The next item of business is a members’ business debate on motion S6M-18709, in the name of Paul Sweeney, on “Norway selects a Glasgow-built type 26 as its next generation frigate”. The debate will be concluded without any question being put. I invite those members who wish to speak in the debate to press their request-to-speak button.
Motion debated,
That the Parliament welcomes the reported £10 billion deal for the UK to supply at least five Type 26 class frigates to Norway, which will be built by the Govan and Scotstoun shipyards on the River Clyde in Glasgow; notes with optimism the potential for the largest shipbuilding export deal in Scottish history to secure and create a significant number of highly skilled jobs in the shipbuilding industry and associated advanced manufacturing supply chain; understands that Scotland’s shipyards now hold an orderbook for an expected 18 frigates and 13 Type 26 vessels for the Royal Navy and Royal Norwegian Navy, and five Type 31 vessels for the Royal Navy; further understands that that is the largest surface naval shipbuilding programme in Europe, and that it is rivalled only by those in the United States and China; recognises what it sees as the vital role of this industry to Scotland’s economy; notes calls for the Scottish and UK governments to work collaboratively to aim to ensure that Scotland’s firms and workers are at the forefront of this project, and to maximise the economic benefit and long-term security for communities across Scotland, and further notes the calls on them to consider ways of building on this with a comprehensive national shipbuilding strategy for Scotland that will secure further naval and commercial shipbuilding contracts for the country’s shipyards.
On Tuesday, I was pleased to return to my old workplace, BAE Systems naval ships in Scotstoun, with the newly appointed Minister of State for Defence Readiness and Industry, Luke Pollard MP, to celebrate the £10 billion deal to supply at least five type 26 frigates to our Norwegian friends. The deal has brought with it a wave of optimism to the shipyards on the River Clyde, in stark contrast to when I worked there a decade ago. I think that I express the will of the whole Parliament in extending our gratitude and thanks to our Norwegian neighbours for their vote of confidence in our shipbuilders and the world’s best frigate design.
Both the Scottish naval shipyards—in Govan and Scotstoun, and Rosyth—now have a formidable order book with an expected 18 frigates in the pipeline: 13 type 26 vessels for the Royal Navy and Royal Norwegian Navy, and five type 31 frigates for the Royal Navy, with export prospects for the latter including to Denmark and Sweden.
Glasgow is now at the very heart of the largest surface naval shipbuilding programme in Europe, a programme rivalled only by those in the United States and China. This is not only about building ships; it is about building a future. It is about supporting Glasgow’s largest manufacturing industry, which has always been a vital engine in the west of Scotland’s economy. Not only will the deal with Norway directly sustain more than 2,000 jobs at the Govan and Scotstoun shipyards, providing a stable workload for the next 15 years; it will cascade work to 103 businesses across the shipbuilding supply chain in Scotland. Together, those businesses support more than 12,000 jobs in this country.
Like many Glaswegians, I come from a family with a proud history of working in the Clyde shipyards. My dad, my uncle and my granddad all worked in the shipyards, going right back to the building of the Queen Elizabeth 2 in the 1960s. I recall the pride of launch days, sitting on my dad’s shoulders, looking at those vast ships being launched into the river and hearing the clatter of the drag chains, but I remember that pride in the industry and the achievement of our families being overshadowed by the fear that the ship that my dad was building would be the last one—the precarious nature of shipbuilding in the 1990s meant that there was a sense that every ship might be the last one. When my dad eventually lost his job, I saw his purpose ripped away from him and the devastating effect that that had on my family. That is the source of my motivation to play my own part in reviving Glasgow’s shipbuilding industry.
The United Kingdom Labour Government shares my ambition for reviving the industry right across Scotland. The £10 billion deal with Norway represents the largest shipbuilding export deal in our country’s history. It will give people across Scotland confidence that shipbuilding has a secure future, giving young people confidence that a career on the Clyde will be a prosperous and fulfilling one, working on some of the world’s most complex engineering projects. I am hopeful that the Norway deal will also signal to other countries that Scotland is leading the way with its specialist naval shipbuilding capabilities. Indeed, a United States Navy delegation, led by the US Secretary of the Navy, was on a tour of the Clyde shipyards this week. The delegation was hugely impressed with how far ahead we are in skills development and facilities investment, with that confidence in long-term orders.
