Defence Industry (Scotland)

HC Deb 07 May 2003 vol 404 cc247-69WH

2 pm

Jim Sheridan (West Renfrewshire)

I begin by expressing my thanks and appreciation for being selected to introduce such an important debate. This subject is pertinent to the people of Scotland, but it is of equal importance to citizens and military personnel throughout the United Kingdom and in the international arena where we are carrying out our duties with the utmost professionalism. That is best shown by the current situation in Iraq, especially in the city of Basra, where our troops are highly respected for the way in which they are carrying out their duties. The majority of people in Basra recognise that, and we can see on our television screens how much they appreciate the troops and how helpful they have been to them. Those professional troops can carry out their duties in such a way only if they are given professional support and equipment that is manufactured throughout the United Kingdom. The defence industry also provides good-quality and well-paid jobs.

Prior to entering this place, I spent a significant amount of my working life in the defence industry, in shipbuilding and systems manufacturing. Scotland makes a large and important contribution to the United Kingdom defence industry by hosting several important establishments that provide and produce the cutting-edge, high-tech equipment on which our forces depend.

Not including subcontractors, approximately £1.5 million of defence expenditure comes directly to Scotland, and an estimated one in 50 Scots are dependent on the Ministry of Defence for their livelihoods. I firmly believe that that would be put at risk if the unthinkable happened and, as recent election results have confirmed, the unlikely break-up of the United Kingdom by those with a narrow and parochial view of life were to become a reality.

Angus Robertson (Moray)

I thank the hon. Gentleman for allowing an intervention so early in his speech. Does he believe that employment in Scotland, which is directly dependent on defence equipment expenditure, has increased or decreased since the Labour party has been in power?

Jim Sheridan

Before responding to the hon. Gentleman, I wish to pass on my condolences to the hon. Member for Banff and Buchan (Mr. Salmond), the leader of the Scottish National party parliamentary group, whose mother has unfortunately passed away. My best wishes are with him and his family at this time.

As for whether more jobs have been created since the Labour party came into power, I do not have the statistics to prove it, but it is undoubtedly true that, had Labour not come into power in 1997, we would not have a shipbuilding industry. It would have been demoralised. However, if need be, I shall obtain such statistics for the hon. Gentleman.

Rachel Squire (Dunfermline, West)

I thank my hon. Friend for securing this important debate. I apologise to him that, due to Defence Select Committee business, I shall have to leave early. Does he agree that there would have been no future for Rosyth dockyard in my constituency or for the Clyde shipyards without the United Kingdom Government and their commitment to the biggest warship-building programme in 30 years, in which Scotland has a major share?

Jim Sheridan:

My hon. Friend makes a valid point. Rosyth is a perfect example of Labour in Government. I compliment the management and the trade unions at Rosyth for not depending on MOD work, and instead having a long-term vision and diversifying into the commercial market.

There is no doubt that Scottish workers are involved in producing quality equipment for every sector of our armed forces, directly or indirectly, be it for gunnery sites for land and air forces or for the construction of the warships that patrol and defend our island. I remind those members of the Opposition parties who argued against the decision to build the two aircraft carriers of the disastrous consequences it would have had for the shipbuilding industry if they had been successful. [Interruption.] I have been asked to name them. Lloyd Quinan of the Scottish National party argued that we should not be building both those ships, and said that we should be building only one.

Mr. Ian Davidson (Glasgow, Pollok)

I am particularly grateful that my hon. Friend has given way on the subject of aircraft carriers. Do we have any information on how many aircraft carriers an independent Scotland would require? How many frigates would an independent Scotland require? Would they be built on Clydeside? Can he give me an estimate of the number of jobs he believes would be lost without the Royal Navy orders?

Jim Sheridan

I thank my hon. Friend for that intervention. Unfortunately, I do not have access to the SNP's statistics on how many battleships or aircraft carriers we would need in an independent Scotland, but I hazard a guess that one would be too many for that very reason.

The investment in the aircraft carriers was welcomed by the shipbuilding industry in Scotland, which was on its knees. I recall that the SNP spokesperson from Glasgow, Govan was calling for the Government to intervene to save the yard in Govan while, further down the Clyde, her colleague was arguing that we should have only one aircraft carrier, the consequences of which would have been horrendous for the shipyards.

It is important that the major players in the shipbuilding defence industry are sustained, but we must also remember that some of the smaller, commercial shipyards are equally dependent on those orders—none more so than the Ferguson shipyard of Port Glasgow in my constituency that currently faces extreme difficulties because of a lack of orders. It would welcome further investment or work that would flow from the building of the aircraft carriers. In Port Glasgow, many of the indigenous skills and industries were lost because of the devastating impact of 18 years of Conservative rule.

We must remind ourselves of the many communities throughout Scotland that have some of the oldest regiments in the British Army and are also host to a number of RAF flying stations. Many of those bases are used to provide quality training of our armed forces while they are defending our shores—skills that are recognised throughout the world.

Anne Picking (East Lothian)

Although my hon. Friend is right to speak about the training of the armed forces, will he place on record the importance of the medical corps and the nursing corps, and the support that we receive from the health service via the military? That must be placed on record.

Jim Sheridan

My hon. Friend makes a valid point. She has a proud record of working in the medical field, and she has corrected us when we have concentrated on the soldiers and the manufacturing of equipment. We tend to forget the valuable asset that we have in the medical corps of the military.

Mr. David Marshall (Glasgow, Shettleston)

While my hon. Friend is going through the list of categories of people whose jobs depend on defence, will he add the highly-paid, professional and clerical staff, many of whom are employed at Kentigern house in the centre of Glasgow, on which the city depends greatly for its employment?

Jim Sheridan:

I thank my hon. Friend for that intervention. He is right, because the staff play a crucial role in servicing front-line forces. Without them, those forces would be unable to function as professionally as they do now. Reflecting again on an independent Scotland, I wonder what would happen to those jobs if that disaster occurred. They are equally important to the search-and-rescue teams based at the site, which provide round-the-clock emergency assistance to people not only in the United Kingdom but throughout neighbouring countries. They do that in all weathers and often at risk of their own lives. My argument is that those bases would be jeopardised by the break-up of the United Kingdom.

Scotland is one of the most important recruitment areas for the armed forces, and provides 10 per cent. of their recruits. Currently, 13 per cent. of the British Army is Scottish. Around £600 million was spent with Scottish prime contractors.

Mr. Davidson

Does my hon. Friend agree that it is regrettable that the armed forces are not prepared to produce evidence to show that they are equal opportunity employers? They need to show that people from a constituency such as mine have an equal opportunity to join the officer class, and that there is no monitoring of the areas from which officers and men are drawn. They should provide confidence that the armed forces are not socially selective in their recruitment.

Jim Sheridan

I thank my hon. Friend for his valid intervention. Some people perceive, rightly or wrongly, that the class system still exists in the armed forces. Our armed forces should be transparent and seen to be equal opportunities employers. As parliamentarians, we should ensure that they are.

