Clydeside Shipyards
The final item of business is a members' business debate on motion S2M-2276, in the name of Trish Godman, on the future of Clydeside shipyards. The debate will be concluded without any question being put.
Motion debated,
That the Parliament offers its compliments to the managements, workforces and trade union representatives of the shipyards of lower and upper Clyde who, over and beyond the superb ships they build, work so hard and in a spirit of co-operation to ensure that their maritime industry continues as a viable and important element of the local economies; believes that it is essential that the fine skills, employed in the yards, should be maintained and enhanced by sound apprenticeship schemes, and considers that the Scottish Executive should do everything in its power, on its own account and in co-operation with the appropriate UK ministers, to assist our Clydeside yards to secure vessel orders.
I am grateful to the large number of MSPs, including Murray Tosh, who put their names to my motion and to colleagues who are present and hope to speak in the debate.
To those people who think that the Parliament should not debate the future of Clydeside shipyards and think that that should be left to Westminster—I hope that there are few such people—I simply point out that the Scottish Executive has a major, even decisive, role in procuring vessels for the public sector. On that ground alone, we have every right to debate the issues and to engage with ministers in Edinburgh who take immensely important decisions for the communities that we represent.
My motion stresses the need for the Scottish Executive to play its part in ensuring that our yards continue as
"a viable and important element of the local economies".
That statement holds for both the upper and the lower Clyde. I was reminded of the importance of that when I recently received a letter from the shop stewards committee at Ferguson Shipbuilders in Port Glasgow, which is in my constituency. The letter begins:
"We represent the frustrated workforce of Ferguson's shipbuilders Limited and are members of the GMB Union. We write again to ask for your support in providing a workload to ensure the continuance of shipbuilding on the Lower Clyde at Ferguson's."
Those people know that we support them.
I am the granddaughter of a blacksmith's labourer who worked in Stephens yard in Govan and I am married to a man who in a past life was a shipwright in a yard in Yorkshire, so I am well aware of the skills that are needed to build ships and of the dangers of developing vibration white finger and deafness, for example, which are occupational hazards. Everyone knows that the once huge industry has now been reduced to three yards—at Govan, Scotstoun and Port Glasgow. I do not believe that members of the Scottish Executive and their counterparts south of the border will stand idly by while a now small industry slips quietly away. No island nation should be without a shipbuilding industry.
I emphasise that the shipyard workers whom I represent at Ferguson Shipbuilders in Port Glasgow and those who commute up to Govan and Scotstoun are not looking for handouts and that they are not demanding a form of industrial featherbedding. Our constituents are—rightly and properly—demanding fair and square dealing from ministers and civil servants and our bounden duty as MSPs is to see that they are treated in that way. That must be the case where the procurement of public sector vessels such as Ministry of Defence ships, fisheries protection and research vessels and passenger ferries is concerned. I firmly believe that there is a sound and legitimate case for such vessels being built in United Kingdom yards and that our Clydeside yards should get a fair share of the work.
In a letter that I received a couple of weeks ago, Mr Bruce Drummond, who is president of the Greenock Chamber of Commerce, outlined his colleagues' concerns about the awarding of UK state contracts. Among other things, he said:
"Ferguson's, like all UK companies, are faced with an increased burden in complying with the high standards required by UK legislation."
France, Germany or Holland would simply never have their ships built in the UK or in Scotland if one of their yards had tendered for the work.
In an excellent article in the The Herald, Alf Young—whose father worked as a joiner in Scotts on the lower Clyde—stated:
"fresh political clarity on the strategic importance of shipbuilding to an island nation is needed; urgently."
Every employee in the upper and lower Clyde yards, from the youngest apprentice to the most senior manager, would agree with Alf Young.
All state-funded vessels should be built in our yards. European Union officials may frown on that, but our Clydeside yards need to be defended against what Alf Young has called
"predatory pricing and underhand subsidies operating in some of the new accession states."
I believe that such state protection also exists in some long-established member states. In the past, Govan has suffered the consequences of such outrageously unfair competition. Poverty wages are a hidden subsidy. France, Germany and Holland do not pay poverty wages, so how do they manage to keep most—if not all—of their orders in-house? That question must be addressed. There should be a full and thorough review of procurement regulations. It seems to me that people who play fair and square lose.