We should seize this generational opportunity to reposition Scotland as a leading force in world shipbuilding again, leveraging the critical mass of the naval shipbuilding programme to drive commercial shipbuilding growth too. It should be a springboard for growth, not just a hammock where we can get complacent. This Government’s decision earlier this month to scrap its ridiculous ban on support for naval shipbuilding is a welcome first step to grasping the opportunity that the deal with Norway represents for the nation. However, there are still deep concerns in the industry that the new policy amounts to a shadow ban of defence firms. Industry tells me that greater clarity is needed from the Government on its new policy.
Although the UK Government is backing Scottish shipbuilding, the Scottish Government’s outdated, laissez-faire public procurement policy is handing an unfair advantage to state-supported overseas competitors. It is frankly absurd to export Scottish skilled work and jobs to shipyards in Poland and Turkey by awarding contracts for CalMac ferries to them rather than to Scottish shipyards that can do the job. It leaves one with the impression that the Norwegian Government seems to have more confidence in Scotland’s shipbuilding capabilities then this Scottish National Party Government has—that is the reality.
We need a specific shipbuilding strategy for Scotland, and at the heart of that strategy must be a change to Scottish public procurement law to include a mandatory social value weighting in tenders for shipbuilding programmes. That would ensure that Scottish ships are more likely to be built in Scotland. Take, for example, the current procurement process for the two new freight flex vessels that will serve the Aberdeen to Kirkwall/Lerwick route. Four shipyards have been invited this week to tender for the contract: two in Turkey and two in China. Why are the Scottish Government-owned Ferguson Marine, Babcock in Rosyth, or Harland & Wolff not in contention for that £200 million contract? The irony is that the only work that is keeping the lights on at Ferguson Marine today is the subcontract steel work fabrication from BAE Systems for the type 26 frigates. Even the promised capital investment to improve Ferguson’s antiquated shipyard has not yet been made, despite it taking years to install critical equipment such as a panel line.
Although the UK Government’s national shipbuilding strategy sets out that a minimum 10 per cent social value weighting should be applied to evaluations of all new shipbuilding competitions, the Scottish Government has no equivalent. It considers only quality and price, which means that, as we have just heard during First Minister’s questions, Scottish firms often do not even bother to tender for the work, fully aware that they cannot compete with the competitive shipbuilding finance provided by state investment banks in Spain, Turkey, Poland and China.
I also note that the minister mentioned size. If Ferguson Marine leased the Inchgreen dry dock, it could easily assemble the ship for the northern isles project.
The tender for the Northern Lighthouse Board vessel replacement project was won by Gondán, a Spanish shipbuilder. Although BAE and Ferguson Marine were invited to tender for that contract, they withdrew shortly after being informed that they were among the six suppliers to be selected, and for the following reasons. BAE said that a UK-based social value consideration was not regarded as essential in responding to the tender and Ferguson’s said that the Northern Lighthouse Board’s stated position on economic and social impact scoring would make no distinction between impacts in the UK and other countries, weighting apprentices in foreign countries the same as those at home. That is crazy.
I asked the Scottish Government to accept the UK Government’s generous offer of a legislative consent memorandum to update Scottish public procurement law and to introduce mandatory local industrial social value weighting in all public procurement competitions. There is a real opportunity for Scotland to build on that £10 billion contract with Norway. If we are to rejuvenate Scotland as a leading shipbuilding nation, we must use the Scottish National Investment Bank to remove the financial barriers that impede Scottish shipyards from competing with those in Turkey, Poland and China and must add minimum social value weighting to all tenders.
This is personal, not political, for me. One of the main reasons why I am here in this Parliament is to help Scottish shipbuilding succeed and I hope that the whole Parliament can agree with that endeavour.
We move to the open debate.
12:56
I thank Paul Sweeney for bringing the debate to Parliament. As someone who is known to take an interest in both maritime and Norwegian matters, I regard it as welcome news, but no surprise, that the Norwegian Government has recognised the talents of BAE Systems in Glasgow by asking it to deliver at least five type 26 frigates for the Norwegian Royal Navy.