Mr. Peter Duncan (Galloway and Upper Nithsdale)

I hope that the hon. Gentleman will endorse the continuing belief that the British Army and the Scottish forces should be selected on grounds of ability. They are the best and should remain so. I accept the point made by the hon. Gentleman about transparency, but nothing should come above obtaining the best people for the best forces that the United Kingdom can command.

Mr. Deputy Speaker

Order. I am listening carefully to the debate. The armed forces are the armed forces, and the defence industry serves the armed forces. The armed forces are not part of the defence industry, so I suggest that we concentrate on the subject of the debate.

Jim Sheridan

Thank you, Mr. Deputy Speaker. I shall continue.

Each year, Scotland accounts for approximately 8 per cent. of the United Kingdom's jobs in defence manufacturing. It is a matter of fact that defence companies have a proud record of investment in quality training for our youngsters who, if they decide to leave, take that training with them into the commercial world. I am a living example of that, although some people may not agree that it is a proud record.

On diversity of skills, there is a crucial role for the Defence Diversification Agency in utilising the skills and technology gained in the defence industry and transferred to commerce and markets. That could and should be exploited if we are to retain this country's leading role in new technology. Tangible evidence of that can be found in the development of the mobile phone, which was designed initially by the military—we know how many jobs that has created throughout Scotland. There are many other examples, including the commercial use of the infrared equipment currently being developed for use in private cars and burglar alarms.

As a former defence worker, I am fully aware of the quality training that our youngsters in Scotland receive. There are many examples of mature individuals developing the skills gained working in the defence industry and carrying them into commercial markets. Many others have used their expertise to develop and grow some of our smaller businesses and create jobs in Scotland outside the defence industry. Not all of them, I must add, are in manufacturing. Some are in the civil and administration sectors, as has been referred to. More than 24,000 members of the MOD and armed forces work at defence sites in Scotland, including more than 15,000 armed forces personnel and 9,000 MOD civil servants. Those are all quality, well-paid jobs that could be put at risk by the destabilisation of the UK.

Angus Robertson

Can the hon. Gentleman say whether there are more or fewer of those jobs since Labour came to power?

Jim Sheridan

Again, I do not have the statistics to answer the hon. Gentleman accurately. I can only reiterate that, if we are dealing in hypotheses, one hypothesis is that the destabilisation of the UK could result in there being no jobs in Scotland at all.

Mr. Bill Tynan (Hamilton, South)

Can my hon. Friend put that into perspective by hazarding a guess about employment levels in Scotland if the Faslane operation were closed and Trident removed from the Clyde, as is the current policy of the Scottish National party?

Jim Sheridan

My hon. Friend makes a perfectly valid point. There are debates on nuclear disarmament on both sides of the argument, but there is no doubt that an independent Scotland would jeopardise the jobs at Faslane and Coulport. Although the SNP's policy is to remove that facility, I have never heard it talk of replacing that facility, or engage in serious discussion on defence diversification.

Although the employment created by the defence industry is crucial to the economy of Scotland, we must also use every opportunity and resource to encourage companies currently engaged in the defence market to continue research into and development of commercial opportunities and markets that could be exploited to sustain jobs. We must remind ourselves that the Scottish economy is a sufficient beneficiary of the defence industry. Without this Labour Government's prudent handling of taxpayers' money and their long-term view of the country's defence needs, the resources required to protect and defend our country could not be found.

That is why I firmly believe that this debate is crucial to the defence of our country, to its manufacturing base and for the security of thousands of civil service jobs that could be lost by the unnecessary constitutional upheaval of independence. I ask my hon. Friend the Minister and all like-minded colleagues to use every opportunity to spell out to the UK electorate the dangerous and potentially disastrous consequences of the break-up of the UK. Real threats to world peace and our own security still exist. Those who argue that we should stop investing in the defence of our country and follow the Mel Gibson bow-and-arrow philosophy are, in my view, irresponsible and fundamentally wrong.

Several hon. Members

rose—

Mr. Deputy Speaker

Order. I can see that a number of hon. Members present wish to speak. It may be helpful if I indicate that it is desirable that the first of the Front-Bench speakers be called no later than 3 o'clock.

2.19 pm

Angus Robertson (Moray)

I am grateful to have the opportunity to take part in the debate. I commend the hon. Member for West Renfrewshire (Jim Sheridan) for securing discussion of a vital subject: the defence industry in Scotland. I thank him for his gracious comments about the untimely death of the mother of the parliamentary group leader of the SNP in Westminster. I will pass on his comments.

I take the opportunity to commend people in Scotland, who do much to support the service community. I commend communities such as Lossiemouth in my constituency, which last week reelected an SNP councillor, Joyce Stewart, to represent the ward and RAF Lossiemouth. That commendation applies to communities that support defence and manufacturing industries. Many of those communities have ignored the Tory scare tactics of Labour Ministers who have demeaned their office by creating false uncertainty. I single out Rosyth East, which has again returned an SNP councillor.

The defence industry in Scotland does not operate in isolation. It is an integral part of the Scottish economy and it is boosted or buffeted by the Government's macro-economic policy, as well as their determination to support domestic and overseas contracts. There is no dispute between any Members, regardless of our political persuasion, about the skills of workers in Scotland and about the wish of their management to succeed.

We need to understand the underlying realities of manufacturing and industry in Scotland at present to assess properly whether Scotland's potential is being realised. Although the hon. Member for West Renfrewshire has done much to bring the issue to the fore, I was gobsmacked that he was unable to confirm whether more or fewer people have been employed in the industry since the Labour party came to Government. I shall return to that shortly.

Mr. Davidson

I am glad that the hon. Gentleman gave way before he moved too far away from mention of particular parliamentary constituencies. I draw his attention to the Govan constituency, which his party failed to win despite the best efforts of many. That constituency is particularly involved in shipbuilding. Will he clarify how many aircraft carriers an independent Scotland will build? In the run-up to the next general election, how many aircraft carriers will his party commit an independent Scotland to building in that yard in particular?

Angus Robertson

I am grateful to the hon. Gentleman for bringing up the issue of shipbuilding, which is close to his heart and to the heart of other hon. Members who represent shipbuilding constituencies. It is a subject that I shall return to later. I will also deal with whether there are more or fewer shipbuilding jobs in Scotland now than when Labour came to power. I will answer the hon. Gentleman's question.

If the Scottish economy, or the defence industry in Scotland, had been at the centre of Labour's plans, we may have had more to celebrate. Hon. Members should be aware that since 1999 the Scottish economy has grown at only a third of the rate of the UK economy as a whole. In fact, Scotland has the worst growth record of any country in the European Union. Since Jack McConnell came to office, Scotland's economy has shrunk. Sadly, unemployment in Scotland is still the highest among the constituent nations of the UK. It is 20 per cent. higher than the average of small EU countries.

