to "friendly Middle East countries".

  The American Government has a considerably tighter policy regarding sales to Middle East countries.

  3.  BAE Systems has at most a 25-year contract to run the American Government's explosive facility, there will be approximately 15 years at most remaining if the Bridgwater site closes.

  What is the long-term thinking and plans for the UK procurement of explosives after that time?

  For information purposes it is rare for a company to win a second term contract with the American Government.

Strategic Nuclear Requirements

  1.  RO Bridgwater produces certain strategic material for the British nuclear program (this is different from the American program), if Bridgwater closes where would the UK Government source these materials and how would they requalify the system?

  Is it Royal Ordnance's plan to totally close the Bridgwater site?



 
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