The design of the type 26 is seen as a successor to previous anti-submarine warships in the NATO fleet. The platform design has been shared by the UK, Australia and Canada and I understand that this is the first time that that has been done in such a way since the design of the tribal class destroyer during world war two.
I have visited the company and seen for myself the truly impressive scale of the operation and have also had the pleasure of meeting some of the many apprentices.
As I am sure members are about to say, BAE Systems builds on a venerable tradition of shipbuilding at its locations in Scotstoun, formerly Yarrows; and in Govan, formerly Kvaerner, Govan Shipbuilders, Upper Clyde Shipbuilders and, before that, Fairfields. The latest order is the largest single defence capability investment in Norwegian history and certainly represents a vote of confidence in the company and in the wider Scottish economy.
The member mentioned Kvaerner. It is important to recognise that the Norwegians played a critical role in rejuvenating and saving the Govan shipyard in the late 1980s and that there is a fabulous legacy in seeing that investment come full circle.
I happily acknowledge that point and recognise the part that Norway has played in the history of the yard.
Norway and Scotland share many maritime and historic links—not least since Norway’s conspicuously successful independence from Sweden in 1905—and the existence of the Sjømannskirken, which is the Norwegian seafarers’ church in Aberdeen, is just one of many signs of that continuing connection with Scotland.
News of the contract was warmly welcomed by the Scottish Government and by the First Minister. I was pleased to see the UK Prime Minister correcting the record on that—albeit without apology—after twice claiming otherwise in the House of Commons.
I am encouraged by how, thanks to support for BAE Systems from both the Scottish and UK Governments and the hard work of its skilled workforce, the shipyard and the type 26 design are attracting interest from overseas. This debate is also an opportunity to remind ourselves that the decision to award the contract was ultimately made by the Norwegian Government on the basis of the yard’s excellence, rather than because of political factors. It also shows that all such large military contracts operate in an international context.
The Royal Navy’s tide class tankers were built in South Korea, and some parts for the Royal Navy engines are fabricated there, too. Today also serves as a reminder that Norway—a country of 5 million people in northern Europe that is a non-nuclear member of NATO—is perfectly capable of having a first-rate royal navy of its own. I will resist the strong temptation to say more than that.
The fact is that it was BAE’s excellence that ultimately drew the investment and not, as I said, the political environment. As a Parliament, we should all agree on that. I wish the company and its workforce, as well as the armed forces of Norway, every success for the future.
13:00
I congratulate Paul Sweeney on his motion and join him in celebrating this landmark moment for Scottish shipbuilding. I also personally endorse his words about the need for there to be a more level playing field for procurement rules. I advocate very strongly that we should maximise those Brexit freedoms, and that means redrawing the lines around how we procure in the public space. There has been a reluctance from government at all levels to properly embrace the opportunity to do exactly what Paul Sweeney advocated in his remarks.
The £10 billion contract for at least five type 26 frigates to be built for the Royal Norwegian Navy at Govan and Scotstoun is the largest shipbuilding export deal in Scotland’s history, representing a vote of confidence not only in BAE Systems, but in the skills, resilience and ingenuity of the Scottish workforce. The order was not won by accident. Norway had other options. Designs from France, Germany and the United States were all under consideration, but it chose the British type 26 because it is world class. It is unrivalled in sonar, strike capability and NATO interoperability. The choice is a direct endorsement of Scotland’s proud tradition of shipbuilding excellence.
We should acknowledge the policy framework that made the order possible. The UK’s national shipbuilding strategy, which was launched by the Conservative Government in 2017, provided a focus on exports, with the 30-year pipeline giving our yards the ability to expand and compete globally. Norwegian and British vessels will now be built side by side at the Janet Harvey hall. Such work is possible thanks in large measure to the Conservative UK Governments that worked hard to ensure that BAE Systems in Govan was properly equipped to handle such orders, and the fact that Scotland now holds an order book for 18 frigates and 13 type 26 vessels is a measure of that foresight.