On a lighter and more welcome note, I have been told that an MOD vessel will be launched at the Govan yard next month. In fact, it will be launched on the same day on which a certain gentleman weds his bidie-in—to use Tommy Sheridan's unforgettable phrase. Be that as it may, I want there to be regular maritime launchings in our Clydeside yards.
Finally, although I welcome the opportunity of today's debate, apart from the review of EU regulations, the Parliament and Executive should be engaged in a constructive debate on the ways and means of the Scottish Executive's funding maritime contracts. We need to be better informed about such matters so that we can defend and promote the economic, social, community and cultural interests and concerns of all those who work in the shipbuilding industry on the upper and lower Clyde.
Trish Godman is right; this matter should be debated in the chamber and, if my voice holds up, I will try to contribute to that. Although the worthy motion covers all Clydeside, I will concentrate specifically on the situation on the lower Clyde. My grandfather worked in Ferguson's shipyard. Like many in Inverclyde, his family originated in Ireland and came to Scotland to look for work, settling in Port Glasgow. My father also served his time at Ferguson's, starting during the second world war at the age of 14. He then went on to work in various other yards for the next 30 years. Because different trades finished on different parts of a boat at different times, being laid off was quite a common experience. He can remember the days when a worker could leave one firm on a Friday and get a start down the road on the Monday morning.
That does not happen now. Today Ferguson's is the only shipbuilder left on the lower Clyde, but for how much longer? Ferguson's employs about 300 workers. The company is an example of good management and a dedicated workforce struggling to keep the shipbuilding industry alive in our country. Although the shipbuilding market is quiet at the moment, there is a £30 million order for two fishery protection vessels waiting to be determined. Ferguson's is building those vessels' sister ship, the FPV Sulisker, which will be completed by the end of 2005. Ferguson's is currently bidding for a Caledonian MacBrayne order, with a second vessel going to tender soon.
However, since last summer, Ferguson's has lost out on £80 million of orders. The Northern Lighthouse Board order went to Poland, where it appears that steel can be bought at below cost price and where labour costs $3 per hour. Western Ferries, which operates a Gourock to Dunoon service on the Clyde, buys its ferries from Ferguson's of Port Glasgow. The company is delighted with a service that builds its ships on time and within budget. However, Caledonian MacBrayne, which also operates a Gourock to Dunoon service on the Clyde, is quite another story.
It is extremely difficult for people in Scotland—and doubly difficult for people in Inverclyde—to understand why Caledonian MacBrayne, which is based in Gourock, bypasses Ferguson's shipyard, which is based in Port Glasgow, to go all the way to Poland to buy a ship, while receiving a subsidy of £28 million from the Scottish taxpayer.
It is time that the Scottish and UK Governments started to prioritise our shipbuilding industry and the jobs of Scottish workers in the same way as other EU countries manage to prioritise theirs.
I, too, welcome the opportunity to contribute to the debate. In line with the other maritime pedigrees that have been offered, and not to be outdone, I inform members that I have a family connection with shipbuilding on the Clyde as well. One of my forebears built the tea clippers at Greenock.
All of us in the chamber, with our different party backgrounds, share a desire to do everything that we can to support the compelling case of Ferguson's in Port Glasgow. I, too, will concentrate my attention on that yard.
As a lawyer, I was often asked to plead cases that, on frank inspection, were perhaps less than robust, but it would have been a joy to be asked to plead the case for a company such as Ferguson Shipbuilders. As has been said, the company has a proven reputation of skill and experience in building quality craft. As Bruce McFee said, the company has not lacked customers elsewhere. We know that Western Ferries, which is not a public sector company, procures ferries from Ferguson's, so pricing seems to be acceptable.
Ferguson's has a highly trained and experienced workforce that has a good contract performance record. We also know of Ferguson's significance to the local economy. Its wages bill is estimated at some £7 million per annum, but that excludes local suppliers, who probably account for the employment of another 100 people in the local economy. The two local colleges—James Watt College of Further and Higher Education in Greenock and Reid Kerr College in Paisley—are used to provide training and skills for the apprentice workers who start off in Ferguson's.
