Defence Industry and Shipbuilding

Ronnie Cowan Excerpts

Wednesday 11th July 2018 Commons Chamber

[Ronnie Cowan (Inverclyde) (SNP)]

The 1980s will be ancient history for many Members, but the destruction of Clyde shipbuilding during that period remains a living, breathing part of political debate in the west of Scotland. I know that many Conservative Members will roll their eyes and think, “Oh, here we go: Thatcher and shipbuilding again.” I remind them that in October 1984, the male unemployment rate in the Greenock central area was 35%. The economic shock of Thatcher’s abandonment of shipbuilding left a deep wound that we are still trying to heal.

Since 1981, Inverclyde’s rate of depopulation was proportionately higher than that of any other local authority area in the United Kingdom, and it is projected to decline for at least two more decades. That is the UK Government’s shipbuilding legacy in Inverclyde. That is why decisions made in allocating shipbuilding contracts are so important—they can make or break communities.

The Defence Secretary needed only to visit Inverclyde to see the terrible cost of removing Government support for vital manufacturing industries, including defence shipbuilding. Many of my constituents are still angry about what happened. There is still an historical obligation to the area, which the UK Government have not fulfilled. In 1976, the UK built 134 vessels. By 2011, just four were produced by our shipyards. How different that figure might have been had the UK Government guided the industry towards a more sustainable future.

Thankfully, with the assistance of the Scottish Government, one shipbuilding yard remains in Inverclyde: Ferguson Marine. Earlier this year, Ferguson Marine bid as part of a consortium for work relating to the Type 31e frigates. Last week it successfully led a European consortium in a bid for EU funding to produce the world’s first hydrogen-powered ferry. It is not a company that is afraid to move with the times. The tendering process for the fleet solid support ships is another opportunity for Ferguson Marine to show that Clyde shipbuilding is the best in the world.

We know that the MOD goes some way towards agreeing with that assessment, as its recently published report stated that Scotland was renowned for building “the world’s finest warships.” Yet despite that, the UK Government refuse to give those same shipyards a vote of confidence by making the FSS tendering process UK-only. Building in the UK benefits the UK more than building abroad. Building ships in the UK means that the taxpayers’ money of all the hard-working men and women of the United Kingdom is reinvested in protecting their jobs. And guess what? They then pay tax to the UK Government and spend their money in their local economy. The knock-on effect is that the prosperity of the entire area improves. Beyond that, shipbuilding companies with a longer order list can invest in the long-term future of their yards, and that was exactly what they did not do in the 1970s and 1980s.

It is the UK Government’s duty to invest in the UK shipbuilding industry and give it the confidence to take on apprentices and to invest in training its workforce. If we build these ships in another country, the employees’ tax is lost to us, as is the spend in the local economy and the opportunity for investment in the yards. UK yards can barely survive and are living from hand to mouth. They certainly cannot prosper, and ultimately they will fail. We must learn from the lessons of the 1970s and 1980s. The UK Government must not turn their back on the shipbuilding industry again, as they did in the ’70s to the coalminers and the steelworkers.

In 2012, the UK Government issued the contract for the MARS tankers to a South Korean company, Daewoo. UK taxpayers were subsidising Korean shipyards. Why risk making that mistake again? I have heard it argued that if we allow countries across the globe to bid for UK work, UK shipbuilders will be able to bid for work across the globe. Well, not if they don’t exist they won’t, not if their workforce don’t possess the necessary skillsets they won’t, and not unless we have first nurtured a strong, vibrant shipbuilding sector in the UK they won’t.

The UK Government are desperately trying to find an excuse to justify the fleet solid support ships contract not involving a UK-only tendering process. It is almost as if they are trying to convince the country that they can do trade deals abroad, particularly with countries outside the EU27. Surely a UK Government who genuinely cared about domestic shipbuilding would be trying to find an excuse to give UK yards the best possible chance of success, not laying obstacles in their way and threatening a successful outcome. The excuse we have heard regurgitated over and over is that the FSS should not be seen as warships and that the tendering process should therefore be opened up to international competition. This is despite the fact that these vessels will be armed and that the Royal Fleet Auxiliary provides operational support for counter-terrorism and counter-piracy operations.

Other European states have procured internally for similar auxiliary vessels. In some instances, they did not open up their tendering process to the international market. The proposed FSS builds do not need to be put out to tender under EU rules or any other rules, yet the UK Government shrug their shoulders and say there is nothing they can do. Shipyard workers in my constituency have a right to feel angry and to be frustrated by the UK Government’s complacent attitude. I urge the Minister to think again and to give as much support as possible to shipyards such as Ferguson Marine in my constituency. They are ready, willing and able. Their workforce will pay their tax and spend money in the community, and their senior management team will be able to invest for the long term in the future of shipbuilding on the lower Clyde. This and only this will guarantee a growing and stable workforce for generations to come.