Shipbuilding and Ferguson Marine Engineering Ltd Insolvency

Motion made, and Question proposed, That this House do now adjourn.—(Mrs Wheeler.)

This debate goes to the heart of two Scottish institutions. The first is Caledonian MacBrayne—CalMac—which provides lifeline services to the Scottish highlands and islands and whose ships are acquired for it by Caledonian Maritime Assets Ltd, or CMAL; both are Scottish Government agencies. The second is Ferguson Marine Engineering Ltd, which operated the last shipyard on the lower Clyde—a river where ships admired around world were made—but which has been excluded from the most recent CMAL tender to build CalMac ships, and orders are going abroad.

CalMac and Ferguson are part of Scotland’s story, but they are also vital to Scotland’s future. Communities devastated by incessant breakdowns and cancellations need a fast and reliable service to maintain them and allow them to grow. For that, new ships are required. Not only should Ferguson be building them, but yards elsewhere along the length of the Clyde, not just in Port Glasgow but on other sites that can be revitalised. Instead, CalMac is floundering and Ferguson’s future is threatened.

In 2014, Ferguson was saved by the intervention of Jim McColl, and all looked rosy. What has gone wrong? Why have vessels 801 and 802 been so delayed, why have costs overrun so massively, and why has Ferguson Marine Engineering Ltd gone into liquidation? At the core of those questions are procurement and administration, both of which are issues reserved to Westminster. I hope that Ministers will be able to provide answers, if not an inquiry, into a scandal that needs to be resolved.

First, let me rebut suggestions that the yard or the workforce were to blame. History shows what the Clyde can do, and the same skills still remain at Ferguson. Moreover, research by the National Union of Rail, Maritime and Transport Workers has shown that of the eight ships that have broken down recently, only two were built on the Clyde, and they were among the oldest ships, where difficulties could be expected. CMAL recognised the skills there when placing the order for ships 801 and 802. In evidence to the Scottish Parliament’s Rural Economy and Connectivity Committee inquiry, Jim Anderson, the director of vessels, stated:

“The shipyard was already building ships for us. It had a good history of building these type of ships.”

Even more convincing was Commodore Luke van Beek, a Dutch maritime expert appointed by the Scottish Government, who said:

“I was in no doubt it had the management expertise. Having rebuilt the yard, Ferguson Marine had a good shipbuilding system in place.”

For sure, mistakes will have been made and perhaps more could have been done, but it was and remains a skilled workforce and Jim McColl and his company have a global reputation for engineering prowess. His initial intervention was lauded by the Scottish Government. The suggestion that he can succeed around the world but not in Scotland is absurd. Procurement and liquidation lie at the heart of this mess, and responsibility rests with CMAL and the Scottish Government.

Does my hon. Friend, as the biographer of the late Jimmy Reid, share my concern that this whole sorry affair, and the Scottish Government’s involvement in it, renders their protestations about Type 26 frigates risible and is deeply damaging to the proud history of shipbuilding on the Clyde?

I agree with my hon. Friend. The history of Scottish shipbuilding is a fantastic record, but it also has a future. To have a future, it has to be not simply on the upper Clyde but on the lower Clyde, and that takes me to what needs to be done.

There needs to be clarity on CMAL’s actions and the role of Government Ministers responsible. A public inquiry should be held. The Holyrood inquiry suggested an independent external review. That, I believe, is inadequate. This straddles reserved and devolved competencies. Will the Minister consider seeking to establish a joint inquiry with the Scottish Government, as happened, for example, with the Stockline explosion? Moreover, for the communities involved and for Scotland’s industrial future, action is needed. To use football parlance, sack the board and remove the manager. CMAL should be abolished.

CalMac, in consultation with the communities, which must have rights, should be responsible for the selection of ships. The management team that has been put into Ferguson needs to be removed. The replacement of the CalMac fleet, which will involve several vessels a year and over decades to come, should be placed out to tender, but with the stipulation that Ferguson and other sites in Scotland must be used for their construction by whoever wins it.

We need clarity on what went wrong, but fundamentally we need to secure a ferry service for our remote communities and provide a future for our shipyards on the lower Clyde.

May I begin by congratulating the hon. Member for East Lothian (Kenny MacAskill) on securing this debate? I will turn to the important points and questions that he has raised shortly, although I do have to say at the outset that they are for the Scottish Government, and not for me, to answer.

I first want to put this debate in the context of shipbuilding in Scotland more generally. As a global trading island nation with a proud maritime history, shipbuilding is an important part of our industrial identity. Scotland, like every part of the United Kingdom, offers much to our security, sovereignty and prosperity and plays a critical role in the collective defence of our region and global interests.

My Department has been working closely with the Ministry of Defence to deliver on our ambition to support military shipbuilding in Scotland, and the industry there currently benefits most from MOD expenditure. The Secretary of State for Defence, in his role as ship- building tsar, is acutely aware of the value of shipbuilding in Scotland. He is leading work across Government to deliver on his vision to support industry across the Union, enabling it to become more productive, innovative, and competitive.

