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Rolls Royce Nationalised To Save Nuclear Deterrent?
The maker of nuclear reactors for Britain’s nuclear submarines could be nationalised, under contingency plans reportedly drawn up by the government.
Rolls Royce is feared to be at risk of foreign takeover, after issuing five profit warnings in two years.
The Financial Times (FT) claims a government intervention is one option if ministers think they need to protect UK interests.
Nuclear reactors lie at the heart of every Royal Navy submarine and is the critical power source that drives boats deep in the ocean for months at a time.
The reactors are highly specialised, laden with sensitive technology and built by Rolls Royce.
All the new Astute class submarines – currently being built in Cumbria – are being fitted with them.
The successor to Britain’s current nuclear-armed Vanguard submarines will also depend on Rolls Royce reactors.
But Rolls Royce as a whole is struggling, raising fears of a hostile takeover from abroad.
If that happened Britain would want to protect both its sensitive technology, and the supply of reactors.
The Minister of Defence Procurement Philip Dunne has told the FT the government is “concerned that Rolls Royce performs, and is capable of performing its nuclear obligations."
The paper claims other options are being considered if required.
These include either a merger with BAE systems - the lead manufacturer of British submarines - or nationalisation, taking the Rolls Royce submarine business into public hands.
But ministers will not confirm if such contingency plans are being drawn up.
The government does hold a golden share in Rolls Royce that gives it some protection from a hostile bid.
Nationalisation would look odd from a government trying to drive efficiency through private sector contracts, the importance of Rolls Royce for Britain's submarines, however, might trump that.
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