Defence Industry: Scotland

Part of the debate – in Westminster Hall at 4:30 pm on 30th April 2019.

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Photo of Ged Killen Ged Killen Labour/Co-operative, Rutherglen and Hamilton West 4:30 pm, 30th April 2019

My right hon. Friend is absolutely right. To be frank, I find it amazing that the red, white and blue Conservative party of Great Britain does not see the merit of building such ships in Britain, creating so much benefit for years to come.

In the context of this debate, we must also look at the Scottish Government’s role. Recently, the First Minister set out her plans for a new independence referendum. We must therefore consider the impact of that policy on long-term investment. Scotland’s shipyards rely on the pipeline of complex warships to be constructed for the Ministry of Defence—at least one remaining aircraft carrier, five offshore patrol vehicles and eight frigates—but if Scotland were to become independent before the next Holyrood election, as the SNP plans, the MOD has indicated that Scotland could be excluded from producing UK warships under article 346, or a similar rule if the UK has left the EU. Without those contracts, the shipyards would need to find alternative sources of demand in order to remain open, and I hope that the SNP will elaborate on that in any contribution today.

The MOD spends about £1.6 billion a year directly on Scottish industry, with £900 million spent directly on shipbuilding. The Growth Commission report stated that the entire defence budget for an independent Scotland would be £3 billion, plus £450 million to be used over five years to set up the apparatus of an entire independent state, of which a defence force is just one part. From that combined pool, therefore, the SNP proposes to find at least £900 million a year just to keep the shipyards open, while also setting up a new defence force, equipping it, and ensuring that its IT and support systems work properly. That is before we get on to the implications of importing the necessary components required for advanced manufacturing under a new currency.

That is £450 million to set up a new state in five years, including a defence force, but in less than five years it has cost the Scottish Government £200 million to set up a Scottish social security system and £178 million to set up an IT system to allocate payments to farmers. When we consider the complexity required to set up a new modern military force with all the support and complex IT architecture necessary, we realise that the figures do not add up. Scotland is being let down by both its Governments.