The case for Ferguson's is not difficult to prove; the difficulty lies with the people to whom we need to prove it. I will try to observe the tradition that members' business debates should not be hostile or contentious, but in the speeches that have been made I detect the most concerted and obvious desire to ask the Executive to show political leadership. There are unexplained questions about why countries in other parts of Europe manage to place their contracts with their own yards. Concerns have been expressed by Ferguson's about how other yards have managed to secure contracts when, on a price-comparison basis, there is apparently no contest.
If people such as Robert Breckenridge, Crawford McKechnie, Alex Logan, Sean Finke and William Small—who are all workers at Ferguson's and members of the GMB union—can fight for their yard alongside the company's chief executive, Alan Dunnet, and managing director, Richard Deane, questions must be posed about the role of the Scottish Executive. I ask the minister to give us evidence that the Executive is prepared to fight for the precious, precious shipbuilding industry on the lower Clyde.
Let me quote something that I read in today's Evening Times:
"We need, in Edinburgh and Westminster, the clear demonstration that there is the political will to ensure the yards on the Upper and Lower Clyde, are given a fair deal - the kind of treatment our neighbours in the EU give to their shipyards."
That quote comes not from one of the Executive's political opponents but from Trish Godman, who is a member of one of the Executive parties.
I also refer members to Jack McConnell's response to my question at First Minister's question time on 3 February, when I raised the issue of Ferguson's. He said:
"Of course Ferguson's, like other Scottish shipbuilders and yards, is treated fairly by Scottish ministers. The objective has to be not just to treat them fairly, but to ensure that they are well placed to win orders and contracts."—[Official Report, 3 February 2005; c 14255.]
Ferguson's could not be better placed to win orders and contracts; what we ask for now is evidence of the Executive's political will to deliver for Ferguson's.
I congratulate Trish Godman on securing tonight's worthwhile debate on the Clyde shipyards. If I may say so, this is one of those debates that comes camouflaged a little but packs a punch as the speeches develop.
I also have some shipbuilding forebears. In my case, my grandfather was involved in working for Parsons on the Tyne. That might not be quite the message that I should give out today, but it reinforces Trish Godman's point about the United Kingdom being an island nation that depends very much on the sea.
The idea of shipbuilding is embedded deep in the psyche of the Scottish people and, in particular, of the people of Glasgow and the upper and lower Clyde. On the day the most recent naval frigate was launched, I happened to be out on the north bank of the Clyde down at Scotstoun, where I was amazed to see a large number of people gathering there and on the other side of the river to watch the launch—I thought that the days of hordes of people turning out for such things were past. The decline of the yards is seen almost as a failure of the nation's virility.
For Britain as a whole, shipping and shipbuilding hold a special place. British bottoms once transported some 50 per cent of the world's trade, which was an astonishing achievement. I have long thought that there is something wrong with an international shipping system under which links to a ship's home country have ceased and the ships fly under flags of convenience and are built elsewhere.
These days shipbuilding operates in a different environment. The capital outlay for the yards and equipment remains vast but, as members have said, the real struggle is to secure the steady flow of orders that gives stability to the yards and regular employment to the workforce. It is worth my making the point that stability also creates the confidence to support the recruitment of apprentices, who can be an unnecessary addition to fixed overheads, if times are hard. That issue has not yet been touched on, but it is mentioned in the motion. I strongly support the call that Trish Godman has made today for a review of the regulations that apply to procurement.
Scotland has managed to maintain a tradition that places a high value on engineers. Not long ago, I spoke to representatives of a railway signalling firm, who told me that it takes on 10 apprentices a year in Glasgow and that there is a big demand for places from good applicants. That contrasts with the firm's place down south, which struggles to get enough interest. What applies to the railways also applies to shipbuilding.
