Shipyards: Economic Growth

John Grady Excerpts

Tuesday 18th March 2025 Westminster Hall

[John Grady (Glasgow East) (Lab)]

It is a pleasure to serve under your chairship, Ms Jardine. I congratulate my hon. Friend the Member for Glenrothes and Mid Fife (Richard Baker) on securing this important debate. He spoke very knowledgeably about the topic, and his incredibly successful work to secure the future of the Harland and Wolff yard in Methil demonstrates what a conscientious, hard-working fighter for his community he is. I am proud to call him my friend.

Shipbuilding is a growth industry. Between 2019 and 2024, the economic output of the shipyard sector in the UK increased by 72%—I wish we could say that about much more of the British economy. There are almost 39,000 employee jobs in that industry in the UK, with 19% in Scotland, so it is an industry that we must get behind. It is central to Glasgow and the Clyde region. As everyone knows, Glasgow has a proud history of shipbuilding. At one point, more than 100,000 people were working in 38 yards along the Clyde; at the turn of the last century, almost one in four boats sailing in the world was built on the Clyde, so shipbuilding is in Glasgow’s blood. The number is much lower now, but like any Glasgow MP, I have constituents who depend on the shipyards on the Clyde for work, and they make a significant contribution to Glasgow’s economy.

We have world-class defence shipyards. We have two shipyards on the upper Clyde and they are operated by BAE Systems. They have a long history of developing first-class ships for defending the United Kingdom, and the new Type 26 frigates at the dockyards will do the same. This creates wealth across Glasgow, including in my seat. We also have a brilliant maritime education sector in Glasgow, and much of this is in my seat, on the Clyde. City of Glasgow college, trains craft apprentices for the BAE Govan and Scotstoun shipyards, and BAE has a brilliant on-site skills academy. City of Glasgow college also trains very many merchant navy officers in the UK, and many of those involved live in my seat, including in the Gorbals, as I find regularly when I knock on doors.

We need to keep warship building work in the UK. Make no mistake: this is essential for national security. We may wish for the world to be different, but we have to take it as it is. Skills in military and domestic shipyards are very important as we face this unpredictable world.

Civilian shipyards could also provide great opportunities in Glasgow, such as in renewable energy. Of course I would like to see Government support for shipbuilding, but it has to be deployed wisely. Taxpayers and the wider economy expect that money to be deployed wisely. Regretfully, that has not been the case with the SNP Government, who own the Ferguson Marine shipyard in Port Glasgow, just along from my constituency. They have spent more than £500 million on two ferries, which are hundreds of millions of pounds over budget. They nationalised the yard in 2019, but despite it being state-owned, Audit Scotland in December 2024 raised very serious concerns about governance at the yard. It said:

“Internal audit has not been able to provide assurance on FMPG’s risk management, control and governance arrangements”

and other matters.

Yesterday, we learned that Ferguson Marine had lost out to a shipyard in Gdańsk on a £175 million contract to build vessels for the Scottish Government. My hon. Friend the Member for Inverclyde and Renfrewshire West (Martin McCluskey) is entirely correct that the Scottish Government have prioritised opportunities in Poland over those in Port Glasgow. The outcome of six years of SNP control of that shipyard is hundreds of millions of pounds wasted; it is an absolute scandal.

The SNP Government have failed the people of Port Glasgow—some of the most deprived communities in our family of nations—while wasting hundreds of millions of pounds of taxpayers’ money. Port Glasgow desperately needs good jobs, as does the whole of the Clyde region and Glasgow, and we should be incredibly angry at that SNP scandal. That is another SNP Government failure: they have failed Glasgow and the Clyde region on shipbuilding, education, health, transport and economic growth. After 18 years of the SNP, Scottish shipbuilding and Scotland need a new direction.

--- Later in debate ---

[Sarah Jones]

I thank the hon. Member for that intervention. He mentioned the importance of the £55 million that has gone to Cromarty Firth. Of course, we need to ensure, when looking at supply chains in whatever the industry, we do what we can to rebuild British jobs. In quite a few of our manufacturing industries over recent years, we have seen a slow decline, which we are keen to turn around.

I am working on the steel strategy, where we have a £2.5 billion fund that we committed to in the general election, on top of the £500 million that will be going, if delivered, to the Port Talbot work with Tata. That is a lot of taxpayers’ money; we want to ensure we are spending it wisely and that we are using the levers of Government, whether in procurement or other matters, to ensure that we are building as much as we can in the UK. We obviously have to be cognisant of laws around procurement and need to look at it carefully. It is an ambition of the Government that we make things in the UK and use supply chains here as much as possible.

I am sorry about the decision that was made in Scotland. I am also sorry that there is no one here from the SNP to make their case. We will do what we can with procurement to ensure we make the right decisions. We talked about shipbuilding and shipyards and the importance—

[John Grady]

On the topic of SNP Members being away—perhaps they are all listening to “Desert Island Discs”, although one would not reach the desert island if the SNP were in charge—many of my constituents have family, friends and loved ones on the Scottish islands, but at many times of the year they have terrible difficulty going to see them because of the appalling ferry service. That is because the age of the fleet has increased significantly during the 18 years that the SNP has been in power and the reliability of the vessels is down, which damages businesses, people trying to go to hospitals or travelling, and industry on those islands. Does my hon. Friend agree that the way the SNP has managed the ferry service in Scotland over the last 18 years is utterly contemptible?