Since 2014, the order books in Scottish shipyards have boasted orders for 25 vessels—five offshore patrol vessels, 18 frigates and two carriers. That is more than double what was promised during the independence referendum. More than 2,000 highly skilled jobs at Govan will be directly sustained into the 2030s, and when we consider the wider supply chain of more than 100 Scottish businesses, including 54 small and medium-sized enterprises, the total rises to around 12,000 jobs. The Clyde is now a serious contender for even more work, with the building of the Royal Navy’s next generation of air defence destroyers.
However, it is not just about the Clyde. Rosyth, too, stands on the cusp of further international contracts. Type 31s have already been exported to Poland and Indonesia, with the yard poised to build frigates for Denmark and Sweden. The type 26 is now a truly global combat ship. Canada and Australia are building a further 23 vessels to the same design, and Scottish SMEs are therefore embedded in the global supply chains to support those construction projects for decades to come.
This is a story of Scottish success on the world stage—success that is built on excellence, innovation and the deep wells of skill that we have in our workforces in our country. We must give credit to those who had the foresight to invest, and we must ensure that Scotland’s two Governments—the UK and Scottish Governments—work together to maximise those benefits for the future.
13:04
I thank my good friend and colleague Paul Sweeney for bringing this debate to Parliament. I welcome the news of the £10 billion deal to supply ships to our friend and ally Norway and to our Royal Navy, which will secure more than 2,000 well-paid jobs.
The deal secures employment for the next decade and a half, restoring Glasgow’s shipyards to their place as the pride of the United Kingdom and Scotland. This is not only about economic windfall; it is about a show of confidence in the capabilities of our workforce. The Scottish Government must now do the same and show that it has confidence in Scotland’s shipbuilding industry by backing that up with a comprehensive shipbuilding strategy and placing direct orders of any future ships and ferries, and, ideally, that should be backed by a dynamic, aggressive industrial policy.
We are all aware that our NATO allies will be increasing their defence spending substantially during the next decade or so, which presents a major opportunity to our defence industry. With the right industrial strategy and defence contracts, the Scottish Government can embrace that growth area by enabling a suitably funded skills and training programme to rectify any gaps that exist.
Sectors and industries throughout Scotland are all in the same position. Members are quite familiar with the lack of specialist tradesmen, technicians and engineers. A sturdy and steadfast industrial policy that could link up defence, green energy and house building—to name but a few—and their common need for highly skilled personnel would achieve more than the lacklustre approach that is being taken by the Scottish Government at present.
Funded training and industrial placements, and secure, highly paid careers for those involved are the way forward. In addition, there could be increased protection from the globalist economy by ensuring that Scotland has the skills and political will to build its own ships and infrastructure.
The Scottish Government might be happy with Chinese steel and buses, Turkish boats and Spanish firms running our power and trunk road networks, but when it comes to our workforce, that is not going to cut it anymore.
The Scottish Government should take the UK Labour Government’s lead and embrace a Canadian-style procurement strategy that not only balances cost and value for money but ensures that partners invest in the local economy, upskill their workers, outsource to Scottish third-party organisations and generally ensure that the benefit of large-scale procurement is felt at home as much as possible and for as long as possible.
I hope that every colleague here agrees with most of what I am saying. We have the utmost faith in the hard-working, inventive and industrious people of Scotland. After all, we are team Scotland. We have the resources and the players. We just need the manager—the Scottish Government—to get its act together.
13:07
I am pleased to be able to contribute to this afternoon’s debate, and I thank Paul Sweeney for bringing it to the chamber.
It goes without saying that the £10 billion deal to supply five type 26 frigates from Norway should be welcomed whole-heartedly. The debate is an excellent opportunity to do so, and everyone who has spoken has welcomed it. However, it is also an opportunity to look at the success of the UK’s defence industry in Scotland.
The industry has gone from strength to strength, and that needs to be celebrated. The new deal will support around 2,000 jobs at BAE Systems shipyards in Glasgow, as well as around 2,000 jobs across the maritime supply chain. More than 100 businesses will benefit directly from the agreement, nearly half of which are small or medium-sized businesses. That is a real boost to the economy and a shot in the arm.
The new deal for the Clyde is a landmark moment for the Scottish shipbuilding industry. It is also a call to action for the Scottish and UK Governments. We now need to see them working hand in glove with industry in Scotland to ensure that that fantastic sector can capitalise on the opportunities that lie ahead. That includes supporting opportunities not only on the Clyde.
