Defence Industry: Scotland

Chris Stephens Excerpts

Tuesday 30th April 2019 Westminster Hall

[Ged Killen]

I completely agree with my hon. Friend, and later in my speech I will make the point that making short-term decisions without looking at the whole picture is inherently flawed.

[Chris Stephens (Glasgow South West) (SNP)]

The hon. Gentleman is making an excellent speech. Does he agree that one of the UK Government’s strangest decisions is to tender internationally for fleet support ships? If it were decided that they should be built in the UK, that could benefit shipbuilding not just in Scotland, but across the UK.

[Ged Killen]

I absolutely agree with the hon. Gentleman. I will touch on that point later in my remarks.

Although we must continue to support shipbuilding, the UK and Scottish Governments must focus on diversifying and deepening the defence industry in Scotland to ensure that there will always be a base for the high-skill and high-value roles associated with the industry—that is eminently achievable. Scotland is well placed to be a home for a variety of new industries. With strong universities and a history of manufacturing and design excellence, we are ideally placed to take advantage of the large demands of the UK’s defence. This debate gives Members the opportunity to discuss future high-growth areas and draw attention to the advantages of increasing diversity in the defence industry. For my part, I will touch on two high-growth areas: space and land vehicles.

Glasgow in particular has become a pioneering centre for the deployment of microsatellites, producing more satellites than any other city outside the United States. As future defence concerns rely increasingly on the gathering and analysis of information, significant space assets will be vital to the day-to-day operations of the armed forces in both military and non-military operations.

The space sector has huge potential for future growth. Year-on-year growth in the sector has been five times greater than in the wider economy since 1999, and the sector has tripled in value since 2000. Each new job in the space sector adds £140,000 of added value per employee, and the overall sector receives 36% of turnover from exports.

--- Later in debate ---

[Ged Killen]

My right hon. Friend will not be surprised to know that we have different views on Britain’s membership of the European Union. I largely consider that we are kicking ourselves out of the EU and should accept the consequences of that, although I regret the impact that it will have on projects such as Galileo.

Further to the space sector, the construction of advanced land vehicles offers an excellent opportunity for the expansion of the defence industry in Scotland. Glasgow now hosts an armoured vehicle centre of excellence, which was set up by defence company Thales. The centre aims to provide the MOD with an excellent new resource for the development of armoured vehicles.

Thales is currently bidding for the MOD’s multi role vehicle-protected programme which, if successful, would see 50 highly skilled engineering design and manufacturing jobs brought to the Glasgow site, and the possibility of 30 additional jobs created over the programme’s lifetime. Thales has said that if it is selected for the MRV-P and as the UK design authority and integrator for the Boxer and its variants, 100 new jobs could be created directly, while 180 jobs could be created through supply chains and around 200 further jobs could be supported indirectly.

Such programmes are vital for expanding the diversity of the defence industry in Scotland and introducing new skills, as well as deepening the existing skills base. A great example is my constituent Stewart Macpherson, an employee at Thales Glasgow who has been chosen as one of the top 30 electronics engineers under 30 in the UK.

Encouraging and supporting new skills and professionals is a great benefit of defence investment, so I should be grateful for an update from the Minister on the progress towards reaching a decision on the MRV-P programme. I appreciate, however, that he may only be able to reveal certain information as some might be commercially sensitive.

[Chris Stephens]

I again thank the hon. Gentleman for mentioning Thales, which is based in my constituency. Does he agree that if Thales is successful in obtaining the contract, the economic benefits for the whole Glasgow area—including for my constituents and his—would be considerable?

[Ged Killen]

I absolutely agree. Recently, when I visited the site, I was pleased to see how many of my constituents are employed there.

I am disappointed about the previous actions of both the UK Government and, to a certain extent, the Scottish Government. The recent failure by the UK Government to support the construction of the fleet solid support vessels, as mentioned in this debate and many other times in this place, shows completely misplaced priorities. Ill thought-out changes to Government tendering rules redefined the vessels, meaning that the ships will not fall under article 346 of the treaty on the functioning of the European Union. That opens UK shipyards to subsidised international competition and puts jobs and the potential investment in shipyards such as Rosyth at risk.

What is more, that situation was wholly avoidable, with the decision being made completely unilaterally, yet possibly writing off highly skilled, highly paid jobs that could return £2.3 billion in revenue to the Treasury while providing sustainable employment and an increasing skills base. I therefore urge the Government to think again about that, and to follow the Labour party’s lead by advocating that such ships are built in the UK. The case of the fleet solid support ships signals a Government who are far more interested in achieving in-year cost reductions than in looking at the whole picture.

--- Later in debate ---

[Stephen Kerr (Stirling) (Con)]

It is a pleasure to serve under your chairmanship, Mr Hollobone. I congratulate the hon. Member for Rutherglen and Hamilton West (Ged Killen). He spoke very well, with passion and conviction, and thoughtfully. I was delighted with the tone that he set for the debate.