Sadly, without the best opportunities, people are leaving. That is why Scotland's population is shrinking, while the UK's is growing. Scotland's population is projected to decrease by 10 per cent. over the next 40 years, while the UK population is set to increase by 10 per cent. Ministers, and no doubt Government Members, will claim that since 1997 the UK Government's policies have created the most stable macro-economic environment for a generation, which is of direct benefit to the defence industry in Scotland. Sadly. the only stability has been that of stable decline, which has affected the defence industry in Scotland.

John Robertson (Glasgow, Anniesland)

I wonder whether the hon. Gentleman could get off the point- scoring part of his speech and put things into the perspective of what has been happening in the world. Does he think that the ending of the cold war just might have had something to do with reductions in the defence industry?

Angus Robertson

I am grateful for the hon. Gentleman's intervention and explanation of why there have been fewer jobs in manufacturing in the defence industry in Scotland since the Government came to office. I seem to remember that the Soviet Union collapsed in 1989. The Labour Government came in quite a while afterwards and are the subject of the debate at present. The hon. Gentleman's explanation is not much of an excuse for the economic instability that we have suffered in Scotland. That stable decline needs to be addressed by the Government to help boost all industries and manufacturing, including the defence industry.

Labour Members have been falsely claiming success in securing defence jobs in Scotland since 1997. The reality is that the jobs tally has been in decline. I posed a question to the hon. Member for West Renfrewshire but did not get an answer. The record on job retention and creation consists of a litany of failures. Since Labour came to power in 1997, we have had 250 job losses announced at Faslane; hundreds of job losses at British Aerospace at Prestwick as a result of the end of plane-making; job losses at Yarrow's and Kvaerner on the Clyde; and—this will be of interest to the hon. Member for Glasgow, Anniesland (John Robertson)—a total loss of 2,400 jobs in shipbuilding in Scotland. Of course, thousands of jobs were also lost with the closure of the Royal Ordinance factory at Bishopton, of which I am sure the hon. Member for West Renfrewshire is aware.

During the 1990s, defence equipment employment in Scotland plummeted from 14,000 in 1990–91 to 6,000 in 1999. There are reports that that figure has now dropped to around 5,000. [Interruption.] The Minister poses a question from a sedentary position about what prospects an independent Scotland would have in that regard. I draw her attention to the fact that one company in Sweden—a small, northern European country, which is neutral and not a member of NATO—employs nearly three times as many people as are employed in Scotland in the manufacture of equipment for the armed forces. That completely nails the lie about job insecurity with the normal status of independence. If a country such as Sweden can have a vibrant defence industry, why can we not emulate that record?

Mr. Tynan

The hon. Gentleman has indicated that jobs have been lost since 1997 because of Labour party policies on the defence industry. What level of employment would exist in the defence industry in Scotland if the SNP's current policies were put in place?

Angus Robertson

I am grateful to hon. Gentleman for raising that point. It is important that all hon. Members understand the reality of the situation under the current Government and the options for change. Were Scotland's tax contributions to the Ministry of Defence to be spent in a Scottish military context, the change would be vast. The reality is that there has been a decline in manufacturing and in uniformed and civilian staff in the armed forces.

On the issues raised by the hon. Member for Glasgow, Pollok (Mr. Davidson), Members have mentioned the recent success of securing aircraft carrier and Type 45 orders for Scottish yards. I am convinced that workers at Scottish yards will produce the world-beating quality for which they are known. That is why they received the orders in the first place. I am certain that no Government Member would suggest that the yards received the orders because of the graciousness of one political party. They received them because the workers at those yards are well known for the quality of their labour and of the work that they produce.

My only regrets about the orders that have come to Scotland were adequately expressed in a Westminster Hall defence debate by the hon. Member for West Renfrewshire. He said that the Government were "encouraging companies such as BAE Systems and Thales to invest in quality jobs, albeit in the central belt."—[Official Report, Westminster Hall, 1 May 2002; Vol. 384, c. 187WH.] That is a big problem for the north of Scotland, although in saying that I take nothing away from the workers on the Clyde and elsewhere who are involved in shipbuilding. That major problem could have been dealt with if at least part of the orders had gone to the Nigg fabrication yard.

Mr. Davidson

rose—

Jim Sheridan

rose—

Angus Robertson

I have already given way.

The yard that once employed 3,000 people is mothballed and skilled workers have to emigrate, or commute vast distances to work in the sector.

Members of the Amicus trade union, some of whom lobbied Members of Parliament this afternoon, have dealt with that problem. I do not know how many Members present in the Chamber had the opportunity to speak with Amicus members about what is happening to BAE Systems. It was impressed on me and other Members that there is a serious prospect of major job losses in Scotland—at Prestwick, where 195 jobs are under threat, further south in Woodford and in Charlton, Wharton and Broughton, which I hope I pronounced correctly.

I have a special interest in the difficulties of the Nimrod programme, for the simple reason that the entire maritime reconnaissance fleet is stationed at RAF Kinloss in my constituency. I therefore wish to ensure that the Nimrod project delivers and that the total number of Nimrods that has been earmarked for construction by BAE Systems is supplied. I have sympathy for the BAE workers who fear that their jobs are threatened. I hope that the Minister will take their concerns on board in her discussions with Amicus.

Sandra Osborne (Ayr)

I also hope to speak about the Nimrod contract. I share many of the hon. Gentleman's concerns. Will he acknowledge that both the Government and BAE Systems are putting substantial funding into that contract to ensure that it gets off the ground?

Angus Robertson

It is interesting that some cost overruns are good and some are bad. I cannot remember what the latest tally is for the increasing cost of the Scottish Parliament but the increase in the cost of the Nimrod contract is nearly £300 million. While we should rightly consider any measure that retains jobs, from a taxpayer's perspective, we should ensure that companies carry out contracts efficiently and effectively. I shall discuss that at a meeting with the Ministry of Defence tomorrow afternoon

I appeal in a non-partisan spirit to the Minister to take on board and explore my suggestions, which would benefit the defence industry in Scotland. Fantastic opportunities are offered through offset contracts. Members will be aware that an offset refers to the compensatory trade agreement whereby the purchasing nation requires the exporting company to reduce or to offset the purchase price of a defence product or service. Offset is otherwise known as industrial participation, and according to the Society of British Aerospace Companies Ltd., it is worth more than £4.7 billion. More than £2.5 billion of that is in the form of indirect offset into the UK. Industrial participation is increasingly used by the MOD in evaluating competitive procurement bids, and it seems that the value to the UK of direct offset is likely to increase as companies exploit its potential as a marketing tool. That is also open to companies throughout Scotland and in the rest of the UK

Unfortunately, the Library has been unable to find any substantial information in the public domain that gives an indication of the geographical spread and regional values of individual offset contracts. That contrasts markedly with the situation in the United States. Under section 309 of the Defense Production Act 1950, the US Department of Commerce is obliged to prepare an annual report for Congress on offset in defence trade. Specifically, the report examines the impact of offsets on the US economy and its defence industrial base

Will the Minister tell us the value of offset contracts in Scotland, and what efforts the Scotland Office is making to secure offset contracts? Why has it been possible for the US authorities to be open, transparent and accountable, while in the UK, the Government cannot account for billions of pounds worth of contracts? When will the UK Government publish those key statistics?

