Shipbuilding and Ferguson Marine Engineering Ltd Insolvency

Iain Stewart Excerpts

Tuesday 2nd November 2021 Commons Chamber

[The Parliamentary Under-Secretary of State for Scotland (Iain Stewart)]

May I begin by congratulating the hon. Member for East Lothian (Kenny MacAskill) on securing this debate? I will turn to the important points and questions that he has raised shortly, although I do have to say at the outset that they are for the Scottish Government, and not for me, to answer.

I first want to put this debate in the context of shipbuilding in Scotland more generally. As a global trading island nation with a proud maritime history, shipbuilding is an important part of our industrial identity. Scotland, like every part of the United Kingdom, offers much to our security, sovereignty and prosperity and plays a critical role in the collective defence of our region and global interests.

My Department has been working closely with the Ministry of Defence to deliver on our ambition to support military shipbuilding in Scotland, and the industry there currently benefits most from MOD expenditure. The Secretary of State for Defence, in his role as ship- building tsar, is acutely aware of the value of shipbuilding in Scotland. He is leading work across Government to deliver on his vision to support industry across the Union, enabling it to become more productive, innovative, and competitive.

UK naval shipbuilding is currently centred around BAE Systems’ Scotstoun and Govan shipyards and Babcock’s Rosyth shipyard, which also have strong naval export markets. These yards are producing the Type 26 and Type 31 frigates—two crucial naval procurements. Three of the Type 26 ships—HMS Glasgow, HMS Cardiff and HMS Belfast—are under construction on the Clyde. Manufacture of these new, highly capable ships is securing about 1,700 skilled shipbuilding jobs in Scotland and some 4,000 jobs throughout the supply chain across Britain until 2035.

On 23 September 2021, the shipbuilding tsar officially cut steel for HMS Venturer, the first of the Royal Navy’s Type 31 frigates, during a ceremony held at Rosyth dockyard. The event marks a significant milestone in the programme for the Royal Navy, defence and shipbuilding in Scotland, with all five vessels to be built by Babcock on the firth of Forth at an average production cost of £250 million per vessel. The Type 31 contract, awarded in November 2019 and to run until 2028, has led to a £71 million infrastructure investment for the dockyard and sustains 130 apprenticeships and 20 graduate positions.

Last month, my noble Friend the Minister of State, Baroness Goldie, had the opportunity to speak with some of Babcock’s current apprentices to hear at first hand how their academic interests in science, technology, engineering and maths have led to a career in defence manufacturing. Since March 2020, Babcock has supported approximately 300 apprentices, mostly from the local area of Dunfermline and West Fife. My right hon. Friend the Secretary of State for Scotland recently visited the Govan shipyard, where he was briefed on the Type 26 programme by Simon Lister, head of BAE’s naval ships business, and had the opportunity to engage with employees and trade union representatives.

Our national shipbuilding strategy refresh will be published later this year. It will set out how the Government intend to set the conditions for success in the UK shipbuilding industry, both domestically and for exports, and how the Government will work with the industry to create lasting transformation. Scottish yards are likely to benefit from the new investment in the Type 32 multi-role ocean surveillance and multi-role support ships, and in Royal Fleet Auxiliary landing ship conversion. The shipbuilding strategy refresh will set out how the Government will provide further support to industry on exports and how we will engage with overseas partners to secure export successes. Indeed, my noble Friend the Lord Offord was in India just the other week, helping to explore the potential for future export orders.

A regular drumbeat of design and manufacturing work in UK yards is needed to maintain the industrial capabilities that are important for UK national security, and to drive efficiencies that will reduce longer-term costs in the shipbuilding portfolio and help to secure further export success. A stable pipeline of orders, as the hon. Gentleman has indicated, is clearly necessary to build and maintain a skilled workforce.

[Ronnie Cowan (Inverclyde) (SNP)]

It is good to see a debate taking place in this House on a company based in my constituency of Inverclyde. In fact, the three companies —CMAL, Caledonian MacBrayne and Ferguson—are all based in Inverclyde. It would have been nice to have been notified that this debate was going to happen. I would have expected that courtesy to be extended to me by the hon. Member for East Lothian (Kenny MacAskill).

I share the Minister’s optimism for British shipbuilding. Look at what we are building with Ferguson Marine, after all the troubles it has had—yes, it has been a stormy journey, but it will be retooled, and have new shedding and a re-energised workforce, with 40 apprentices working out of there. I could not have said that five, six or seven years ago. My hope for Inverclyde and for Ferguson Marine is a successful and buoyant future.

[Iain Stewart]

I thank the hon. Gentleman for his intervention, although I am afraid it is not for me to intervene on a family feud, if I can put it that way, with the hon. Member for East Lothian. I am well aware that there are traditional courtesies, which should be maintained.

I am glad to hear that there is optimism in the constituency of the hon. Member for Inverclyde (Ronnie Cowan). I had the pleasure of visiting Greenock—I do believe that I gave him due notice of that—particularly to look at the new ocean liner terminal, which I hope will bring increased tourist footfall to his part of the world.

It is clear that the UK Government recognise and will show our support for the future of shipbuilding in Scotland through all the means that we have available—namely, in the form of military spending and support.

Let me turn to the points raised by the hon. Member for East Lothian. I am well aware of the challenges of providing reliable ferry services, particularly to the rural and island communities in Scotland, but when the UK Government have received various representations on the lack of suitable ferries in Scotland, we have been firmly told by the Scottish Government that this is a process for them and not for us.

[Kenny MacAskill]

Does the Minister accept that procurement, liquidation and administration are aspects of company law that are reserved to Westminster? On that basis, is he prepared to meet me to discuss the concerns that I and many others—not simply in Inverclyde, but in Scotland—have about the process that has taken place? The responsibility for ordering the services and the payment for the ships might be Scotland’s, but, as I mentioned with regard to the Institute of Chartered Accountants in England and Wales, the law under which procurement and administration is carried out is reserved to Westminster.

[Iain Stewart]

Indeed, the framing of company law is a reserved matter. I would need to take advice from officials, if the hon. Gentleman will allow me, as to whether a breach of that law was a reserved matter or, as I suspect, more a devolved one.

[Douglas Ross (Moray) (Con)]

We have been discussing reserved issues and devolved issues tonight. That is something that pupils at Logie Primary School will be looking at this week through UK Parliament Week. Will the Minister congratulate the young people at Logie Primary School, and the staff, on their interest in UK Parliament Week? I will be seeing them on Friday and I am sure one of the questions I might get asked is, “How do you get a mention of Logie Primary School in UK Parliament Week into an Adjournment debate about shipbuilding?”

[Iain Stewart]

I am happy to say that my hon. Friend has given them a masterclass in how to do that. Referring back to the subject of this debate, I very much hope that among the pupils at Logie Primary School we will see future mariners, shipbuilders, engineers and technicians. I wish them all very well in their future endeavours.

I was surprised to see that the procurement of these new ferries to Islay did not include Ferguson Marine in the tendering process. The delays of the two ships currently under construction may well have played a part in that, but again, it is not for me to comment at this stage. It is very disappointing, given the maritime history on the Clyde in Scotland, and its shipbuilding history more generally, that these ships could not be included and are being lost to overseas orders. But, as I say, these are matters primarily for the Scottish Government to answer, and the hon. Member for East Lothian should pose them to his former colleagues in Holyrood and the Scottish Government. From the UK Government’s perspective, we are investing in the future of Scottish shipbuilding. That demonstrates the strength of our Union, and I hope to see many more ships built on the Clyde.

Question put and agreed to.