BAE cuts 'may cost economy £195m and 2,400 jobs'

The wider impact of the 800 staff cuts planned for the Clyde shipyards has been estimated at a total of 2,400 jobs, including suppliers.

An impact assessment by Strathclyde University's Fraser of Allander Institute also said the cuts could cost the economy £195m a year.

But the institute said continuing work at the Govan and Scotstoun yards could support a total of 7,000 Scottish jobs.

This, it said, could generate £244.7m for the economy.

A spokesman for the institute said: "While there is clearly relief that the closure of the yards has been averted, it is useful to consider the scale of the job cuts on the Scottish economy as well as the remaining impact of the Glasgow naval yards on the Scottish economy.

"Govan and Scotstoun shipyards employ around 3,200 people in Glasgow, and the cuts announced by BAE will reduce the workforce by around a quarter.

"Using this data, plus some plausible estimates and Type II multipliers from the 2009 Scottish Input-Output tables published by the Scottish government, we can estimate the likely impact of the announced redundancies on GVA (Gross Value Added) and jobs in the Scottish economy."

Patrol vessels

The institute said its estimate of about 2,400 jobs being lost around Scotland, including those at the shipyards, as a result of the cuts was equivalent to 1.4% of all Scottish manufacturing jobs or 0.1% of all jobs in Scotland.

A loss of GVA in the Scottish economy of £195m would be about 0.1% of total Scottish GVA, it said.

But the economists stressed: "However, it should be noted, that even in its reduced state, the shipbuilding industry will continue to make a significant contribution to the Scottish economy."

BAE confirmed on Wednesday that it planned to cut 1,775 jobs at its UK yards.

The firm said 940 staff posts and 170 agency workers will go at its Portsmouth site.

Some 835 jobs will be lost across its yards in Govan and Scotstoun, on the River Clyde in Glasgow, and Rosyth in Fife, and at the firm's Filton office, near Bristol.

To offset the job losses, BAE and the Ministry of Defence announced that three new ocean-going Offshore Patrol Vessels for the Royal Navy would be built at Govan and Scotstoun.

This was aimed at sustain shipbuilding at the yards until work is due to begin on the Type 26 Global Combat ships, sometime after 2014.