We have a major success story to tell on modern apprenticeships, but we must maintain the stability of supply if we are to keep up in that regard. I agree entirely with Trish Godman that shipbuilding is a key area that should be sustained and encouraged. It needs a steady flow of orders and has been bedevilled by the lack of them. In a sense, that is primarily a matter for the shipyards, but, as has been demonstrated in the debate so far, although industry gets the orders, it must operate on a more level playing field than seems to exist at the moment. I hope that we can use the Executive's muscle and influence to prevent unfair competition. If, as Bruce McFee suggested, Polish companies are getting what are, in effect, illegal state subsidies to enable them to undercut indigenous yards, that must be fought hard and stopped. If Government can support the yards in other ways—by using the network of embassies, by its influence and by placing naval orders in an orderly stream or, preferably, a river—that must be done.
Today's debate is important. I do not claim to have detailed knowledge of the lower Clyde, but the issues that we are discussing apply right up the Clyde and to a number of other important rivers in Britain. I am pleased to add my voice in support of the motion.
I thank Trish Godman for bringing a timely debate to Parliament. I declare my membership of the GMB.
I recall the first launch of a ship that I attended, which was at Scotstoun shipyard in my constituency. The ship was HMS St Albans, which was a type 23 frigate—the forerunner of the type 45. The launch was a huge event for Glaswegians, who came in their thousands to witness the ship floating on water for the first time, before it was fitted out in the dry dock. The traditional breaking of the bottle against the hull was merely one small part of a bigger tradition that included children singing, karaoke competitions and displays throughout the day of the launch. In 2006, Scotstoun shipyard will launch the first type 45 frigate, which has been the collective work of the Glasgow shipyards. Unions are currently discussing the prospect of sharing the launch between the Scotstoun and Govan yards.
Only a short time ago, we were all congratulating ministers on the success of the shipbuilding strategy and task force and—notably—on the return of apprenticeships, through the modern apprenticeships scheme, to the Clyde. An article from the Evening Times that I dug out of my file hails the securing of shipbuilding's future on the Clyde for 10 years or more, about which we were all very pleased. However, because of recent events, that future needs assessment and reaffirmation.
Considerable investment over the past 30 years has placed Scotland and, in particular, Glasgow in a unique position. Billy Connolly would not recognise a modern-day shipyard; I am sure that there is less room for comedy than there was previously. A huge proportion of the UK's total naval ship design and engineering resource is based on the Clyde, where unrivalled experience has been gained during every major naval procurement programme of the past 30 years.
Although there is a moderately healthy manufacturing workload for the coming few years, there is also an acute shortfall in high-value engineering and design work. According to BAE Systems, if the aircraft carrier programme—the CVF, or carrier vessel future—is to be put back a few years, as has been reported in the press, and if the military afloat reach and sustainability project remains delayed and the Defence Procurement Agency succeeds in buying tankers overseas, the consequences for the majority of the industry will be disastrous. Those are the industry's words.
The severe short-term drop in work that I have described will be serious for the future of the Clyde; if we do not bridge the gap in the order book, we will lose a valuable workforce in the short term, the consequence of which will be that we will not have the capability to take on work in the longer term, when orders come on stream.
BAE employs 2,600 workers, 2,300 of whom are based in Scotstoun and Govan. Approximately half the members of the Glasgow workforce work in production. They work on landing ship dock vessels and type 45 destroyers for the Ministry of Defence.
We have 550 engineers in Glasgow and the city's design capability has made it the centre of excellence that it is. Even a temporary loss of jobs will impact on our capability because we are unlikely to be able to get our engineering resource back to shipbuilding if it leaves. If the baseline number of engineers falls below 370, the business will not be able to function and our position in the industry will be lost.
As other speakers have said, the Clyde is world renowned for quality shipbuilding. We have an established ability to build high-quality ships. Workers in Glasgow pass on their support to workers at the Ferguson yard. The Clyde's success story can continue to be realised, but it is in danger.
I welcome the UK Government's general approach to naval shipbuilding. Warship procurement is, of course, a reserved issue. I thank Lord Bach, who keeps me informed on defence issues. However, as Trish Godman has said, the loss of skills and industrial excellence is of primary importance to Scottish ministers and to MSPs who represent the interests of shipping.
