Oral Answers to Questions

Debate between Nick Harvey and Iain McKenzie

Monday 11th June 2012 Commons Chamber

[Mr Iain McKenzie (Inverclyde) (Lab)]

13. What assessment he has made of the potential effect of independence for Scotland on Royal Navy construction projects.

[The Minister for the Armed Forces (Nick Harvey)]

The defence industry in Scotland, particularly shipbuilding, plays a key role in equipping and supporting the UK armed forces. Defence contracts sustain thousands of skilled jobs and generate billions of pounds for the economy of Scotland. The Government greatly value the highly skilled work force in Scotland. Although the Government are not making plans for separation, as we are confident that the Scottish people will continue to support the Union in any referendum, it is worth noting that the UK has not had a complex warship built outside the UK since world war two. Were we to do so in the future, companies in a separate Scotland would, of course, be free to compete for those contracts, along with international bidders. However, any exemption from EU rules governing public procurement contracts would apply only to warships ordered from our own national yards.

[Mr McKenzie]

The Minister has made very clear the position of Scottish shipyards, should separation for Scotland take place. Can he clarify the position for suppliers of fixtures and fittings based in Scotland when applying for contracts, if those contracts are given to English shipyards?

[Nick Harvey]

The way the EU rules work is that if a Government declare something to be warlike, they can claim an exemption from the EU competition rules on the basis of national security. In the case that the hon. Gentleman describes, those contracts would be non-warlike and would be subject to normal competitive rules. Scottish companies would have to win against global competition.