Sadly, the standards of defence services in Scotland are also being challenged by the Government's privatisation agenda. In particular. that is felt in Labour plans to privatise the defence fire service. I pay tribute to the Transport and General Workers Union and to the hon. Member for Selby (Mr. Grogan) for their part in the campaign against that ludicrous idea. The privatisation is vigorously opposed by my constituents, especially those who depend on the cover of the DFS at RAF Lossiemouth.

Will the Minister either confirm or deny that the Government are considering decoupling the DFS privatisation from the airfield support services project? The SNP and I would very much welcome that. I hope that that position is supported by the right hon. Member for Edinburgh, East and Musselburgh (Dr. Strang) and the hon. Members for West Renfrewshire, for Glasgow, Anniesland, for Glasgow, Baillieston (Mr. Wray), and for Dumfries (Mr. Brown), who signed early-day motion 853 against the privatisation during the previous Session

Anne Picking

To follow up the question asked by my hon. Friend the Member for Glasgow, Pollok (Mr. Davidson), how many frigates would the SNP policy produce?

Angus Robertson

What is important to people working in the manufacturing sector is knowing whether their jobs are secure. What the Government—and Labour Members—have to ask is whether they will honour the legal and binding contracts that have been entered into. All the projects being carried out in Scottish yards are subject to legal and binding contracts. Those jobs are and will be secure. The only thing that would undermine jobs in Scotland is a UK Government, and Labour Ministers and Members, being prepared to countenance breaches in standing, binding contracts

The hon. Lady needs to look to her Front Bench rather than to the official opposition in Scotland if she is concerned about whether people's jobs are at risk. I hope that she gets the opportunity to catch your eye, Mr. Deputy Speaker. Perhaps then she could tell the Chamber whether she is opposed to the privatisation of the defence fire service—an idea so ludicrous that even the leader of the Conservative party at Westminster described it as a privatisation too far—or perhaps the hon. Lady is to the right even of the Conservative party.

Jim Sheridan

The hon. Gentleman rightly paid tribute to the workers in Govan and Glasgow for the quality work that they carry out. If the SNP were to gain power, would it carry out the current orders in both those yards? How would the hon. Gentleman secure those jobs, and how many aircraft carriers and frigates will the SNP build in Scotland?

Angus Robertson

I am not certain whether the hon. Gentleman understands that the companies that are building for those contracts are private companies. It is not for the Government of an independent Scotland to undermine a commercial contract that has been entered into. The only people who are likely to breach a commercial contract are the UK Government, and I think that that is unlikely. Perhaps the hon. Gentleman has less faith in his Front-Bench team.

Mr. Davidson

Will the hon. Gentleman give way?

Angus Robertson

I will not, in fairness to the other hon. Members who want to take part in the debate. Mr. Deputy Speaker has urged hon. Members to give others an opportunity to speak

In conclusion, the reality of Scotland's defence industry is different from the rosy picture painted by the Government. There is tremendous potential for a normal independent country where companies can bid for contracts in a competitive economic environment predicated on growth. There is a sad contrast between that and the reality of the decline in employment under Tory and Labour Governments, as well as the Government's continuing privatisation agenda. Scotland deserves better and our defence industry deserves better. Taking the right decisions in Scotland is the best guarantee of success.

2.40 pm

John Robertson (Glasgow, Anniesland)

I shall try to address the matter without engaging in political points scoring against a party that has shown a sad lack of understanding of industry in Scotland. I congratulate my hon. Friend the Member for West Renfrewshire (Jim Sheridan) on securing the debate. Once again, he has shown leadership on an issue about which he is knowledgeable

It will not come as a surprise to hon. Members to learn that I intend to speak about shipbuilding and that I will concentrate in the main on the Govan and Scotstoun yards. The Scotstoun yard is in my constituency and I hope that it has enough work to last beyond my retirement, which is something that I doubt that any previous Member for my constituency—its boundaries have changed—could have said.

The shipbuilding industry was decimated by successive Governments in the 1970s and written off for privatisation in the 1980s. It is easy to sell off an industry for money, but it is impossible to invest while money is being given out to shareholders or friends, which is exactly what the Conservative Government did. [Interruption.] The hon. Member for Moray (Angus Robertson) has been chirping away. I say to him that when an industry has been run down and has not been invested in, it takes time to build it up. The fact of the matter is that 3,000 jobs still exist thanks to the Labour Government. He may not want to accept that, but it is a fact.

Mr. Peter Duncan

Am I to understand it that the hon. Gentleman's argument is that an industry must be in the public sector in order to make significant investment? If that is the case, it is an extraordinary argument that belies the evidence of the past two decades. Industries that require investment can generate it in private industry, and have done so successfully in Scotland.

John Robertson

I have great respect for the hon. Gentleman, but he cannot put words in my mouth. I never mentioned that point. I said that his party sold off the shipbuilding industry for money alone and did nothing about investing in what was left because it wanted to make sure that there would not be a shipbuilding industry in this country. There were 200,000 workers in the industry in 1960, but now there are only 30,000 in the whole country. The demise of the shipbuilding industry is sad.

Angus Robertson

The hon. Gentleman's interest in shipbuilding is undisputed, but can I ask him whether there are more or fewer shipbuilding jobs in Scotland since Labour came to office?

John Robertson

I thought that the hon. Gentleman had answered that. There can be no jobs without investment, which is at last coming into shipbuilding. He knows that there are fewer jobs, and I know that. Why are there fewer jobs? It has nothing to do with the Labour Government, which is what he would like to suggest. Thanks to the Labour Government, there are more jobs today than there were a year ago, and there will be more of them in the years to come

Modern apprenticeships—the first for more than 20 years—are currently increasing employment on the Clyde. There were 42 new apprenticeships last year; there are 112 this year; and there will be more to come in the following years. I do not take credit for that as a Labour Member; I take credit for helping to support my constituency and my constituents. The company has been pointed in a direction that it had forgotten about.

Jim Sheridan

As a former shipyard worker who was made redundant, I know that the reasons for job losses were the introduction of new technology—shipbuilding industries elsewhere have been decimated by new technology—and, most important, the end to the demarcation of yards. That relates to the point about congratulating the workers of Glasgow and Govan. The job losses were not the result of any lack of investment.

John Robertson

I thank my hon. Friend for that point.

