A union flag flies over the entrance to the naval dockyards, where BAE Systems are also located

BAE to end shipbuilding in Portsmouth

Defence giant BAE Systems has announced plans to axe 1,775 jobs and end shipbuilding at one the UK's historic industrial sites.

The firm said 835 jobs will be lost in Glasgow, Rosyth and Filton, near Bristol, while 940 jobs will be lost in Portsmouth bringing shipbuilding operations there to an end in the second half of next year, though an engineering team will be retained to support the new Type 26 warships to be built in Glasgow.

BAE said it remained committed to continued investment in Portsmouth as the centre of its maritime services and high-end naval equipment and combat systems businesses, but that it was being hit by a "significant" reduction in workload following the peak of activity on the Queen Elizabeth-class aircraft carrier programme.

The grim news was given to workers at a series of meetings at 11am across the affected sites, before they were allowed to go home for the rest of the day.

Defence Secretary Philip Hammond told the Commons that every effort would be made to redeploy workers, and that compulsory redundancies would be kept to a minimum.

"The loss of a shipmaking capability will be a harsh blow to Portsmouth," said the minister, who announced that more than £100m will be invested in the city's naval base so it can accommodate new warships.

"The loss of such a significant number of jobs is of course regrettable, but it was always going to be inevitable as the workload on carrier build came to an end."

The minister also gave details of a contract with BAE for three new offshore patrol vessels for the Royal Navy, which will be built on the Clyde in Scotland, to provide work between the completion of the current aircraft carriers and the start of the building of Type 26 combat ships.

Hammond confirmed earlier reports that the overall budget for the two carriers had increased to £6.2bn, but also announced that the contract had been renegotiated to ensure the taxpayer and the contractor now split any additional costs or savings on the final price 50-50, rather than the taxpayer shouldering 90 per cent of the burden, as was the case in Labour’s original deal.

The first of the new aircraft carriers is expected to begin sea trials in 2017 and a manufacturing contract for Type 26 Global Combat ships is not expected to be awarded until the end of next year.

In a statement BAE said: "Following detailed discussions about how best to sustain the long-term capability to deliver complex warships, BAE Systems has agreed with the UK Ministry of Defence that Glasgow would be the most effective location for the manufacture of the future Type 26 ships.

"Consequently, and subject to consultation with trade union representatives, the company proposes to consolidate its shipbuilding operations in Glasgow with investments in facilities to create a world-class capability, positioning it to deliver an affordable Type 26 programme for the Royal Navy.”

Unions said the job losses were a "devastating blow" to the industry, while some politicians said Portsmouth was being hit harder than yards in Scotland because of the independence referendum in Scotland next year.

Gerald Vernon-Jackson, leader of Portsmouth City Council, condemned the decision to shut down the last remaining shipyard in England with the capability to build advanced surface warships, saying it was bad news for the defence of the UK and for the Royal Navy.

"The remaining yards with the capability to build advanced warships are in Scotland, and the referendum on Scottish independence is less than one year away. Ministers have put the defence of the UK and the future of the Navy at real risk," he said.

The announcement was attacked as a politically motivated "act of lunacy" by one of Portsmouth's Conservative councillors.

Alistair Thompson said: "This is devastating for the workers and their families but also for all those people involved in the supply chain that keeps the dockyard working. Many of those who I represent as a councillor are hugely concerned that this decision has been taken for political reasons because of the referendum in Scotland next year."

David Hulse, GMB national officer and chairman of the Confederation of Shipbuilding and Engineering Unions' (CSEU) shipbuilding national committee, said: "There is no doubt that this is a devastating day for the UK shipbuilding industry and the company will have to justify to us the job losses planned.

"We have arranged a two-day meeting with the company at Farnborough next Monday and Tuesday that will be attended by officers and shop stewards from all the yards and all the unions. This meeting will examine in detail the business case and all aspects for scheduling work in the yards to complete building the carriers, starting work on the Type 26 ships and any other work."

At Prime Minister's questions, David Cameron said: "These are extremely difficult decisions and our first thoughts should be with all of those that are affected.

"We want our Royal Navy to have the best and most modern ships and the best technology. That means we will go on building warships on the Clyde, we will be announcing three new offshore patrol vessels, keeping that yard busy rather than paying for it to remain idle as the last government proposed.

"In Portsmouth, yes there will be job reductions, but there are many more people involved in ship servicing than in ship building, so the workforce will go from 12,000 to 11,000."

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