Shipyards: Economic Growth

Richard Baker Excerpts

Tuesday 18th March 2025 Westminster Hall

[Richard Baker (Glenrothes and Mid Fife) (Lab)]

I beg to move,

That this House has considered the role of shipyards in economic growth.

It is a great pleasure to serve under your chairship, Ms Jardine. I thank all hon. Members for attending the debate, because shipyards and shipbuilding are iconic symbols of the industrial heritage of the United Kingdom. From the Belfast poetry of Carnduff and the folk songs of England, from the north-east to the south-west, to the words of Donald Dewar at the opening session of the re-established Scottish Parliament, evoking:

“The shout of the welder in the din of the great Clyde shipyards”,

they are part of the economic and social history of these islands.

Our shipyards and the industry and creativity of their skilled workers have been sources of pride for local communities that have too often felt a keen sense of loss whenever a shipyard closed, as many did in the course of the previous century. When I was elected in July, the threat of closure for the Methil yard in my constituency was very real. After three centuries of the yard being the beating heart of the local economy, it was clear within days of this Government taking office that Harland and Wolff, seen as the saviour of the yard after the collapse of previous owners BiFab in 2021, was itself in dire financial difficulties.

That was a hugely anxious time, not only for Methil but for other Harland and Wolff yards in Belfast, Appledore and Arnish, in the constituency of my hon. Friend the Member for Na h-Eileanan an Iar (Torcuil Crichton), with whom I shared many challenging meetings on the prospects for the yards. Those were times of stress and worry for the future for all workers at each of the four yards. It was essential that, where the previous Government had not acted, this Minister and her colleagues took decisive action to save the yards. Many of us were relentless in making the case for the four yards, because not only their facilities but the skills and commitment of their workforces are essential for our mission for economic growth.

I want to pay tribute to the workers at the yards and their unions, Unite and GMB, who fought for their future. In particular, I thank the union representatives at Methil yard, Dougie Somerville of Unite and George McClelland of GMB, who worked alongside the yard’s manager Matt Smith to make the case for the yard to be saved. George started working at Methil in 1973, which is even before I was born. His commitment to the yard has been amazing, and it has paid off.

I recognise it was no easy process to secure a deal for Navantia UK to take on all four yards. The Secretary of State for Business and Trade, the Secretary of State for Scotland and the Minister for Industry had to go to great lengths to secure a deal. For the Scottish yards, an important advocacy role was played by the Scottish Labour leader, Anas Sarwar. I was also pleased that there was positive dialogue between UK and Scottish Ministers on the future of the Scottish yards. I hope that spirit of collaboration continues, working together to promote the facilities at the yards.

It was deeply dispiriting to see yesterday’s announcement that the £175 million contract for seven loch-class vessels to serve our island communities had not been awarded to a Scottish yard but has gone abroad. That is highly disappointing for the shipbuilding industry in Scotland. It is a great concern for Ferguson Marine in the constituency of my hon. Friend the Member for Inverclyde and Renfrewshire West (Martin McCluskey). SNP Ministers simply have to show more ambition for Scotland’s shipyards.

[Torcuil Crichton (Na h-Eileanan an Iar) (Lab)]

It is an honour to serve under your chairmanship, Ms Jardine, and I pay tribute to my hon. Friend for raising this subject and particularly for referring to the workforce at Ferguson Marine, who have lost out on that small vessel replacement programme, sending 170 jobs down the Swanee. Those workers were political pawns in a nationalist game, which I guess came to its peak when the First Minister launched a ship with painted-on portholes.

All is not lost because it was only phase one of the small vessel replacement programme that went to Poland this week. There is a phase two, which would provide vessels for my constituency: two ferries for the Western Isles and one for Iona. Surely the answer that the Scottish Government should seek to find is that phase two be rolled into phase one and that a direct award be made to Ferguson’s shipyard on the Clyde, which has experience of building those small vessels. We can save jobs, we can deliver the ferries and we can serve the people of the Western Isles by making a direct award.

[Richard Baker]

I could not agree more with my hon. Friend who, as always, is a doughty campaigner for his constituents. He has also put forward very practical proposals that offer a real way forward to ensure that those vessels are built by Scottish shipyards. We should all be working together to fight for the future of Scotland’s shipyards, so it is a matter of regret, particularly after the announcement yesterday, that we have no Members from the Scottish National party in Westminster Hall for this debate.

The sad news yesterday was in stark contrast to the day of excitement and celebration when the Minister for Industry, who is here today, visited Methil to mark the formal handover of the yard to Navantia UK. Let us hope that in the future we will have joint working and effective collaboration between UK Ministers and Scottish Ministers, and that Scottish Ministers show some ambition for future investment in and contracts for shipyards in Scotland.

