18 Mar
Westminster Hall
Shipyards: Economic Growth

The Westminster Hall session on shipyards' role in economic growth focused primarily on the historical significance and future prospects of UK shipbuilding. The debate, chaired by Christine Jardine, opened with Richard Baker from Labour representing Glenrothes and Mid Fife, highlighting the pressing need for governmental support in preserving shipyards, especially after the Methil yard faced potential closure. Baker stressed the economic contributions and heritage significance of shipbuilding across the UK, arguing it is pivotal to the national economy and local communities, especially in areas like his constituency which have economically revolved around shipyard operations for centuries.

Key contributors such as Torcuil Crichton and Laurence Turner emphasized the strategic importance of shipbuilding in national defense and economic growth, proposing practical solutions like direct awards for shipbuilding contracts to prevent foreign outsourcing. They criticized the Scottish Government's procurement decisions which favored international yards over local firms, especially noting a recent £175 million contract lost to a Polish company, impacting jobs in Scotland.

72%

From 2019 to 2024, the shipbuilding sector's economic output grew by 72%, underscoring its resilience and strategic importance compared to an overall manufacturing decline.

Backbenchers like John Grady and Jim Shannon recounted the industrial decline's impact on communities, whereas others, including Edward Morello and Irene Campbell, spotlighted how shipbuilding supports local economies and the need to preserve technical skills and crafts. Many speakers advocated for bolstering industry through comprehensive government-backed strategies, especially investing in green and defense-related technologies.

39,000

Total jobs linked to the UK shipbuilding industry, illustrating its role in national employment and economic sustenance.

The Minister, Sarah Jones, closed by acknowledging the efforts undertaken to save key shipyards like Harland and Wolff, emphasizing the skilled workforce's crucial role, and outlining government plans to support shipbuilding, aligning with increased defense spending as a mechanism to secure long-term industry growth. Jones also noted the importance of a reformed apprenticeship system to address skill shortages, promising ongoing policy evaluations to promote domestic production strategies and support local businesses.

Overall, the debate highlighted bipartisan support for safeguarding and investing in shipbuilding as a valuable asset to the UK economy, backed by statistical evidence of the sector's substantial growth and contributions to national employment and GDP.

2.5%

Planned increase in defense budget prioritized in the economic framework to bolster strategic industries like shipbuilding.

£175 million

Value of the contract lost to a Polish company, depicting the immediate economic impact on the Scottish shipbuilding industry.

Outcome

The debate concluded with an agreement on the strategic importance of using shipbuilding to boost local economies and preserve industrial skills. The Government committed to continuing its efforts to support the sector by fostering better procurement strategies and investing in areas tied to defense and clean energy. This aligns with the UK's industrial strategy, seen as imperative for supply chain resilience and sustainable economic growth.

Key Contributions

Richard Baker
Labour

Opened debate stressing shipbuilding's historical and economic significance.

Torcuil Crichton
Labour

Criticized Scottish Government's decision not to award a shipbuilding contract to a local yard.

Laurence Turner
Labour

Discussed implications of procuring UK projects through international tenders, leading to industrial uncertainties.

Edward Morello
Liberal Democrats

Highlighted the significance of the marine industry to Dorset's economy.

John Grady
Labour

Expressed the historic and economic importance of shipbuilding to Glasgow.

Jim Shannon
DUP

Emphasized Harland and Wolff's historical importance to Northern Ireland.

Irene Campbell
Labour

Discussed ferry fleet inadequacies affecting local communities.

Patricia Ferguson
Labour

Recalled shipbuilding history in Glasgow and the Clyde’s contributions.

Mr Richard Quigley
Labour

Highlighted shipbuilding's role in Isle of Wight's identity and economy.

Alison Hume
Labour

Celebrated Whitby's historical shipbuilding pedigree and current contributions.

Jamie Stone
Liberal Democrats

Praised diversification into offshore structures and floating facilities.

Greg Smith
Conservative

Acknowledged historical shipbuilding contributions to national defense and economy.

Original Transcript
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.

Laurence Turner
Birmingham Northfield
Lab
14:38

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?

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.

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
14:58

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.

Jamie Stone
Caithness, Sutherland and Easter Ross
LD
15:04

Tell us more!

Richard Baker
15:26

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?

Patricia Ferguson
15:29

I thank the hon. Member for taking an intervention.

I am not sure whether he misheard or did not hear the earlier part of the discussions in Westminster Hall this afternoon when Members on this side of the House and Liberal Democrat Members talked about the fact that Harland and Wolff was saved in both Methil and Northern Ireland.

That is surely something to be celebrated across the Chamber.

Greg Smith
15:30

I am grateful to the hon. Lady for that intervention, and it is absolutely good news that Harland and Wolff has survived, but throughout the entire summer, not long after the new Government were elected to office, there were constant asks for financial support that were not forthcoming.

It took a very long time. This is fundamentally a debate, but I would gently suggest that the saving of Harland and Wolff—which I reiterate is good news—happened in many respects despite the early actions of the new Government and not because of them.

Patricia Ferguson
15:30

Would the hon. Member take another intervention on that point?

Greg Smith
15:30

It is a debate, so by all means.

Patricia Ferguson
15:30

I am grateful for that good-humoured response. Does he accept that the problems with Harland and Wolff did not just arise after a Labour Government were elected?

Given that the Labour Government were able to announce that Harland and Wolff would continue and survive in December—fewer than six months after they came into office—it seems to me that the Government really care about the industry and worked really hard to make that happen.

Greg Smith
15:32

I am grateful for the points that the hon. Lady makes.

The point from my earlier comment still stands—I was the shadow Minister over the summer; I survived my party’s reshuffle—that many asks were being made by Harland and Wolff much earlier, and that was something that was not initially forthcoming. I fully accept the timeline that the hon.

Lady sets out. This was not something that suddenly happened on 4 July, but when a new Government come in they should be judged on the speed of their response and exactly what is done to save that sector.

We must continue to back our shipyards, provide long-term certainty for workers and reinforce Britain’s position as a global leader in shipbuilding. By doing so, we will not only create a prosperous economy, but ensure that our nation remains safe and secure for generations to come.

Jamie Stone
15:38

I thank the Minister for giving way. On that point, I do not know how well I can put this. In building offshore structures, different bits can be built in different places, but they would come to Invergordon to be amalgamated, hence the £55 million Government investment.

Could the same principle apply of looking at the rules, to ensure that the different bits are built in Methil or Ardersier, rather than being built abroad? Because that is our fear, that they may be made far away in somewhere such as Poland or Korea.

Sarah Jones
15:39

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.

John Grady
15:40

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?

All content derived from official parliamentary records