UK naval shipbuilding is currently centred around BAE Systems’ Scotstoun and Govan shipyards and Babcock’s Rosyth shipyard, which also have strong naval export markets. These yards are producing the Type 26 and Type 31 frigates—two crucial naval procurements. Three of the Type 26 ships—HMS Glasgow, HMS Cardiff and HMS Belfast—are under construction on the Clyde. Manufacture of these new, highly capable ships is securing about 1,700 skilled shipbuilding jobs in Scotland and some 4,000 jobs throughout the supply chain across Britain until 2035.

On 23 September 2021, the shipbuilding tsar officially cut steel for HMS Venturer, the first of the Royal Navy’s Type 31 frigates, during a ceremony held at Rosyth dockyard. The event marks a significant milestone in the programme for the Royal Navy, defence and shipbuilding in Scotland, with all five vessels to be built by Babcock on the firth of Forth at an average production cost of £250 million per vessel. The Type 31 contract, awarded in November 2019 and to run until 2028, has led to a £71 million infrastructure investment for the dockyard and sustains 130 apprenticeships and 20 graduate positions.

It is good to see a debate taking place in this House on a company based in my constituency of Inverclyde. In fact, the three companies —CMAL, Caledonian MacBrayne and Ferguson—are all based in Inverclyde. It would have been nice to have been notified that this debate was going to happen. I would have expected that courtesy to be extended to me by the hon. Member for East Lothian (Kenny MacAskill).

I share the Minister’s optimism for British shipbuilding. Look at what we are building with Ferguson Marine, after all the troubles it has had—yes, it has been a stormy journey, but it will be retooled, and have new shedding and a re-energised workforce, with 40 apprentices working out of there. I could not have said that five, six or seven years ago. My hope for Inverclyde and for Ferguson Marine is a successful and buoyant future.

I thank the hon. Gentleman for his intervention, although I am afraid it is not for me to intervene on a family feud, if I can put it that way, with the hon. Member for East Lothian. I am well aware that there are traditional courtesies, which should be maintained.

I am glad to hear that there is optimism in the constituency of the hon. Member for Inverclyde (Ronnie Cowan). I had the pleasure of visiting Greenock—I do believe that I gave him due notice of that—particularly to look at the new ocean liner terminal, which I hope will bring increased tourist footfall to his part of the world.

It is clear that the UK Government recognise and will show our support for the future of shipbuilding in Scotland through all the means that we have available—namely, in the form of military spending and support.

Let me turn to the points raised by the hon. Member for East Lothian. I am well aware of the challenges of providing reliable ferry services, particularly to the rural and island communities in Scotland, but when the UK Government have received various representations on the lack of suitable ferries in Scotland, we have been firmly told by the Scottish Government that this is a process for them and not for us.

Does the Minister accept that procurement, liquidation and administration are aspects of company law that are reserved to Westminster? On that basis, is he prepared to meet me to discuss the concerns that I and many others—not simply in Inverclyde, but in Scotland—have about the process that has taken place? The responsibility for ordering the services and the payment for the ships might be Scotland’s, but, as I mentioned with regard to the Institute of Chartered Accountants in England and Wales, the law under which procurement and administration is carried out is reserved to Westminster.

Indeed, the framing of company law is a reserved matter. I would need to take advice from officials, if the hon. Gentleman will allow me, as to whether a breach of that law was a reserved matter or, as I suspect, more a devolved one.

We have been discussing reserved issues and devolved issues tonight. That is something that pupils at Logie Primary School will be looking at this week through UK Parliament Week. Will the Minister congratulate the young people at Logie Primary School, and the staff, on their interest in UK Parliament Week? I will be seeing them on Friday and I am sure one of the questions I might get asked is, “How do you get a mention of Logie Primary School in UK Parliament Week into an Adjournment debate about shipbuilding?”

I am happy to say that my hon. Friend has given them a masterclass in how to do that. Referring back to the subject of this debate, I very much hope that among the pupils at Logie Primary School we will see future mariners, shipbuilders, engineers and technicians. I wish them all very well in their future endeavours.

I was surprised to see that the procurement of these new ferries to Islay did not include Ferguson Marine in the tendering process. The delays of the two ships currently under construction may well have played a part in that, but again, it is not for me to comment at this stage. It is very disappointing, given the maritime history on the Clyde in Scotland, and its shipbuilding history more generally, that these ships could not be included and are being lost to overseas orders. But, as I say, these are matters primarily for the Scottish Government to answer, and the hon. Member for East Lothian should pose them to his former colleagues in Holyrood and the Scottish Government. From the UK Government’s perspective, we are investing in the future of Scottish shipbuilding. That demonstrates the strength of our Union, and I hope to see many more ships built on the Clyde.