The fact of the matter is that three Type 23 frigates have been sold to the Sultan of Brunei in recent years. One is ready to be delivered, with the other two to follow shortly. There are also six Type 45 destroyers and two ALSLs—alternative landing ships logistics—to be built, and we have more than our fair share of carrier work for the Scotstoun and Govan yards. I hope that the Ferguson yard in the constituency of my hon. Friend the Member for West Renfrewshire picks up its fair share of work. It has 400 workers who need work

My hon. Friend the Member for Greenock and Inverclyde (David Cairns) has also seen shipbuilding decimated in his area. Today, shipbuilding practically does not exist in the lower Clyde. The upper Clyde is thriving, but on reduced amounts of work. The Ferguson yard must be examined too. We need the work that exists, and more of the same. It is up to us on the Clyde to show that we are still a force to be reckoned with.

Mr. Davidson

I suggest that my hon. Friend does not take too much for granted. It is not true to say that the aircraft carrier construction has been firmly committed to the Clyde. It is clear that the initial decision leads in that direction, but a number of break points during the process of ordering and contracting could easily result in manufacturing work being taken to a foreign yard should Scotland become independent. Similarly, the second tranche of frigates has not been firmly committed at this stage, and they could be taken away and given to Vosper if Scotland became independent. Export orders are dependent on a core stream of work from the Royal Navy, and they might also be lost if Scotland became independent. Is my hon. Friend clear about that?

John Robertson

I do not need to re-emphasise my hon. Friend's point, but I commend him for the work that he has done as chair of the all-party group on shipbuilding and ship repair. I have no doubt that the lobbying of Ministers by him and other colleagues helped to secure orders for the Clyde and other areas of the country. They got the rules changed when they managed to secure written confirmation from the Minister with responsibility for defence procurement that all MOD ships would be built in Britain, and that no single part would be built elsewhere, such as in Holland as happened in the case of one ship. My hon. Friend helped to lead ghat effort, and it was a great win for those who have been fighting for so many years.

Where will we get more ships? My hon. Friend said that we should not stand by and say that the ships we have now will be sufficient for the Navy for evermore. We must look to future sales. Most of the early attacks on Afghanistan and Iraq came from ships: rockets were fired from ships, planes were launched from ships, and troops were initially landed from ships. Britain does not have that kind of naval force at present. I know that that is being considered under the strategic review, which represents a new chapter. I hope that it continues to be a subject of the strategic review as the days and years go by. We cannot stop at this point: there is more to be done

We must consider the types of ships that we have. There are ports throughout the world now that will not admit single-hull ships. We may have to build many double-hull ships. My question to the Minister, which I do not expect her to answer today, is how many of our naval ships are single hull and how many will have to be replaced with double-hull ships? Perhaps I could take credit for stimulating shipbuilding, particularly on the Clyde.

I have spoken for long enough—some would say too long. Scotland has been very important to the defence industry for many years. Even today, with only 5 per cent. of the population, it still supplies 8 per cent. of the troops on the ground. We have carried out most of the shipping of goods in the past, and we have done more than our fair share of swirling the kilts, playing the pipes and leading the fight from the trenches. Scotland has a proud heritage and tradition in the defence industry, and I hope that it will continue

I conclude with a bit of point scoring. Withdrawal from NATO would be an absolute disaster, not just for Scotland but for Britain and the rest of Europe. I shake my head at some of the things that have been said about that. I ask the Minister to support the industry in the future.

2.51 pm

Sandra Osborne (Ayr)

I congratulate my hon. Friend the Member for West Renfrewshire (Jim Sheridan) on securing the debate. I very much agree with his assertion that many jobs that have been created and secured in Scotland by the defence industry would disappear like the proverbial snow off a dike if Scotland were ever to become independent

I wish to raise the matter of the Nimrod contract, which is very important to my constituency. In March, an agreement was reached between BAE Systems and the Ministry of Defence to halt the production phase of Nimrod. That resulted in the loss of 1,005 jobs at BAE's five sites throughout the UK. In my constituency, 195 jobs were lost, as the hon. Member for Moray (Angus Robertson) has already said. I am pleased that he is taking such a close interest in my constituency. It is more than the Scottish National party candidate did at the Scottish Parliament election, but it is welcome nevertheless

I met BAE's management and the Minister responsible for defence procurement to discuss the matter. I had been aware for some time that the contract was in serious trouble. The Government have provided substantial funding to put the contract back on track, as has BAE Systems. There was a real prospect that the contract would have been terminated if that had not happened. The negotiations were difficult for both sides, and I appreciate that the action that had to be taken was taken. However, as the revised contract stands, all production after the third aircraft will be stopped while the design matures and an assessment is made of the true cost of development. That is likely to create a two-year gap between the design and development phases and the date for restarting production.

John Robertson

What does my hon. Friend think will happen to the skilled labour during those two years? Will it go to other industries and be lost to the defence industry for ever?

Sandra Osborne

That is a good question, and it was asked at the lobby earlier today. When the aircraft carrier contract was announced, BAE Systems and Thales both suggested that there was already a 20 per cent. skills shortage in the area, so it is a major concern

As I said, the company announced redundancies. The job losses will mean that employees who currently work on Nimrod will leave the company, thus adding to the skills shortage to which my hon. Friend referred. That will also have clear implications for the Government, because increased costs will be incurred as new workers on the project will have to go through a learning curve when production is resumed. Where will we get the skilled work force that will be needed once production starts again? As an example of the many lessons that have been learned, the inner wing on the first Nimrod started at a baseline of more than 75,000 hours. By the fourth aircraft, production time had fallen to just over 25,000 hours and was still falling to reach a target of less than 10,000 hours.

I have been aware of the tremendous efforts made by the work force at Prestwick to cut the costs of the project and to recognise the problems. Their efforts, as I have illustrated, had already started to pay dividends before the announcement, but if that skill is lost to aircraft manufacturing, it is likely to be lost for ever. Surely the strategy should be to fill the two-year gap by keeping work going in the meantime. It is recognised that some elements of the strip down and manufacture, which are not subject to design change, could continue in the interim, thereby retaining some of the current work force and enabling a more realistic plan for production to restart. That would also help to reduce redundancies and secure the affected sites for the future

I have a list of stable work that could continue in the meantime, which will not be subject to design change in the future. I hope that the Minister will use her good offices to put forward my suggestion to the ministerial team at the Ministry of Defence. As the hon. Member for Moray said, a successful lobby took place today by Amicus. The fact that it was well attended by Scottish MPs was much appreciated. The trade unions believe that it would be feasible to bring forward such work now. They are not asking for more money from the Ministry of Defence, only that agreed funding is brought forward early

Three important issues are involved, the first of which is mitigating the redundancies. Secondly, capability must be retained and. thirdly. we must avoid substantial restart costs. Such issues are serious and the trade unions have put forward practical proposals that merit serious consideration. It is imperative that, whenever the contract recommences, Prestwick and Scotland benefit from such a substantial investment by the taxpayer. From my discussions with the Ministry of Defence and BAE Systems, I am aware that that has not been ruled out. It is especially important at the moment while the aerostructures division of BAE Systems is up for sale. It may be significant that the Nimrod work was not included in that sale. Nevertheless, whatever the outcome, will the Minister make representations on behalf of the Scottish work force to make sure that Prestwick receives its fair share of the contract when it recommences and any other defence contracts in future?