Let us be clear that saving the yards is not an act of charity to their workers or the communities they support. The reason it is so important to save these yards is that they have an essential strategic role in promoting economic growth in this country. In 2024, the economic output of our shipyards was £2.7 billion. Between 2019 and 2024, the economic output of the sector increased by 72%, at a time when the overall value of the manufacturing sector declined by 2.4%.

Today, there is so much potential for our shipyards to play an even greater role in growing our economy. The national shipbuilding strategy had already set out plans to deliver a pipeline of more than 150 new naval and civil vessels for the UK Government and the devolved Administrations over the next 30 years. Ports are now one of the five key sectors earmarked for £5.8 billion of investment through the National Wealth Fund. Those plans for investment are all the more important today, as the budget for defence spending increases to enable the UK to fulfil our responsibilities to Ukraine and in other arenas.

[Laurence Turner (Birmingham Northfield) (Lab)]

It is a pleasure to serve under your chairship, Ms Jardine, and I draw attention to my declaration in the Register of Members’ Financial Interests and my membership of the GMB and Unite trade unions.

I thank my hon. Friend for his words about the workers at Arnish and I know that he has played a very important role in advocating for that yard. He talked about the national shipbuilding strategy and defence orders. Historically, all Royal Navy and Royal Fleet Auxiliary orders were fulfilled by UK shipyards. That changed in 2012 when the MARS tanker order was awarded to Daewoo in South Korea. Subsequently, the 2017 national shipbuilding strategy made it an assumption that all such defence orders would be put out to international tender, bar some exclusions. Does he agree that that has been a source of real uncertainty in a sector that needs long-term planning, and that in future any industrial strategy should provide maximum assurance about the pipeline of orders for our domestic shipbuilding yards?

[Richard Baker]

My hon. Friend makes an extremely important and very eloquently argued point. We need to have such security for our shipbuilders and our shipyards, and our procurement strategy must support that agenda. Later, I will say more about how the ambitions about the security of future work at our shipyards that he has just set out can be realised.

It is our shipyards and our shipyard workers who will be crucial in developing our new defence capabilities, including the more than 350 skilled workers from my constituency who work at Babcock in Rosyth, in the constituency of my hon. Friend the Member for Dunfermline and Dollar (Graeme Downie). It is not only in defence that our shipyards have a key role to play in economic growth, but in renewables as well. It is right that Labour’s green prosperity plan highlighted the role of ports in growing our renewable sector.

Navantia’s plan for Methil is that it will become the business’s centre of excellence for offshore wind manufacturing in the UK through Navantia Seanergies, its specialist renewable energy division. Navantia has announced plans to modernise both Methil and Arnish, with advanced fabrication and assembly capabilities, aligning with national commitments to secure domestic energy security while meeting our ambitious energy transition targets. I believe it would make great sense to extend the Forth green freeport area to include Methil and, in doing so, provide important incentives for that vital work.

In addition to yards being centres for renewables infrastructure, the transition towards low-emission ships and sustainable materials presents opportunities for innovation and leadership in environmentally friendly maritime technology. Green shipbuilding can be incentivised through Government procurement, and with the current scale of procurement in shipbuilding, there is also a role for the Government to encourage collaboration between naval shipbuilders, rather than running competitive tenders for each project. Most of all, the huge potential for growth in shipbuilding and fabrication in this country can only be achieved by investing in skills.

We have an ageing workforce in our shipyards, but the prospects today for young people joining the industry are bright. That makes it all the more important that we recruit and train young people in the skills our shipyards need. In Methil, there are plans for comprehensive training programmes, including on-site training at Navantia’s Spanish facilities—when I talked to apprentices on a cold day in Methil, they were right behind those plans—which demonstrate Navantia’s commitment to developing a highly skilled local workforce. It is important that the UK Government, devolved Governments and local skill agencies support that vital work.

One of the moments after the Methil yard was saved I found most rewarding was when Neil Cafferky, an apprentice draughtsman at Methil, had the opportunity to tell the Prime Minister what it meant for him that he would be able to continue his apprenticeship at Methil. Neil studied at Fife College and New College Lanarkshire before beginning his apprenticeship at the yard in 2021. That journey of skills and training has been amazing for Neil, because in 2022, Neil was a finalist in the Scottish Renewables young professionals green energy awards.

Neil is not alone in having a bright future at Methil. Of the 200 workers whose jobs at the yard were saved, 51 are apprentices. They are among thousands in the shipyards across our country. Investing in our shipyards means thousands of young people having the prospect of skilled, well-paid jobs throughout their career, with all the benefits that will bring to them, their communities and their country.

