One submarine yard and one government customer

The British nuclear-submarine yard combines a government monopsony, with one purchaser, and a supplier monopoly operated by BAE. A cost write-down does not remove the company's incentive to recover that money through later business. In this argument, its sole customer is the British government, so the taxpayer ultimately funds that recovery and the supplier's profit margin. The expected benefit of commercial ownership is competition that constrains prices. Without another yard able to compete for the work, that source of price pressure is absent.