2.57 pm

Mr. John MacDougall (Central Fife)

I am aware of your appeal at the beginning of the debate, Mr. Deputy Speaker, so I shall shorten dramatically my contribution. I congratulate my hon. Friend the Member for West Renfrewshire (Jim Sheridan) on securing the debate on the important Scottish defence industry. I have close historical connections with the defence sector because of the long battles that took place at Rosyth naval base during the review of the nuclear defence industry. I say from the outset that the Government's performance in the allocation of the aircraft carrier programme was carried out in a competitive and honourable fashion. I cannot say that that was the case throughout the Rosyth escapade, but it is best to lay that particular matter to rest

The importance of a defence industry cannot be understated. Our important discussions highlight that and, while we have experienced some political point scoring, there is a need for honesty about the value of the industry, not only to the defence sector. We must remember that many industries that are not defence related feed into the defence sector. It is important to bear in mind that family businesses and shopkeepers throughout Scotland depend on the defence industry. We are not talking only about defence, but the unequivocal value of the industry. When it is bid for and the money is available, it will guarantee resources in the communities that we represent. We should not lose sight of that

I wish to express particular concern about the uncertainty of the commitment on the aircraft carrier programme. I hope that the Minister will assure us that she will use her best endeavours to keep the programme on schedule. In my constituency and in central Fife, companies such as Raytheon are dependent on the defence sector and the jobs in it. They are only asking for a fair opportunity; they do not want unfair political intervention. They want to ensure a level playing surface for companies, which is the only fair way in which to allocate contracts

My hon. Friend the Member for Dunfermline, West (Rachel Squire), who represents Rosyth, was present earlier and apologised for her departure to consider other defence matters. Rosyth has always had a proud role in the defence sector, so the issue does not affect only the west coast—that has not been presented as an argument today, although the impact on the west coast is serious. There is a Scottish dimension to the programme and Rosyth stood to gain significantly from the work load

If we do not have the opportunity to retain programmes to which the Ministry of Defence is committed, jobs may be lost in the intervening period. Clearly, it is much more difficult now for companies to retain staff when there is no work for them. if skilled labour is lost, the present successful economy and the employment figures that are lower than they have been for around 30 year; may be affected. People have a better opportunity of moving on and there is a danger of losing skills from the industry. Any internal loss of opportunity may result in the loss of skills and affect a company's competitiveness when making a bid later. That may threaten the work coming into Scotland and that makes a contribution to the Scottish economy

My appeal today is that we should all recognise that, despite any political differences, it is important not to create fear among those employed in the defence sector or indulge in scaremongering. We should tell them loudly and clearly that we care about their future and their valuable skills, that we are doing our best to ensure that they are given a fair opportunity of using those skills on defence work and in the vital industries further down the line that supply the defence industry, so that those people have the best chance to continue to make a contribution

I have been brief in accordance with your wishes, Mr. Deputy Speaker, and am grateful for the opportunity to express my concern about the future of the defence industry in Scotland. I thank my hon. Friend the Member for West Renfrewshire for providing us with the opportunity to debate this important issue today.

3.2 pm

John Thurso (Caithness, Sutherland and Easter Ross)

I congratulate the hon. Member for West Renfrewshire (Jim Sheridan) on securing this timely debate. I shall show that it is particularly timely, given a matter that concerns my constituency.

The defence industry is of major importance to Scotland, providing a vital backbone for employment. In particular, the Government's shipbuilding programme provides continuity of work in many traditional industries and allows them to be developed. It is important to build on those employment and enterprise opportunities

Defence-related industries provide that opportunity, but, as anyone who has ever undertaken a sector-wide analysis will know, an opportunity may also be a threat and I want to enter one caveat. Scotland's high dependence on defence and defence-related industries comes with the threat that jobs may be lost in future as they have been in the past. It is vital that the Government, in encouraging and supporting the defence industries, ensure the sustainability of employment so that the situation does not arise, as it has in the past, in which today's jobs become tomorrow's redundancies.

It is vital that the Government plan wisely. To a great extent, that will depend on the development of our foreign policy. Who could have foreseen two years ago what we would be asked to undertake at this time? Clearly, that will be an ongoing debate. The recent chapter of the strategic defence review, produced in July 2002, acknowledges that there is still much debate to be had. The essential caveat that I enter is that, in our planning, we must be careful that jobs are not simply for a short period, but remain sustainable

The defence industry can broadly be split into two parts. One part relates to defence establishments, the service contracts that go with them and the related civilian employment. The other part is defence procurement. I shall concentrate on that, but briefly mention the other part of the industry. Our establishments provide welcome and valuable economic support, often in areas that do not enjoy heavy industry and jobs. Interestingly, of the 170,000 service personnel deployed throughout the United Kingdom last year, 14,000 or some 8 per cent., were in Scotland. More interesting perhaps is the fact that, of the 73,000 civilians employed, some 8,000 or 11 per cent. were in Scotland

The bases provide a welcome anchor to many local economies. The Vulcan royal naval training test establishment in my constituency is responsible for the land testing of nuclear reactors for use in all our submarines. It recently landed a new 13-year contract, which is a tremendous support for that economy. The establishment employs 280 people, supported by some five naval staff, and is worth more than £10 million directly to the local economy. There are also two establishments in my community that, unusually, have all the inconveniences, such as noise, but none of the economic benefit. These are the bombing range at Tain, where all the aircraft come from a neighbouring constituency, and the live firing range at Durness. I have made this point before, so I shall not labour it, but the relationship between such places and the Ministry of Defence in the 21st century needs to be considered.

Angus Robertson

During the previous Session, the hon. Gentleman signed an early-day motion on the defence fire service. Will he take this opportunity to reaffirm that that represents his position and that of his party, and impress on the Minister that the Government should reverse their agenda of privatisation of the defence fire service?

John Thurso

If I signed an early-day motion, I am sure that it represents my position and that of my party

As has been mentioned, defence is an extremely important industry throughout Scotland. It accounts for one in 50 jobs, but I shall not labour the figures. It is interesting that defence does not figure merely in the traditional industries, but is at the cutting edge of modern technology. Research and development has been mentioned, and a point that I came across in researching this subject is that, in Scotland, 31 per cent. of R and D expenditure has been for defence purposes, compared with 15 per cent. in the UK as a whole.

John Robertson:

Does the hon. Gentleman agree that it is a sad fact that R and D in Scotland lags well behind that in the rest of the United Kingdom? Perhaps he could say why he thinks that that is so.

John Thurso

I certainly agree, but as we must keep an eye on the clock, I should like to proceed with my speech.