The actions taken by Ministers early in this Government show that they understand the importance of our shipyards in growing our economy. If we seize all the fantastic opportunities we have to grow our shipyards and boost the brilliant, highly skilled workforces that they employ, the story of shipyards in this country is not only one of a proud history, but of a vibrant future as well.

[Christine Jardine (in the Chair)]

Order. I remind Members that they should bob if they wish to be called in the debate and, if possible, keep to an informal five-minute time limit to allow everyone to get in. I call Edward Morello.

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[Jim Shannon (Strangford) (DUP)]

It is a pleasure to serve under your chairship, Ms Jardine. It seems to be a regular occurrence in Westminster Hall now. I wish you well and thank you for all you do.

I thank the hon. Member for Glenrothes and Mid Fife (Richard Baker) for leading the debate. I am very pleased to be here. He mentioned Harland and Wolff, which I will talk about as it obviously plays a critical role in Northern Ireland. For the record, the Minister has played a significant role, along with others, in ensuring that its future is a lot rosier than we thought it would be. We were worried about its future, but the Minister and others have ensured that it looks much brighter.

Shipbuilding has been crucial for the UK for decades. It generates hundreds of thousands of jobs and improves infrastructure between mainland Britain and the devolved institutions. I am honoured and pleased to be here to showcase the success of our fantastic shipbuilding sector. Gone are the days when Harland and Wolff employed almost 30,000 people in Belfast. It is down to about 1,000 or 1,500, but it hopes to grow to 2,000, 2,500 or maybe even more.

In the 19th and 20th centuries, Northern Ireland paved the way in shipbuilding. Some of the world’s most iconic ships were built at the heart of Harland and Wolff in Belfast. Everyone knows of the famous Titanic, probably for the wrong reasons—the tragedy in which all those people lost their lives—but there were also the RMS Britannic and the RMS Olympic. At the time Harland and Wolff, in the neighbouring constituency of Belfast East, represented by my right hon. Friend the Member for Belfast East (Gavin Robinson), was one of the largest, most famous shipbuilding companies in the world. We are proud of that rich history.

I am proud to be able to speak about what Harland and Wolff has done in Northern Ireland and the jobs it has created. The tradition of shipbuilding, although not as big as it was, is still significant within Harland and Wolff across this great United Kingdom of Great Britain and Northern Ireland.

Northern Ireland is and was a global hub for shipbuilding. The sector employs hundreds even today, so it is important that we protect and preserve it, and retain people and give them opportunities. We want to protect and retain shipbuilding skills, including metalworking and engineering.

We are rich in shipbuilding culture for many reasons, including defence, global trade, imports, exports, design and engineering—the hon. Member for Glenrothes and Mid Fife mentioned that in his introduction. In September 2024, Harland and Wolff entered administration for the second time in five years. In January 2025, with the help of Ministers and others, it was announced that the Spanish-owned firm Navantia was to take over ownership, maintaining the core roots of the historic shipyard in Belfast and elsewhere in this United Kingdom.

Maintaining jobs is at the core of any administrative takeover. Many employees who worked in Harland and Wolff before the takeover lived in my constituency and still do. I remember the tradition of shipbuilding even in the small village of Greyabbey, which I lived just outside of. The number of people who worked in the shipyards in the 1960s and ’70s and even in the ’80s was significant, as it was in Newtownards. Like some of those people, employees today are fearful of job losses and redundancy. The Minister has also been involved—for which I thank him—in the Spirit/Airbus takeover. Employees are not in control of which sectors are bought, which poses a massive question mark to their livelihoods, and indeed their futures.

Shipbuilding contributes billions of pounds to the United Kingdom economy, both centrally and through devolution. We continue to export and repair ships and we have a part of the defence contract as well, which we are very proud to have. It massively contributes to the value of our trade and goods. Furthermore, some 36,000 people are employed in our wonderful Royal Navy. Shipbuilding is imperative for our defence capabilities, from defending our overseas territories to protecting our sea trade routes. Without the shipbuilding sector and the staff and people that have made it what it is, success would not be possible. Warships and submarines are built in other areas across the nation, including areas in England and Scotland and in the constituency of the hon. Member for Glenrothes and Mid Fife, who introduced the debate. I am surprised that his colleague, whose constituency I cannot remember, is not here. He has always been very much to the fore in naval debates. I expected him to be here to wax lyrical about what he would do. I can remember his name but not his constituency.