I agree with Trish Godman that when it comes to state subsidy and procurement, the UK seems to stick to the rules of engagement and so often loses out. I have just learned that, in 2006, most of Scotland will be ineligible for regional selective assistance because the accession states will be favoured. I am aware that BAE has made an application that is designed to ensure that we continue to have a competitive edge, which I know is being treated sympathetically by Executive ministers.
I am grateful to the ministers—Allan Wilson and Jim Wallace—for their assurances that they will take forward the concerns of Glasgow MSPs about shipbuilding on the Clyde. I know that they will work hard on scrutinising the suggestion that the design work for the CVF be brought forward and on considering the support that might need to be given to retain skills and jobs in shipbuilding. The debate has been timely and I again thank Trish Godman for securing it.
I thank Trish Godman for securing the debate.
In 1947, I started my apprenticeship as a marine engineer with Barclay Curle and Company in Scotstoun. At that time, Barclay Curle employed more workers than are now employed in the whole UK shipbuilding industry. In 58 years—not a long time—the industry has been politically destroyed. News such as that of the recent decision to have aircraft carriers built in France rather than on the Clyde makes me use the phrase "politically destroyed". Clyde-built ships had a reputation for quality workmanship that was unrivalled throughout the whole world. When a Government of whatever persuasion gives aircraft carrier orders to the French and allows our industry to die, it is committing antisocial behaviour of a kind that I cannot understand. It is not acceptable that the Government preaches against antisocial behaviour in one field, but does not practice what it preaches in another.
Most of the points that I intended to make have already been made eloquently by other members. All I can say is that in my opinion, no matter how hard people try, they will be let down by politicians. It will be up to the workers to try to generate a little bit of the spirit that they had when they kept the Govan yard open—I urge them not to give in to the politicians. Although the fight is industrial rather than political, surely the political parties in this country should have the interests of the workers at heart, especially given that we are talking about an industry that was the pride of this nation. They must fight to keep some form of shipbuilding in this country. When I think about the Queens and all the other ships that were launched on the Clyde, I shake my head and think, "No. We should be doing better." Unfortunately, we are not doing better.
I thank Trish Godman for bringing this evening's debate to Parliament. I could talk all night about the shipyards because working there was a real education, as other members have mentioned. In 1947, we had the coldest winter on record, yet people still went out there and carried on working. If someone got hold of a bit of metal, it stuck to their hand. That is how cold it was; it was incredible. However, the red Clydesiders, as they were known, did not complain about the conditions. They got their heads down, carried on working and still produced the best ships that we ever saw in our maritime history. I am just sorry that things have come to such a pass, so I wish Trish Godman well in her efforts to keep Ferguson's going.
I commend Trish Godman for securing the debate, and I very much agree with her argument. From what we have heard tonight, it looks as though we are in a situation in which we risk further erosion of our shipbuilding industry, order by order, due to apparently excessively zealous attitudes to European Union competition laws, among other things. There is also a strong suspicion that unfair state aid is being used by some of our competitor nations.
Ferguson's in Port Glasgow has built a great reputation and many fine ships, but now its management is telling Scotland that Government-funded contracts in France, Germany and Holland are going to indigenous yards there rather than to low-cost EU shipbuilders such as Poland. However, contracts here are going increasingly to Poland, with a recent net loss to the Scottish economy of some £80 million in respect of three Government-funded ships. Could it be that those other mature EU nations have concluded that the Poles are bidding especially low prices to win dominance of the EU shipbuilding sector, perhaps even with the unfair advantage of a sprinkling of state aid, in order to earn premium prices in years to come? Could it be that France, Germany and Holland suspect that the level of state aid in Poland is excessive and illegal and have simply decided to be pragmatic and stop the rot?
For my part, I am a devotee of Professor Michael Porter. I believe in competition, but only in competition that is open and fair. I therefore believe that it is incumbent on us to prove whether competition is fair and to encourage public bodies to follow the examples of other nations. I make a plea to the Executive to call on the EU to investigate what level of state aid is going to Polish yards, and thereby to identify the true extent and validity of Polish state support. If the Executive does nothing, we risk losing the last remnants of our shipbuilding industry without a fight, and we can look forward in the long term to escalating prices for future vessels from what may be today's low-cost supplier, which might not necessarily be a low-cost supplier tomorrow.