I want to deal with shipbuilding and Nigg. I welcome the Government's announcement and the statement that was made at the last Scottish Grand Committee. I shall not go over that ground again, but the Type 45 destroyers and the 10,000 jobs that will come with the future aircraft carriers are a welcome and necessary boost for Scottish industry. The hon. Member for Moray (Angus Robertson) referred to Nigg. If I may correct him, at its height, there were more than 4,000 jobs, not 3,000, but I am sure that he will join me in congratulating the management on the 200 jobs that they secured in one of the sheds two weeks ago. It is not totally in mothballs. In pushing for some of the work from the future carriers to go to Nigg, I want to make it clear that that would be a relatively small and specialised part of the total expenditure, which the expertise at Nigg is well capable of handling. Placing work there would not be a particular threat to either Rosyth or Clydeside. The key factors are the concept of the dry build, the size of the dry dock, the heavy lifting equipment and the skilled work force

I am delighted to say that I had a constructive meeting with the Secretary of State for Scotland some six or eight weeks ago. The debate is timely because this morning I had a meeting with Lord Bach, who has given me a commitment to make an early visit to Nigg to see precisely what can be done. Immediately after this debate I am going into a meeting with KBR Caledonia, which operates the shipyard. There is a genuine possibility of securing work, and I am grateful to the Government for the support and help that they have given me in pushing the case forward

Given the constraints of time, I shall conclude by saying that the Scottish defence industry is important because it provides opportunities in other areas. We must plan wisely to ensure a commitment on jobs, which must be sustainable. I ask the Government to continue to support the creation of jobs not only in the central belt but throughout the rest of Scotland, and in the highlands in particular.

3.11 pm

Mr. Peter Duncan (Galloway and Upper Nithsdale)

In traditional fashion, I, too, join in the cross-party welcome for the success of the hon. Member for West Renfrewshire (Jim Sheridan) in securing the debate, which follows a similar debate last year. For those of us who have not worked in the defence industry and have not worked on Clydeside, it is great to hear contributions from him and the hon. Member for Glasgow, Anniesland (John Robertson), who know the communities and have worked in the industries. I greatly value their contributions. With a few exceptions involving the usual suspects, today's debate has been of a relatively high quality and has involved all parties in Scotland. I welcome its relevance, given the dramatic developments since our debate on 1 May last year

The Scottish defence industry obviously makes a substantial contribution to Scottish armed forces. I understand that the debate is not about Scottish armed forces, but I seek your indulgence, Mr. Deputy Speaker, given their importance to employment in Scotland. Our armed forces form 13 per cent. of the British Army and, as we have found out in the recent past, they have made significant and skilled contributions, particularly in Basra. We are all immensely proud of them

I am also aware that the families of servicemen throughout Scotland have made a huge contribution. Those hon. Members who do not have a defence industry locus in their constituencies all have constituents who have made sacrifices, in that they have been worried and concerned over the past few months. Similarly, we all have businesses in our constituencies that have made sacrifices by giving up their reservists. That is an oft-forgotten sacrifice made by industry not only in Scotland but throughout the United Kingdom. Because those businesses are flexible, they tend to be very small, and giving up an employee to go on reserve duty is a significant sacrifice for them. I should like to pay tribute to businesses in Scotland that have made that sacrifice in recent months

The defence industry obviously gives Scotland a significant boost. It is worth £1.6 billion to the Scottish economy and provides 8 per cent. of jobs and investment. We cannot gloss over it in a small annexe to a debate on the Scottish economy, of which it forms a significant part

As the hon. Member for Caithness, Sutherland and Easter Ross (John Thurso) said, the Scottish defence industry has a two-pronged risk and reward. As we develop our defence industry to its natural capability, there is the risk that we expose ourselves to over-specialisation. Getting that balance right is a significant challenge for the Scottish economy

I pay tribute, albeit briefly—I only do things to nationalists briefly—to the hon. Member for Moray (Angus Robertson) for his suggestion that one cannot divorce consideration of the defence industry in Scotland from consideration of other industry in Scotland. The two are very much intertwined

I regret to say to the Government that the decline of manufacturing industry in the UK and the specific decline of manufacturing industry in Scotland—part of which is defence—will have a dramatic effect on the ability of Scottish industry to subcontract to defence industries. I recently met a company of subcontractors in the defence industry, and they face exactly the same challenges of budgeting, taxation, red tape and administration as other small businesses in the defence industry the length and breadth of Scotland and the rest of the UK.

Angus Robertson

Does the hon. Gentleman agree that it would be of benefit to everyone with an interest in the defence industry if the Government published statistics showing the value of offset contracts so that we could be fully aware of whether companies in Scotland and elsewhere in the UK are making the most of what those contracts have to offer?

Mr. Duncan

The hon. Gentleman is right about the offset contracts, in as much as we should be maximising the value of the whole defence industry to the Scottish economy. There is no doubt that more transparency on that is the least that should be expected of any Government, and no less of this one

As I mentioned, 13 per cent. of those employed in UK forces are from Scotland. It is a significant employer by any manner of means. I would point out that in the UK there are 6,000 fewer people employed in the armed forces than there were in 1997. That has had an effect in Scotland, and we need to see some concentrated attempt from the Government to redress that balance and address the recruitment and retention crisis that plagues our armed forces

I said that we have had a mixed debate. The mixed element came from the hon. Member for Moray, who possibly faces the frightening prospect of being defence Minister in an independent Scotland. If that did not frighten anyone else in the House, it certainly frightened me. I find extraordinary the appeal that he made for jobs for the carrier contract to be dispersed around Scotland—particularly to Nigg. His double standards on that matter know no bounds. The simple fact is that his party's policy would leave Scotland under-defended. It would not develop new orders for the products or deliver further work for shipbuilding contracts, never mind the delivery of an industry that is capable of fulfilling the existing ones

To give a further example of SNP doublespeak on the defence industry, in my constituency I recently saw off the SNP MSP. As part of his—unsuccessful I am delighted to say—electoral plank, he criticised the run down of Qinetiq in West Freugh. I heartily agreed with him that that was a dreadful development for my part of the world. However, the simple fact is that Qinetiq is a high-quality, highly specialised, high-technology partner to the UK Government in defence, and there would be no research and development in an independent Scotland defence force—certainly not of the quality of the work done at West Freugh

The carrier orders are the obvious significant developments since we last considered these matters, and I would like to make a few further observations to those that I made in response to the statement given at the last Scottish Grand Committee. We retain considerable reservations about the link with Thales, particularly given the developments of the last two or three months with regard to the French Government. We remain concerned about the way in which such contracts are awarded over decades rather than years, particularly for the maintenance and development of technology over those decades. It is of concern that we are tying ourselves to a foreign Government and a situation in which we have no guarantees for the future

I accept entirely the point made by the hon. Members for Glasgow, Anniesland and for West Renfrewshire about the skills gap. That is surely the highest priority, following on from the announcement about the carrier orders. I accept that it is a particular locus for the Scottish Executive, but in some way we all have to address the skills gap in Scotland. Otherwise, we will not be able to fulfil these orders to the maximum of our abilities. In addressing the future of our shipbuilding industry, I am happy to quote the hon. Member for Glasgow, Anniesland—I hope correctly this time—and say yes, we have an opportunity for the future. However, we must get beyond this crisis-to-crisis stumbling on Clydeside and the other shipbuilding yards throughout Scotland. It is not acceptable simply to delay major decisions until we hit a brick-wall crisis, then rely on another major decision by the MOD suddenly to come to the rescue. We require long-term planning, we must address the skills shortage and, crucially, we must have a level playing field internationally. Concerns remain that the international shipbuilding market is not universally fair to Scotland's defence industry

The defence industry cannot be overlooked when considering a successful Scotland in the future. I commend the Government for the part that they have played in ensuring that defence decisions that apply to Clydeside have been taken when necessary. I look for further decisions in the near future, to take the industry forward.