[Richard Baker]

I think the hon. Member might be recalling my hon. Friend the Member for Dunfermline and Dollar (Graeme Downie), who is at this moment at the Rosyth port meeting Babcock. His passion for his community and for that yard is, as the hon. Member knows, very strong.

[Jim Shannon]

I thank the hon. Gentleman for filling in that gap. Hansard will pick up on the constituency and keep it right. The only reason the hon. Member for Dunfermline and Dollar (Graeme Downie) is not here is because he is away doing something very practical in his own constituency, so well done to him.

We must continue to prioritise shipbuilding for the future, so I look to the Minister for the commitment that I know is already there. Just for the record, it is always good to have the reassurance that we all seek. There are steps that the Government can take to provide direct financial support to the shipbuilding sector, both centrally on the mainland and regionally to the devolved nations. Infrastructure development is massively important for the United Kingdom, from our safety right through to the food in our supermarkets. I am old enough to remember things that we used to say in my history class: we are an island built on coal, surrounded by waters full of fish. I am not sure whether that is true any more, but it tells us that the role of ships in connecting our islands is very important.

The history goes back centuries and is something to be proud of. In Northern Ireland it is always great to look back and recollect the successes of our past and still be grateful to this day that shipbuilding is as important as ever, despite being under the control of different companies. It still creates jobs, wage packets and opportunities and helps us grow as a nation.

I will conclude with this. I look to the Minister for her commitment to the industry and to the staff that will ensure it continues for the future. I am pleased to see the Minister, who has shown commitment, in her place. In all the things that I have brought to her attention, I have never once found her wanting, and I am sure we will not find her wanting this time, either.

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[Greg Smith (Mid Buckinghamshire) (Con)]

It is a pleasure to serve under your chairmanship, Ms Jardine. I congratulate the hon. Member for Glenrothes and Mid Fife (Richard Baker) on securing this debate on the often overlooked but critical contribution of great shipyards to our nation’s economic strength, employment prospects and national security. Many hon. Members have spoken with great passion and knowledge about the sector and about yards in their constituencies. My own constituency is a stone’s throw from Leighton Buzzard, which is the furthest point in England from the sea, so I cannot speak with any local knowledge but I absolutely acknowledge the shipbuilding sector’s critical role.

For centuries, shipbuilding has been a cornerstone of British industry, sustaining local economies, providing skilled jobs and securing our place as a maritime power. As we have rightly heard during this debate, the UK’s shipyards have played a dual role—driving economic growth at national and local levels while ensuring our security at sea. Under the previous Conservative Government, decisive steps were taken to secure the future of British shipbuilding and maintenance, including supporting jobs, upskilling our workforce and reinforcing our defence infrastructure. Under the new Government so far, we have seen a more lacklustre set of steps taken towards supporting this sector.

Shipyards are more than just industrial sites; they are economic lifelines for the communities that surround them. For example, in Portsmouth and Govan, BAE Systems surface shipyards have been instrumental in building the Royal Navy’s cutting-edge fleet. The last Conservative Government’s commitment to the Type 26 and Type 31 frigate programmes guaranteed long-term employment and training opportunities for engineers and apprentices. Those contracts not only secured local jobs, but strengthened the wider economy.

In Cumbria, the BAE Systems submarine yard in Barrow-in-Furness has been at the heart of our nation’s defence. Thanks to strategic spending by the previous Conservative Government, Astute-class and Dreadnought-class submarines continue to provide thousands of highly skilled jobs while reinforcing Britain’s nuclear deterrent. That is a prime example of how economic security is directly linked to national security. Spending on our defence industry ensures that we remain prepared for the threats of the future.

In Birkenhead, Cammell Laird has been a stronghold for commercial and defence-related shipbuilding. Contracts secured under the previous Government provided much-needed stability, supporting jobs in the north-west and reinforcing the UK’s ability to maintain its naval and commercial fleets.

One of the most important aspects of shipbuilding is its role in training the next generation of workers. The previous Conservative Government recognised that, and supported and backed apprenticeship schemes that ensured that young people could gain the skills needed to drive innovation in the sector. The workforce at shipyards such as Govan and Barrow-in-Furness includes thousands of highly trained welders, engineers and naval architects. We ensured that their skills were passed down through new training programmes and partnerships with local colleges.

Without continued spending, there is a real risk of losing that expertise to foreign competitors, yet the current Labour Government have failed to provide the necessary assurances to sustain those initiatives. The lack of new contracts, clear strategic direction and industry support has left many shipyards facing an uncertain future.