Babcock in Rosyth, which is in my region of Mid Scotland and Fife, is in the running to win a £1 billion deal to build ships for Denmark. It should be supported, too. The chief executive, David Lockwood, said that he is “confident but not complacent” about the bid. It would follow on from the previous deal to build five new type 31 warships for the Royal Navy, which was worth £1.25 billion.
Part of the investment in the Rosyth yard includes building a new assembly hall, which will allow two frigates to be parallel assembled. That is another huge investment. Such investments in state-of-the-art infrastructure will support organisations and structures in Rosyth and on the Clyde.
The member is making a very important point about the capital investment that is required to get the shipyard infrastructure up to scratch. The investments at both Govan and Rosyth demonstrate visionary capacity growth through bringing more shipbuilding indoors—Scotland having a very rainy environment. Does the member agree that that is needed at Ferguson Marine, too, and that the commercial yards also need investment to get their facilities up to scratch?
The member makes a valid point. If we are to create that kind of environment, we must ensure that other yards can fulfil orders and provide capacity within the system.
As I said, that investment will support thousands of jobs and will lead to more opportunities. It will cost about £250 million to build a frigate—which is about the same as what it costs the SNP to build a car ferry.
Such investment does not just happen by itself or by chance. There is a real opportunity here to work with the UK Government. In the past, the Conservative UK Government was very much involved, through its national shipbuilding strategy. I pay tribute to what it did. That strategy, with its focus on creating new technology and new jobs, needs to continue. I hope that the current Labour UK Government will continue to support Babcock and other firms to ensure that that remains the case.
The SNP Government needs to take a more positive approach when it comes to the realities of the defence sector. As we know, it takes an ideological stance, and that can make waves within the sector. We do not want to see that, and we need to ensure that the Scottish Government is adopting a more positive approach.
The investments that have been made are putting Scotland firmly at the centre of the global defence industry, securing thousands of jobs for the future. We have arrived at this point through proactive, bold and ambitious investment by Governments that recognise the importance of the industry. The onus is now on both the Scottish and UK Governments to show the same recognition into the future. If that happens, this success will continue.
13:12
I congratulate Paul Sweeney on securing this important debate. The shipbuilding industry is of historic importance to many communities across Scotland, and it continues to play a significant part in our economy today.
The deal that has been secured by the UK Government with Norway to provide at least five frigates will bring jobs and continued work for Scotland’s shipbuilding industry. The deal follows on from other contracts secured from the Royal Navy by Scotland’s shipyards, including Ferguson Marine, which will be involved in fabricating components for HMS Birmingham.
There is still a clear need, however, for a comprehensive national shipbuilding strategy for Scotland, particularly when we consider the current position that Ferguson’s finds itself in as the Clyde’s last non-naval shipyard. Ferguson’s employs around 300 highly skilled workers and apprentices, and it has been a vital part of Scotland’s shipbuilding industry for more than a century now, delivering a third of the current CalMac Ferries fleet.
The yard is also vital for the local economy in Inverclyde; continued failure by the Scottish Government to deliver on the promised investment or to help the yard secure work is creating uncertainty about the yard’s future. Last year, the Scottish Government pledged to invest £14.2 million in modern equipment at Ferguson’s, yet only £600,000 has been invested so far, and procurement notices for new machinery have lapsed.
I would therefore be grateful if the minister could provide an update today on when the remaining promised investment will be delivered at Ferguson’s. The yard lost out on the CalMac order for seven small electric ferries earlier this year, not because of doubts about the quality of the yard’s bid, but because its bid was undercut on price. Concerns have been raised that social value was not considered—or was not considered sufficiently—in that decision, or indeed in other decisions that have been made. In other parts of the UK, the UK Government has now placed a minimum 10 per cent social value weighting element into the assessments of bids for shipbuilding contracts, and I support the points that Paul Sweeney made in his speech in that regard.
When I raised that very point with the Cabinet Secretary for Finance and Local Government last week, she said that social value weighting was already included in current procurement legislation. I would be grateful for clarity from the minister on social value being included in procurement and at least matching the 10 per cent minimum that is required in other parts of the UK, because we know that that has not been the case in previous processes.