3.20 pm

The Parliamentary Under-Secretary of State for Scotland (Mrs. Anne McGuire)

Those hon. Members who would recognise it will know that this is not my normal voice. I put that down to a great deal of zealous campaigning last Thursday—with significant success

I congratulate my hon. Friend the Member for West Renfrewshire (Jim Sheridan) on securing this important debate. In doing so, he has allowed us to consider an industry that is one of the cornerstones of the Scottish manufacturing base, notwithstanding some of the comments that we have heard this afternoon. I should also like to thank my hon. Friends and other hon. Members who have taken the time to participate. I am delighted to respond to the points raised, although I suspect that I will not be able to respond to very many of them. I shall cover as many as I can

Like most Scottish MPs, I am well aware of the important contribution that Scottish defence industries make to the Scottish economy, and recognise the value of Government spending on defence programmes and the contribution that that makes to the manufacturing sector in Scotland. It is no accident that, during the past 15 years and from two parties in Government, we have had no fewer than three Secretaries of State for Defence from Scottish constituencies. That highlights the importance that defence plays in the whole political dynamic in Scotland

I also recognise that the defence industry, in all its manifestations, from manufacturing through to the provision of home bases for service personnel, underlines the strength of the partnership in the United Kingdom: a view amply reinforced in the results of last week's elections to the Scottish Parliament. If there is one point that I should like to put to the hon. Member for Moray (Angus Robertson)—which picks up on something that my hon. Friend the Member for Central Fife (Mr. MacDougall) said—it is that defence is not just about the deployment of forces or the building of ships; it is about communities. It is about the schools, shops and local community facilities that are sustained by service personnel in—dare I say it—some of our more fragile areas. The hon. Member for Moray and his colleagues should ask the small shopkeepers how much they will lose if the whole defence industry is withdrawn from its positions in Moray. To be perfectly frank, it is not good enough for members of the Scottish Nationalist party who represent constituencies with a strong defence base to say that they support defence, when the party has at its core a policy of pulling Scotland out of NATO, out of the United Nations and into isolation.

Angus Robertson

Will the Minister give way?

Mrs. McGuire

No, the hon. Gentleman has had more than his fair share this afternoon. It is important that he is allowed the opportunity to reflect on some of those arguments, and perhaps consider how he can address them with his constituents

Almost every part of Scotland is touched by defence, from Caithness to the borders. The list of defence industries across Scotland includes everything from Crew Toll and the Gyle in Edinburgh to Rosyth, Faslane, Govan, Glenrothes, Hillend, Donibristle in Fife and Newbridge in West Lothian—it stretches across the whole of Scotland. [Interruption.] The hon. Member for Moray can chunter all he likes, but I shall not allow him to intervene

I do not want to reiterate some of the points made, but it is worth stressing that approximately £600 million of defence contracts are based in Scotland. As everyone here realises, that is not the full picture. There are all sorts of additional and added-value connections with defence: Scottish companies have subcontracts for defence expenditure not only in Scotland, but in other parts of the United Kingdom. A prime example is the 2001 award of the Bowman contract to CDC UK

Further benefits to Scottish industry included the subcontract work awarded to CDC UK by Alenia Marconi Systems at Hillend in Fife, which secured almost 100 jobs—an important security for the people in that community. AEA Technology in Thurso also provides employment in the constituency of the hon. Member for Caithness. Sutherland and Easter Ross (John Thurso)

Scottish Executive support mechanisms are also in place. They established a new facility in Glengarnock, creating an initial 600 jobs with the opportunity for more.

I said that I would try in a short space of time to answer some of the issues raised. While I am speaking about the hon. Member for Caithness, Sutherland and Easter Ross, I want to congratulate him on the way in which he has pursued the Nigg issue. He told us exactly what he had done. He had been to see my right hon. Friend the Secretary of State, and has had meetings with the various companies involved. That stands in stark contrast with the sniping—dare I use that word?—in a defence industry debate from some hon. Members from the Scottish National party sitting to his immediate left

My hon. Friend the Member for Ayr (Sandra Osborne) raised a concern about the Nimrod contract. I know that there was a lobby today. I am sure that some of the messages from that lobby will be taken to Ministry of Defence Ministers. I also assure her that I will discuss some of the comments that she made today with my colleagues in the MOD

We heard this afternoon about the decline in defence jobs. I want to tell the 1,600 employees at Clydeside, the 2,000 at Rosyth, the 2,000 at BAE Systems in Edinburgh, the 500 at AMS, the 600 at Raytheon in Fife and the 5,000 at Faslane that the claim that the Government are not helping out and supporting our defence industries is palpably untrue.

I do not want the hon. Member for Moray to go away with a complex. I shall give him just one nugget. I heard his comments on the offset contracts, and assure him that I shall raise that issue with my colleagues in the MOD

We have had an opportunity to reflect on the benefits of the defence industry in Scotland, but it is not all take. By being involved in that industry, we also provide a great deal of support, not only in high tech, important though that is, but in everything from warships to missile control systems, from uniforms and training to simulation systems. We cannot underestimate the input of Scottish industry: companies such as Thistle Garments in Cumbernauld, which produces waterproof outerwear for service personnel. It was awarded an MOD contract for 28,000 sets of high-tech combat clothing and is expected to create some 50 jobs.

Last week during the Scottish election campaign, I visited a carpet manufacturer in Aberdeen. I would not have expected to find anything to do with defence jobs in a carpet fibre factory in Aberdeen, but members of staff told me that they had a massive contract for guy ropes for tents. The company has picked up such contracts as part of its diversification—apparently, we are all putting down laminate flooring instead of carpets.

I appreciate that the time available to me is short, and I shall soon move to the subject of Ayrshire and Auchancrow, but I must say that the importance of the defence industry in Scotland is not open to question. If I could give just one message to colleagues, it would be that we should not undermine the importance of our defence industry by constantly harping on about what it does not do. We should be positive and concentrate on what it does do. If we need ambassadors for Scotland, we should look no further than the Black Watch, which acted with great dignity in Iraq. It was no doubt sustained in that theatre of war by a great deal of industrial technology, and, dare I say it, some of the more mundane things, such as clothing et cetera.

Mr. Deputy Speaker

Order. We must move on to the next debate.