I have expressed my fear that the dice have been loaded against our yards and that the net effect could be that we will lose yet more shipbuilding capability from the Clyde. If that happens, we will also see the Government lose out in the short term in terms of tax revenues and potential export income. It will also simultaneously face increased social security costs. In the longer term, we as a nation face the prospects of paying premium prices for shipbuilding and ship repairs, and of the export of valuable capital from Scotland. Such prospects do not make sense elsewhere, so surely they should not make sense here.
Having spent my formative years in Port Glasgow, and having worked as a young accountant on audits of firms such as Kincaid's and Hastie's, I have absolutely no desire to see more losses. Equally, from the taxpayer's perspective, I want value and retention of capital here in this country. An industry that can build and maintain ships is absolutely crucial for a maritime nation, so I am thankful that we still have Ferguson's, Govan, Scotstoun and other Clydeside yards. My plea to the minister is this: let us go the extra mile for our national self-interest. That is the best way for us to go.
I join colleagues in offering my congratulations to the member for West Renfrewshire, Patricia Godman, on securing this important debate. Shipbuilding is clearly of significant constituency interest to her, and I know that maintaining a successful shipbuilding presence on the Clyde is a topic that is close to her and her constituents' hearts. She has shown today and previously—and will no doubt do so again in the future—that it is something for which she is prepared to fight vigorously. She is to be commended for that.
The debate seems to be an opportunity to declare personal commitments. For what it is worth, my grandfather worked in the Glasgow yards for Harland and Wolff. I recall being on the Upper Clyde Shipbuilders marches to which John Swinburne referred:I do not know whether he was there, but I know I was.
For shipbuilding on Clydeside, and throughout Scotland, this is a time of significant opportunity but, as we have heard, it is also a time of significant challenge. We in the Executive are aware of the challenges to which members have referred. We are committed to helping our shipbuilding industry and its highly skilled and professional workforce to meet the challenges. We have an excellent working relationship with all three major shipyards in Scotland which, with the trade unions that represent the workforce, work with the Executive and Scottish Enterprise on the Scottish marine industry steering group. The forum provides the opportunity to exchange ideas and to develop the industry.
We share a common view with the steering group about what future success for shipbuilding must be founded on. First, it must be founded on exploiting the high skills levels and dedication of the workforce. Secondly, it must be founded on promoting innovation and encouraging the adoption of best practice to enhance productivity and competitiveness, which is the focal point of tonight's debate. There can be no complacency on that point: everything we do is geared towards that.
The issues that have been raised fall into two areas: those that relate to Ferguson's on the lower Clyde and those that relate to BAE Systems at Scotstoun and Govan, to which Pauline McNeill referred.
Ferguson's success to date has been founded on identifying specialist markets in ferries, offshore vessels, tugs, fisheries protection vessels and fisheries research vessels. There can be no doubt but that that market is characterised by fierce international competition and intense and sometimes aggressive pricing. The market is largely dominated by public procurement and therefore is subject to the public procurement rules of the EU. In recent years, Ferguson's has successfully competed in that market: successes have included repeat orders from Stirling Shipping—
Is it not a fact that a Government order for a defence vessel can be built within the Government's own country and it is not necessary to invite tenders from abroad?
Yes. I will come on to that. I thought that John Swinburne would be aware of that. I am talking about the commercial market in which Ferguson's operates. As I was saying, it has been successful with orders from Stirling Shipping, with a three-vessel order for ferries from Plymouth City Council, with fisheries research vessels and with new fisheries protection vessels.
None of those orders is easily won. Competition in an open and value-for-money driven public procurement regime is intense.
I will clarify what I meant by a review of the procurement regulations. It seems to me that it is about the interpretation—if I can say this in the chamber: I could not say it outside—that civil servants make of the regulations. Civil servants in France, Germany and Holland seem to be able to interpret the regulations in a way that enables those countries to build their own ships, but we seem not to be able to do that. We are continually caught up in questions of whether we will get the orders and what the procurement rules are. A review of how we interpret the regulations is needed.