I also made the case for direct awards last week, which is lawful for essential infrastructure such as ferries. I understand that the UK Government has written to Scottish ministers about extending UK procurement legislation to Scotland. It would be helpful if the minister could outline what engagement, if any, is taking place with UK ministers on procurement legislation, the ability to make direct awards and the ability to maximise social value in any procurement policies.
Last week, I urged the cabinet secretary to make a direct award to Ferguson Marine for the replacement of MV Lord of the Isles. That call is supported by the workers, unions, Ferguson Marine itself, businesses and the local community across the west of Scotland.
Will the member take an intervention?
The member is concluding.
I apologise—I cannot take one.
I ask the Scottish Government to consider making a direct award under section 45 of the Subsidy Control Act 2022 in relation to that specific procurement exercise, and I reiterate the calls in Paul Sweeney’s motion for a national shipbuilding strategy in Scotland that recognises the strategic importance of shipbuilding to this country.
13:16
I welcome the debate and congratulate Paul Sweeney on securing it. We are discussing a very important part of the Scottish economy and an exciting new chapter for this sector; indeed, Paul Sweeney eloquently outlined the sector’s deep heritage. Often, when I talk about Scotland’s industrial heritage, I recall that, at the beginning of the 20th century, the Glasgow and Clyde shipyards were producing around a third of the world’s ocean-going vessels. It is exciting to be here in 2025 talking about this new chapter in the story of shipbuilding in Scotland.
We have a proud history in shipbuilding, and, of course, manufacturing capability lies at the heart of it. As a Government, we are committed to ensuring that shipbuilding, marine engineering and ship servicing on the Clyde continue to flourish, and that we continue to support our innovative marine technology companies to grow. Much of the focus in the debate has been on naval shipbuilding, which, as we have just discussed, remains a particular strength in Scotland.
The recent announcement from the Norwegian Government of a £10 billion investment in naval ships to be built on the Clyde has, of course, been welcomed by the First Minister and members across the chamber today. I add my support to Paul Sweeney’s thanks to the Norwegian Government for placing that order with the Clyde. I certainly support that sentiment, because the contracts will mean significant investments in the yard, opportunities for people in the area, and a significant boost to employment in the defence sector in Scotland. It is also, as Alasdair Allan and others have said, a vote of confidence in the workforce.
It is quite right to give thanks to the Norwegian Government for this extraordinary vote of confidence in Scotland’s shipbuilding, but will the minister join me in recognising, as I said in my speech, the significant part that the national shipbuilding strategy of 2017—a strategy that came from the UK Conservative Government—played in leading to this moment? At the time, it was pretty much derided by his members of Parliament at Westminster.
It is clear that I am surrounded by political parties that want to take credit for what is happening, so I will focus on paying tribute to the workforce at the yard. As I—and others—have said, it shows that our shipyards are competitive in what is a global industry. It is important to make that point.
We continue to work with the UK Government to ensure that Scotland benefits from the increased defence spending that is included in the planned defence growth deals. Two or three months ago here in Edinburgh, in my role as business minister, I joined the former Secretary of State for Scotland, Ian Murray, to meet business organisations. Clearly, that was prior to the announcement that we are discussing today, but one theme of our discussion was the massive potential for Scotland’s supply chains from the forthcoming increase in defence expenditure and the need to ensure that our very well equipped supply chains benefit greatly from such contracts.
The minister has made an important point about the supply chain. Around 80 per cent of the value of those ships is bought into the shipyard through the supply chain, so maximising that content is key. Will the minister outline what Scottish Enterprise, other enterprise agencies and the Scottish National Investment Bank could do to get patient finance in place to support investment and get more Scottish content into those ships?
As I have said, a lot of discussion is going on at the moment to make sure that we can capture as much of those contracts for the Scottish supply chain as possible. That is also part of the UK discussions, because one theme that has been raised by members of the business community in Scotland is the need for clear visibility of and timelines for what is coming down the pipeline, so that they can take advantage of that in Scottish supply chains. That issue has been highlighted, and we are keen to bring it into our discussions with UK colleagues.