I wish to take us in a slightly different direction with public policy in the defence industry and on diversification, because I wish to refer specifically to the Scottish Trades Union Congress campaign to set up—or to encourage the SNP Scottish Government to set up—a defence diversification agency. That approach to defence diversification, rather than the one in the hon. Gentleman’s thoughtful speech, is simplistic and frankly regrettable. Not only is the point of view that the Government are best placed to tell business how to operate mistaken and misguided, but the ideologically blinkered way in which the left approaches this vital area of public policy is lacking.

I would not often choose to quote from the Morning Star—frankly, I have not often even perused a copy of it—[Interruption.] I know that Opposition Members are disappointed to hear that I am not a regular subscriber. On 15 May, it ran a story on the vote at the STUC annual congress calling on the SNP Government

“to establish a Defence Diversification Agency to promote a ‘fair and sustainable shift’ away from nuclear weapons.”

Continuing to quote the Morning Star—the first and perhaps only occasion on which I will do so—the report went on:

“But professionals’ union Prospect and general union GMB opposed the motion, saying it sent the wrong message to defence workers.

GMB Scotland delegate John Dolan, a Scotstoun shipyard convener, said: ‘This motion is not in the real world of work.

‘These people have worked in these industries for years, keeping you, your children and your grandchildren safe.

‘How many jobs have been created by defence diversification?

‘This is a con. Where is the Saudi Arabia of renewables we were promised 10 years ago by Alex Salmond and the SNP government?’”

I do not know John Dolan—perhaps other Members present do—but I want to repeat a line of his, because it is important:

“These people have worked in these industries for years, keeping you, your children and your grandchildren safe.”

I agree with the statement made by the hon. Member for Rutherglen and Hamilton West in his opening speech that we should be proud of the defence sector in Scotland. As he mentioned, UK defence spends £1.6 billion with Scottish industry each year, supporting at least 10,000 high-value jobs in the Scottish economy.

[Chris Stephens]

The hon. Gentleman may be interested to know that if he buys the Morning Star today, he will find a column in the name of my good self on blacklisting, which I recommend to him. I suggest that if he is, as he claims, so concerned for the views of shipyard workers on the Clyde and what they are saying at the Scottish Trades Union Congress, he listen to them and support their argument that the fleet’s solid support ships should be built in the UK and not be put out to international competition.

[Stephen Kerr]

I am not at all surprised that the hon. Gentleman writes a column in the Morning Star. I would have been disappointed if he had said anything other than that. Of course I wish that all the defence contract work available should remain in the UK, support high-value UK jobs and advance our technical expertise in shipbuilding. I have no doubt that the Minister will address that issue when he responds.

I pay tribute to the people who work for businesses that have invested in Scotland such as Babcock, BAE Systems, Leonardo, Thales, Raytheon, Rolls-Royce and others. All those major contractors and others are operating in Scotland. I have heard Members of this House speak of those businesses in disparaging terms. I want to make it clear that if any Member of this House does not want those businesses and their workers in their constituency, I will be absolutely delighted to have them come to Stirling. Stirling has a long association with our armed forces, and a proud connection with our servicemen and women and those who support them in the supply chain that those industries represent. That connection is symbolised by Stirling castle.

I do not know John Dolan but he captured some of the pride of the people who work in those industries. I am proud of that workforce, such as those at Her Majesty’s Naval Base Clyde at Faslane, many of whom are my constituents. If I could, I would say to each of them, in the words of Mr Dolan, “Thank you for keeping me, my children and my grandchildren safe. Thank you for defending our country and our freedoms. Scotland is proud of you.” In my constituency, defence contracts support many jobs, especially at FES, which is a principal electrical contractor and works on the new Navy ships that are being built on the Clyde. Emerson also has significant defence contracts. FES has made a huge investment in its apprenticeship programmes and runs its own academy. Hundreds of skilled electricians have benefited from FES’s commitment to them and the Ministry of Defence’s commitment to Scotland.

Some on the left approach this issue from a pacifist viewpoint built on deeply held beliefs. I respect that. Others on the left, such as the hon. Member for Rutherglen and Hamilton West, are more pragmatic and see the high-value jobs that are done as a vital strategic part of the Scottish economy. The position of the SNP is far more craven. It knows that the defence sector would be destroyed in the event of independence, as the hon. Gentleman outlined. SNP Members use defence diversification as a way of distracting people, because the truth is that they do not care much about jobs or about defence; they just care about independence, as was seen in their conference in Edinburgh at the weekend. According to that separatist vision, Scotland’s workers, savers and pensioners would give up the pound for a valueless currency yet to be named, and no frigates would be built on the Clyde if they ever got their way.

[Chris Stephens]

I find it extraordinary that the hon. Gentleman accuses me and others in the SNP of not caring about defence jobs, given that I meet the shop stewards in the Clyde shipyards on a regular basis and they know my views. Would he care to withdraw or clarify what he suggests? He was pointing at me when he made those outrageous remarks.

[Stephen Kerr]

I am not sure I was specifically pointing at the hon. Gentleman. Let me be absolutely clear: those who espouse separatism in Scotland know that the consequences would be the loss of those jobs and the technology, know-how and added value that goes with them. They know only too well that Scotland would not have a Royal Navy.