Any regulation is subject to interpretation. Such interpretation is not restricted to civil servants who work for the Scottish Executive or, for that matter, for the UK Government. The regulations are also subject to interpretation by, dare I say it, lawyers and the courts and, of course, by the competing companies.
If you allow me, Presiding Officer, I will now deal with some issues that have been raised.
There is some time in hand.
The issues are complex and important. I would like to get on the record certain points in relation to some of the statements that have been made.
Ferguson's recent losses have been mentioned. I appreciate and share the disappointment that everyone feels at the loss to a Polish yard of the orders for the general lighthouse authority and the Natural Environment Research Council. When companies have concerns about the procurement process, they can and should seek legal advice—I make that important point in direct response to Trish Godman.
There are routes for recourse through the relevant courts if necessary. I stress that the Executive has no locus to intervene in procurement that is funded by UK public bodies. However, the Scottish ministers seek assurances from UK ministers that procurement programmes comply with European rules. Ultimately, if Ferguson considers that procurement has not followed the proper procedure, it is for the company to take the necessary action.
Currently, two procurement processes are at an advanced stage: for a Caledonian MacBrayne vessel; and for two Scottish Fisheries Protection Agency vessels. Of course I am aware of concern about perceived low-bid prices, which have been repeated tonight, and of the feeling—I will put it no more strongly—that illegal or legal state aid subsidy has been paid to the competition. Very strict rules on state aid and aid to commercial shipbuilding are set out in the European Commission's framework on state aid to shipbuilding. All member states are subject to the same state aid regime and their obligations are set out in the framework. If a company—or a member of the Scottish Parliament, a journalist or whoever—is in possession of sufficient evidence of illegal aid or unlawful Government subsidy, there are appropriate routes for thorough investigation through the EC with, if appropriate, the support of the UK Government.
Does the minister seriously suggest that a company such as Ferguson should take the appropriate legal action to try to ascertain whether a steel company in Poland that supplies a Polish yard has received a hidden subsidy from the Polish Government? Is that a serious way of progressing the matter? Does the minister think that there is a greater role for the Scottish Executive in pursuing such issues?
I hope that the member was not deliberately misinterpreting my comments, which reflected an important fact. If a company is in possession of sufficient evidence of illegal aid or unlawful Government subsidy, there are appropriate routes through the EC, which can be facilitated by the Scottish Executive and/or the UK Government. It is important to stress that there must be evidence, which could be elicited on inquiry or discovered through subsequent inquiry.
I will briefly talk about the significant challenge that the lack of new build and design work on the Clyde presents for the naval sector. I met Pauline McNeill, Bill Butler, Gordon Jackson and others today and I am particularly conscious of the need to sustain employment levels and the necessary skills mix, to which Pauline McNeill referred, through the promise of orders to come, which does not sit well in a cut-throat business environment.
I am happy to repeat what I said to Pauline McNeill: the Executive will continue to highlight to the UK Government the need to ensure that short-term pressures are not allowed to undermine the longer-term strategy. That is an important point. Such a strategy should allow for the timing of programmes to be smooth, to sustain the minimum core capability required to deliver on future programmes and to provide naval exporters with a viable platform from which to secure orders from overseas navies and Governments. I am delighted to say that BAE excels in that.
The Executive and its agencies will continue to support shipbuilding on Clydeside through co-ordinated action on the marine industry. That action will focus on maintaining the strength of the excellent skilled workforce in the yards, and it will continue to support the industry in the recruitment of apprentices through the modern apprenticeships programme. That programme has been a real success story in shipbuilding with 250 modern apprentices now at BAE.
As I have discussed with Pauline McNeill, Bill Butler and Gordon Jackson, our action will also highlight the need for the UK Government to understand the short-term pressures that yards face and the need for action to overcome those pressures—such as the recent awarding of the Ark Royal refit to Babcock.
We will consider carefully and sympathetically any application by the yards for regional selective assistance and we will support other ways of boosting productivity and promoting innovation. That will assist and support Scottish shipbuilding to succeed in domestic and overseas markets.
Meeting closed at 17:46.