We have a growing supply chain that can take advantage of support for advanced manufacturing and high-tech jobs. All of that will be part of those discussions, and we will continue to do whatever we can to support commercial shipbuilding as well as attract the naval contracts that we hope will come to Scotland.
As evidence of our commitment, our action in taking Ferguson Marine into public ownership saved the last commercial shipyard on the Clyde and rescued more than 300 jobs—something that we have heard many times in the chamber. As Katy Clark also mentioned, we committed to investing up to £14.2 million over two years in Ferguson Marine, subject to due diligence and the meeting of commercial standards, and we look forward to hearing further from the shipyard about proposals for investing that money. We remain firmly committed to supporting Ferguson Marine to competitively bid for future contracts in order to secure its long-term future.
Does the minister recognise, however, what the shipyards have been telling us, which is that, to win commercial work, they need social value weighting and patient finance? The Scottish National Investment Bank does not really offer any shipbuilding finance products that are competitive with other countries. Can we address that fundamental issue?
Those are all parts of on-going discussions, but the £14.2 million pledge for investment is a clear commitment. In addition, we are engaging with the UK Government on the next steps of its industrial strategy and its planned review of the national shipbuilding strategy, to emphasise Scotland’s strengths in shipbuilding and marine technology. We are also engaging with the UK Government’s National Shipbuilding Office to maximise support for the Scottish commercial shipbuilding sector.
As we know, access to skilled labour is a challenge for shipbuilding companies, particularly when it comes to fabrication and welding, so we have invested up to £2 million in developing engineering skills in Glasgow under an initiative that was designed by the Clyde maritime cluster in partnership with Skills Development Scotland. Scottish Enterprise has also recently provided more than £9 million to BAE Systems to support a training and skills academy. In addition, we have been working with the Clyde maritime group on future workforce planning. A huge amount of activity is under way to address the skills pipeline so that we can take advantage of all the potential that is under discussion in the debate.
As members will be aware, we are undertaking a major reform of the skills system so that it meets Scotland’s needs. Ministers continue to engage with all the relevant industries, including shipbuilding and the defence sector, that are looking forward to that reform. A recent report that the group that I mentioned commissioned from defence and marine expert Hans Pung and the RAND group, through a project managed by Skills Development Scotland, mentions a number of workforce planning measures for the regional cluster on the Clyde that align with the recommendations of the UK Government’s shipbuilding skills task force.
The National Manufacturing Institute Scotland, industry partners and Innovate UK’s workforce foresighting hub have developed a report that highlights the need for updated training to equip the workforce with the skills that will be required as the industry evolves and adopts new technologies. That report recommends actions for the shipbuilding industry to prepare its workforce effectively for the needs of the future. That will be a key focus for the sector and for partners.
With all the support that we can and do provide to our shipbuilding sector in Scotland, we must also be cognisant of the facts that shipbuilding is a competitive global market and that any direct award of a public contract must comply with procurement rules and be capable of withstanding legal challenge. I say gently to members that the focus of today’s debate is on Norwegian investment in Scottish shipyards, which is evidence that this is a global, international and competitive industry.
Will the minister take an intervention?
Yes.
Make it brief, as the minister will be concluding.
Will the minister consider investigating making further use of section 45 of the Subsidy Control Act 2022? There have now been two incidents of the Russians sabotaging undersea cables around the Northern Isles. In the case of the Northern Isles ferry, there is a strong rationale for considering the national security implications and making that a direct award—or, at least, a UK-only competition. Will he look into that case?
Please start to conclude, minister.
As the First Minister indicated during First Minister’s questions in relation to some of those themes, we are sympathetic to doing what we can, and we are looking at procurement issues closely. However, we have to do that within the legal constraints of public subsidy control legislation. We continue to discuss this with the UK Government and we also engage with the National Shipbuilding Office on proposed procurement exercises.
I realise that I am running out of time, but I just want to say that we are all in the same place, which is that we all want to support Scottish shipbuilding going forward. We are on the cusp of an exciting new chapter for shipbuilding in Scotland. We want to maximise the advantages of that and ensure that we secure as much economic benefit from it as we can, so that we are talking about not just the contracts that we are discussing today but the many more contracts coming to Scottish shipyards in the years ahead. I am sure that, if we can collaborate and work closely together, we can achieve that for Scotland.
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