[Richard Baker]

I share the hon. Member’s ambitions for our shipyard sector. I was recently at the Rosyth dockyard in the constituency of my hon. Friend the Member for Dunfermline and Dollar (Graeme Downie), where the workforce were excited about the future. They were already looking forward to a long order list and now feel in a position for that to grow, given the prospect of increased defence spending. Does the hon. Member agree that the strategic aim set out by the Government provides great opportunities for our shipyards and shipbuilding sector?

[Greg Smith]

That is indeed good news. The Conservative party, as His Majesty’s loyal Opposition, has supported the Government’s increases in defence spending. We moderately disagree on the pace of that increase, because we want to go considerably faster, but I recognise the hon. Gentleman’s point about the good news for that particular shipyard.

I ask the Minister whether, following the defence uplift, the Government will commit to construct all our military vessels in the United Kingdom. The link between economic security and national security cannot be overstated. A strong shipbuilding industry means a strong Royal Navy, ensuring that the UK remains a global maritime power. It also means domestic manufacturing capabilities, reducing reliance on foreign suppliers and keeping critical national infrastructure under British control.

The Conservatives understand that reality. When we were in government, our national shipbuilding strategy was designed to create a steady pipeline of work to provide stability for our shipyards and to ensure that Britain could defend herself in an increasingly unpredictable world. That approach guaranteed not just warships but support vessels, reinforcing our ability to project power on the world stage.

However, the Government’s delay in awarding many new contracts and the absence of a clear vision for the future of UK shipbuilding weakens our defences and threatens those skilled jobs. That threat extends to virgin steel production—a critical component in the shipbuilding supply chain. The Government have failed to negotiate a deal with the United States, whereas we secured the 500,000-tonne tariff-free agreement when in government. The lack of a deal is a real threat to the industry.

Shipbuilding depends on steel production, which is already suffering from Labour’s failure to negotiate. Will the Minister provide the crucial update on talks with the United States that people whose jobs are on the line are desperate to hear? We need urgent action to safeguard our economic and national security interests. Does the Minister have any ongoing concerns, or is she confident in the future of those sites? The Government’s handling of Harland and Wolff when the company needed financial support—it was threatened with administration, and the Government did little or nothing to stop that—was hardly a boost of confidence for the thousands of jobs that depend on the supply chain.

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[Richard Baker]

Thank you for chairing this excellent debate so skilfully, Ms Jardine. I thank Members from across the House for their informed and important contributions. There has been great consensus about the exciting prospects for shipbuilding and shipyards in this country. There is the potential to invest in skills to ensure that they and the workforce are retained in our local communities, so we must build training and apprenticeship opportunities for our young people.

That commitment has been reflected by the actions the Government have taken, including the intervention to save Harland and Wolff and our investment plans to ensure shipyards have a great role in the future. I could not agree more with the points that hon. Members made about the need to invest in shipbuilding in Scotland. I would say that as an MP for a Scottish constituency. Saving the Methil yard was absolutely essential for me.

My hon. Friend the Member for Glasgow West (Patricia Ferguson) said that Clyde-built ships are synonymous with quality and reputation. We have that aspiration for shipbuilding right across the UK. Those qualities are represented by so many shipyards across our constituencies. That is why we should be passionate and confident about the future of our shipyards, and invest in them. It is hugely regrettable that the Scottish Government in the past few months and years have not shown that commitment, or evidence of support, but this Labour Government, in their first months in office, have done so.

We have been through the experience of Harland and Wolff, which the hon. Member for Strangford (Jim Shannon) knows well. He spoke passionately about how it affects his constituents; it is so important to have a Northern Irish voice in this debate. I recall all too well what the Government inherited. Regrettably, the previous Government had done nothing for over a year to save those yards. The prospect of investing in the company as it was then was not realistic, and would only have threatened the yards further in the future. What came forward was a clear strategy that succeeded in saving the yards.

I take onboard fully the fact that there has been consensus across the Chamber that we want to invest in shipbuilding and shipyards; the hon. Member for Mid Buckinghamshire (Greg Smith) shared in that. The Government’s ambitions for shipbuilding and our shipyards are clearly shared across the Chamber. The Liberal Democrat spokesperson, and my erstwhile University Challenge teammate, the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone), spoke very well about that, drawing on his professional as well as his political background. The ambition set out across the Chamber for our shipyards in renewables and defence is very clear. It is an opportunity for us to grasp.

The Government have made an excellent start, and indicated a clear plan for a bright future for our shipyards. I am pleased that the debate has reflected the commitment across the Chamber, from all the parties who were represented, to that ambition for our shipyards and our country. Apprentices, both female and male, will be looking forward to a long and bright future in our shipyards. I think we will all support that over the course of this Parliament.

Question put and agreed to.

Resolved,

That this House has considered the role of shipyards in economic growth.