[Sarah Jones]

I thank my hon. Friend for his intervention and I will bow to his wisdom as to why and how that situation has transpired, but for sure the ferry service is crucial for people’s lives, wellbeing and health. As my hon. Friend the Member for Isle of Wight West (Mr Quigley) said, a ferry service is not just about identity; it is also about basic necessities and lifelines. So, I agree with my hon. Friend that there does not appear to have been good management of the ferries by the SNP, but sadly we are not overly surprised by that.

There were lots of good contributions to the debate about the role that shipbuilding can play and about some of the issues that we need to look at. We have talked a lot about defence. I know that my hon. Friend the Member for Glenrothes and Mid Fife, who secured this debate, has about 350 workers in his constituency who work for Babcock and we are really pleased that the Government have committed to the 2.5% spending on defence going up to 3%. I have talked to the Minister for Defence Procurement and Industry, and of course we all think that the increase in defence spending presents an opportunity to do more here in the UK. I am working with colleagues to make sure that we get that right.

The whole point of the industrial strategy, which the Conservative party was ideologically opposed to, is to bring together the things that we do really well and ensure that all the levers of Government are tilted in the direction of turbocharging those sectors. Defence is one of those sectors, but historically defence has sort of worked to one side and everybody else has worked to another side. We are trying to bring those two together a bit, so that civil and defence can work together, learn with each other and prioritise all that activity from Government, to make sure that, as I say, we are turbocharging those eight sectors, one of which is defence.

There was a lot of talk about apprenticeships. The spokesperson for the Opposition, the hon. Member for Mid Buckinghamshire, talked about the apprenticeships that were set up under the last Government. Sadly, the apprenticeship levy does not work for a lot of people and we have shortages in professions such as welding. Indeed, welders have been on the Migration Advisory Committee list of people who we can procure from other countries because we are not training enough of our own. So, to see those welders in Methil learning their trade was a great thing. It was also great to hear the senior managers at Navantia talk to me about welding, because they actually know about shipbuilding and welding; they have real expertise. That was really encouraging.

We are reforming the apprenticeship levy, we are talking about how we can ensure that companies invest more in apprenticeships, and we are again looking at how we can tilt the whole skills regime towards the professions that we know we will need in the future. Engineers, welders and electricians are all on the list of the professions we need to boost in the future.

Members also talked about the opportunity provided by offshore wind and the green economy, as it were, more widely. As has been said already, Navantia plans to make Methil the centre of excellence for offshore wind manufacturing. There is also green shipbuilding, which is a burgeoning industry, and there is the whole infrastructure of monopiles and floating jackets—all of those possibilities—as well. I have also talked to the industry about the opportunities to lead the way in autonomous systems and robotics.

When we pull together the industrial strategy, the defence spending, our reforms to apprenticeships and our prioritisation of funding, including the Cromarty Firth example, the National Wealth Fund—with £5.3 billion for clean, green energy in five groupings, one of which is ports—and the clean industry bonus, which is another opportunity to support growth in this sector, it is clear that the Government have a plan. That has been lacking in previous years, but we are not afraid to roll up our sleeves and get things done. We are all invested in the shipbuilding industry for reasons relating to the past and, more importantly, the future.

The hon. Member for West Dorset (Edward Morello) talked about women in boatbuilding. I spend quite a lot of time with a lot of men in the industries I work with. That was a good point, well made.

My hon. Friend the Member for Glasgow East (John Grady) made a good point about the importance of spending taxpayers’ money wisely in this space and not throwing good money after bad. I have talked about that already. We need to back winners and use that money as wisely as we can.

I thank the hon. Member for Strangford (Jim Shannon) for his kind words. He made the point that shipbuilding used to employ tens of thousands of people, but now it employs hundreds to a couple of thousand. We are realistic about that. We are talking about a smaller industry because of the changing nature of how ships are built, but it is still very important.

My hon. Friend the Member for North Ayrshire and Arran (Irene Campbell) talked about procurement, which I have touched on already—it is very important. It is nice that my hon. Friend the Member for Glasgow West (Patricia Ferguson) saw the electric ferry bought in Norway, for Norway, but that speaks to a point that we are all looking at: we want do more in the UK.

My hon. Friend the Member for Isle of Wight West said that shipbuilding is a lifeline, a kind of identity and an opportunity for economic growth. I agree with that, of course.

My hon. Friend the Member for Scarborough and Whitby (Alison Hume) mentioned Captain Cook and the Endeavour. I did not know about that, but I now do. She talked about skills and apprenticeships, which I have touched on. She is absolutely right that they are very important.

This is an incredibly important area for the Government. We have put our money where our mouth is and are ready to do what needs to be done. The industrial strategy, the apprenticeship work and the defence spending present huge opportunities for the future, and I look forward to working with everyone here to deliver them.