Hansard

On Tuesday, I was pleased to return to my old workplace, BAE Systems naval ships in Scotstoun, with the newly appointed Minister of State for Defence Readiness and Industry, Luke Pollard MP, to celebrate the £10 billion deal to supply at least five type 26 frigates to our Norwegian friends. The deal has brought with it a wave of optimism to the shipyards on the River Clyde, in stark contrast to when I worked there a decade ago. I think that I express the will of the whole Parliament in extending our gratitude and thanks to our Norwegian neighbours for their vote of confidence in our shipbuilders and the world’s best frigate design.

Both the Scottish naval shipyards—in Govan and Scotstoun, and Rosyth—now have a formidable order book with an expected 18 frigates in the pipeline: 13 type 26 vessels for the Royal Navy and Royal Norwegian Navy, and five type 31 frigates for the Royal Navy, with export prospects for the latter including to Denmark and Sweden.

Glasgow is now at the very heart of the largest surface naval shipbuilding programme in Europe, a programme rivalled only by those in the United States and China. This is not only about building ships; it is about building a future. It is about supporting Glasgow’s largest manufacturing industry, which has always been a vital engine in the west of Scotland’s economy. Not only will the deal with Norway directly sustain more than 2,000 jobs at the Govan and Scotstoun shipyards, providing a stable workload for the next 15 years; it will cascade work to 103 businesses across the shipbuilding supply chain in Scotland. Together, those businesses support more than 12,000 jobs in this country.

Like many Glaswegians, I come from a family with a proud history of working in the Clyde shipyards. My dad, my uncle and my granddad all worked in the shipyards, going right back to the building of the Queen Elizabeth 2 in the 1960s. I recall the pride of launch days, sitting on my dad’s shoulders, looking at those vast ships being launched into the river and hearing the clatter of the drag chains, but I remember that pride in the industry and the achievement of our families being overshadowed by the fear that the ship that my dad was building would be the last one—the precarious nature of shipbuilding in the 1990s meant that there was a sense that every ship might be the last one. When my dad eventually lost his job, I saw his purpose ripped away from him and the devastating effect that that had on my family. That is the source of my motivation to play my own part in reviving Glasgow’s shipbuilding industry.

The United Kingdom Labour Government shares my ambition for reviving the industry right across Scotland. The £10 billion deal with Norway represents the largest shipbuilding export deal in our country’s history. It will give people across Scotland confidence that shipbuilding has a secure future, giving young people confidence that a career on the Clyde will be a prosperous and fulfilling one, working on some of the world’s most complex engineering projects. I am hopeful that the Norway deal will also signal to other countries that Scotland is leading the way with its specialist naval shipbuilding capabilities. Indeed, a United States Navy delegation, led by the US Secretary of the Navy, was on a tour of the Clyde shipyards this week. The delegation was hugely impressed with how far ahead we are in skills development and facilities investment, with that confidence in long-term orders.

We should seize this generational opportunity to reposition Scotland as a leading force in world shipbuilding again, leveraging the critical mass of the naval shipbuilding programme to drive commercial shipbuilding growth too. It should be a springboard for growth, not just a hammock where we can get complacent. This Government’s decision earlier this month to scrap its ridiculous ban on support for naval shipbuilding is a welcome first step to grasping the opportunity that the deal with Norway represents for the nation. However, there are still deep concerns in the industry that the new policy amounts to a shadow ban of defence firms. Industry tells me that greater clarity is needed from the Government on its new policy.

Although the UK Government is backing Scottish shipbuilding, the Scottish Government’s outdated, laissez-faire public procurement policy is handing an unfair advantage to state-supported overseas competitors. It is frankly absurd to export Scottish skilled work and jobs to shipyards in Poland and Turkey by awarding contracts for CalMac ferries to them rather than to Scottish shipyards that can do the job. It leaves one with the impression that the Norwegian Government seems to have more confidence in Scotland’s shipbuilding capabilities then this Scottish National Party Government has—that is the reality.

We need a specific shipbuilding strategy for Scotland, and at the heart of that strategy must be a change to Scottish public procurement law to include a mandatory social value weighting in tenders for shipbuilding programmes. That would ensure that Scottish ships are more likely to be built in Scotland. Take, for example, the current procurement process for the two new freight flex vessels that will serve the Aberdeen to Kirkwall/Lerwick route. Four shipyards have been invited this week to tender for the contract: two in Turkey and two in China. Why are the Scottish Government-owned Ferguson Marine, Babcock in Rosyth, or Harland & Wolff not in contention for that £200 million contract? The irony is that the only work that is keeping the lights on at Ferguson Marine today is the subcontract steel work fabrication from BAE Systems for the type 26 frigates. Even the promised capital investment to improve Ferguson’s antiquated shipyard has not yet been made, despite it taking years to install critical equipment such as a panel line.

Although the UK Government’s national shipbuilding strategy sets out that a minimum 10 per cent social value weighting should be applied to evaluations of all new shipbuilding competitions, the Scottish Government has no equivalent. It considers only quality and price, which means that, as we have just heard during First Minister’s questions, Scottish firms often do not even bother to tender for the work, fully aware that they cannot compete with the competitive shipbuilding finance provided by state investment banks in Spain, Turkey, Poland and China.

I also note that the minister mentioned size. If Ferguson Marine leased the Inchgreen dry dock, it could easily assemble the ship for the northern isles project.

The tender for the Northern Lighthouse Board vessel replacement project was won by Gondán, a Spanish shipbuilder. Although BAE and Ferguson Marine were invited to tender for that contract, they withdrew shortly after being informed that they were among the six suppliers to be selected, and for the following reasons. BAE said that a UK-based social value consideration was not regarded as essential in responding to the tender and Ferguson’s said that the Northern Lighthouse Board’s stated position on economic and social impact scoring would make no distinction between impacts in the UK and other countries, weighting apprentices in foreign countries the same as those at home. That is crazy.

I asked the Scottish Government to accept the UK Government’s generous offer of a legislative consent memorandum to update Scottish public procurement law and to introduce mandatory local industrial social value weighting in all public procurement competitions. There is a real opportunity for Scotland to build on that £10 billion contract with Norway. If we are to rejuvenate Scotland as a leading shipbuilding nation, we must use the Scottish National Investment Bank to remove the financial barriers that impede Scottish shipyards from competing with those in Turkey, Poland and China and must add minimum social value weighting to all tenders.

This is personal, not political, for me. One of the main reasons why I am here in this Parliament is to help Scottish shipbuilding succeed and I hope that the whole Parliament can agree with that endeavour.