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Scottish shipyards need ‘greater clarity’ over future military orders, say MPs

The Scottish Affairs Committee also challenged the UK Government to set out the reasons for awarding a recent contract to an international consortium.

27 January 2023

Scottish shipyards need “greater clarity” from the UK Government over where contracts for new naval vessels will be placed in the coming decades, MPs have said.

Members of the Scottish Affairs Committee made the plea as they challenged ministers to set out why a recent £1.6 billion contract for the construction of three naval support ships had gone to an international consortium – which will see some of the building work take place in Spain.

MPs are demanding to know whether the successful bid from the Team Resolute consortium was the cheapest.

That deal will see some of the construction work being carried out at the Navantia shipyard in Cadiz – with MPs describing the contract award as “an example of a shift in the UK Government’s approach to warship procurement”.

In a new report on military shipbuilding, the MPs insisted “more jobs in the UK and Scotland in particular” would have been supported if ministers had opted for an alternative bid from UK firms.

“The UK Government’s decision appears to prioritise short-term savings over longer term economic gains for Scotland and the rest of the UK,” the committee said.

Defence Secretary Ben Wallace has previously said that awarding the contract to Team Resolute would be a “significant boost to the UK’s historic shipbuilding industry”, with work to be done  at the Harland & Wolff yards in Belfast and at Appledore in Devon.

MPs on the Scottish Affairs Committee however stressed the need for Westminster to “give Scottish shipbuilders the confidence to continue to invest in the future”.

Their report, published after an inquiry into military shipbuilding north of the border,  highlighted “the importance to Scottish shipyards of maintaining a dependable ‘drumbeat’ of orders to allow them to invest and grow”.

The Ministry of Defence spent £1.11 billion on shipbuilding in Scotland in 2020-21 – supporting some 7,700 jobs in the industry.

While the MPs said “the days of ‘feast and famine’ must not return” for Scottish yards, they added there “remains some uncertainty about the pipeline in the 2030s and 2040s”.

Defence Secretary Ben Wallace said awarding the contract for support ships to Team Resolute would boost shipbuilding in the UK (Jane Barlow/PA)

Their report insisted: “The Scottish shipbuilding industry should not be given cause to doubt that it will have a consistent order book in the future, so long as it continues to deliver on its commitments to its Government customers.”

A shift in approach from the UK Government means it is “no longer the default position that warships will be designed and built fully in the UK”, the committee said – adding that this is “of concern to some in the Scottish military shipbuilding sector”

It follows speculation that the multibillion-pound contract for five new Type 32 frigates for the Navy at the Rosyth dockyard in Fife could be axed.

In the wake of that, the committee challenged the UK Government to confirm whether the Ministry of Defence “still intends to order the Type 32 frigates as set out in the National Shipbuilding Strategy Refresh”.

Speaking as the report was published, committee chairman Pete Wishart said: “Military shipbuilding is a major Scottish success story. From Rosyth to Glasgow, we have military shipbuilding hubs that boost local economies and invest in skills and training.”

Scottish Affairs Committee chairman Pete Wishart stressed the importance of a ‘drumbeat of orders’ for a ‘thriving’ shipbuilding industry (House of Commons/PA)

He hailed a recent announcement that Type 26 frigates are to be built by BAE Systems in Glasgow as being a “major vote of confidence in the Scottish shipbuilding sector”.

But the SNP MP added: “UK Government policy on military shipbuilding ebbs and flows.

“On the one hand, ministers are championing the skill and expertise the military shipbuilding sector thrives on in Scotland, but, on the other, its policies have opened up the ‘offshoring’ of warship production to other countries.

“The Government cannot have this both ways: a thriving shipbuilding sector is dependent on the drumbeat of orders.

“We have the skills and expertise here, in Scotland, to support our future military shipbuilding needs so it is unclear what benefit is to be had by opening up procurement to international competition.

“We hope the UK Government carefully considers our findings and recommendations, and in turn offer some certainty to the military shipbuilding sector in Scotland that its prominence in designing and building warships is here to stay.”

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