Patricia Ferguson
Main Page: Patricia Ferguson (Labour - Glasgow West)Securing Scotland’s Future: Defence Skills and Jobs
Patricia Ferguson Excerpts
Patricia Ferguson (Glasgow West) (Lab)
I am grateful to the Backbench Business Committee for granting time for a statement on the publication of the Scottish Affairs Committee’s report, “Securing Scotland’s Future: Defence Skills and Jobs”.
As the House will know, significant increases in defence spending are anticipated as the UK works towards our commitment to spend 3.5% of GDP on defence by 2035. Our inquiry therefore examined a simple but important question: how can we maximise the positive impact of this spending in Scotland?
Scotland already has a world-leading defence sector, from shipbuilding on the Clyde and in Rosyth to aerospace, advanced manufacturing and cyber-capability. Growth in the sector has the potential to create more highly skilled jobs and support economic growth across Scotland—including, importantly, in rural and island communities.
The strategic defence review, the defence industrial strategy and the defence investment plan provide the framework for delivering these ambitions and for ensuring that Scotland is well placed to benefit from increased investment. However, our inquiry has shown that it is not a given that increased defence spending will benefit Scotland. We cannot afford to be complacent: ensuring that Scotland benefits will require long-term planning and co-operation between the UK and Scottish Governments to support jobs, skills development, innovation and growth.
The clearest message we heard throughout our inquiry was about skills. Employers, colleges, universities and trade bodies across Scotland repeatedly told us that the defence industry faces skills shortages, including in engineering, fabrication, welding, software, cyber and advanced manufacturing. This is despite major defence programmes such as for the Type 26 and Type 31 frigates and the Dreadnought-class submarines, which will require a sustained pipeline of highly skilled Scottish workers for years to come. This will be all the more important as the UK Government continue to win and sign deals for the export of Scottish-made defence products such as frigates.
We have heard similar messages about skills shortages in our inquiries into other sectors, including offshore wind, civilian shipbuilding and space launch, to name but a few. Many of those sectors, which are key to our economic prosperity and to the UK’s strategic interests, are competing for the same pool of skilled workers. Without investment in training and apprenticeships, there is a real risk of one sector solving its skills shortage by poaching workers from another sector.
That is why apprenticeships are such an important focus of our report. During our Committee’s visit to BAE Systems—part of which I am proud to say is located in my constituency—we met young people whose expertise and enthusiasm demonstrated the enormous potential of apprenticeships and early career routes in the industry. However, demand for apprenticeship places far exceeds supply, with engineering programmes often attracting many thousands of applicants for a very limited number of places.
Our report highlights the importance of that talent pipeline keeping pace with future demand. This will require the UK and Scottish Governments to work together effectively, as policies impacting the sector span both reserved and devolved responsibilities; defence policy, as we know, is reserved, while education, skills and apprenticeships are devolved. Our report calls on both Governments to work together to increase defence-related apprenticeships in Scotland.
Our report also welcomes direct investment through the defence industrial strategy skills package, through which Scotland will receive a share of the £20 million allocated to the devolved nations. While this funding is absolutely welcome, £20 million is a small fraction of the full £180 million UK-wide package, and it must be shared across Scotland, Wales and Northern Ireland, meaning that Scotland will receive a disproportionately small share of the total UK fund. Our Committee questions whether such a limited share of funding can really shift the dial on skills shortages and calls on the Government to explain how the funding is commensurate with the size, importance and potential of Scotland’s defence sector. We look forward to the Government’s response on that point.
Moving on from apprenticeships, our report also looks at the defence technical excellence colleges, or DTECs, which are specialist colleges designed to provide advanced technical training for defence careers. These colleges will help to develop the skills that employers tell us they need. The Committee heard overwhelming support for DTECs, and we believe they could have the potential to address persistent skills shortages.
The UK Government have proposed two DTECs in Scotland—one in the east and one in the west—and have provided funding for one of them. The establishment of both DTECs is subject to match funding from the Scottish Government. The Committee strongly supports the establishment of both colleges, and stated in our report, which was published last month, that we hoped to see the Scottish Government provide the funding required. We are very pleased that since the publication of our report, the Scottish Government have confirmed that they will provide the necessary funding, with both DTECs now going ahead. This is a positive outcome for Scotland, and reflects the joined-up approach that we need to see.
However, progress establishing DTECs in Scotland has fallen a little behind counterparts south of the border, and we are concerned that further delay risks Scotland being left at a disadvantage. We therefore urge both Governments to work with greater urgency to deliver those colleges, because the skills challenges facing the sector are too pressing for Scotland to miss this opportunity.
Our inquiry also examined the experiences of small and medium-sized enterprises. SMEs form the backbone of Scotland’s economy and play a critical role in the defence supply chain, too. The Committee heard from numerous SMEs, many of which told us that participating in defence procurement remains difficult and that complex bidding requirements, high compliance costs and financial risk are all burdensome barriers to growth.
Our report therefore welcomes the creation of the MOD’s Defence Office for Small Business Growth, which is designed to help SMEs and start-ups to access the defence supply chain and to scale up. It is too early to know whether the office will deliver meaningful change. To help to track its effectiveness, our report calls on the Ministry of Defence to publish clear metrics for success. We also call for the MOD to favour prime contractors that are committed to support supporting SMEs in their supply chain.
During our inquiry, we also heard about the particularly concerning issue of debanking. We heard first-hand accounts of SMEs struggling to access banking and financial services, despite providing products and services that directly support our national security. That is clearly unacceptable. These firms are helping to strengthen our nation’s security. They are creating skilled jobs and driving economic growth, yet some are still being denied access to basic banking services at a time when the Government are scaling up defence capability. Our report calls on the Government to engage directly with the financial services sector to put an end to this problem.
The report highlights wider challenges around public perceptions of defence. We heard concerns that misunderstandings about the sector negatively impact recruitment and discourage talented people from considering careers in defence. Too often, discussion focuses narrowly on weapons and overlooks the engineers, researchers, software specialists, manufacturers and innovators whose work contributes both to security and technological advancement.
The Committee therefore supports efforts to foster a broader national conversation about the defence sector, its role in protecting the country and the opportunities it creates for communities across Scotland. Ultimately, our report reaches a straightforward conclusion: Scotland is exceptionally well placed to benefit from increased defence spending, but unlocking that opportunity will require investment in our young people through apprenticeships, technical education and initiatives such as the DTECs. It will also require the Government to provide certainty for the industry and support SMEs, which are so critical to us.
I thank everyone who contributed to our inquiry and my fellow Committee members for their thoughtful and constructive work throughout. With that, I commend the report to the House.
Susan Murray (Mid Dunbartonshire) (LD)
I thank the hon. Lady for her statement and for leading our inquiry. There are around 40 applicants for every apprenticeship and engineering place in Scotland. The UK Government have offered funding for two defence technical excellence colleges, and the Scottish Government have agreed to match that funding. Does she agree that both Governments should continue to work together so that Scotland gets as many apprenticeships as possible?
Patricia Ferguson
I absolutely agree with the hon. Lady. We are very grateful that the DTECs are going to happen—all credit to both Governments for working together on that—but apprenticeships will also come through our further education colleges, and it is important that they are given the resources to benefit from jobs not only in the defence sector but, for example, in clean energy, which our Committee has heard so much about.
Kirsteen Sullivan (Bathgate and Linlithgow) (Lab/Co-op)
I thank my hon. Friend for her statement and her leadership in this wide-ranging inquiry. Our Committee heard from defence companies and, as my hon. Friend mentioned, they spoke of debanking. They also spoke about sites being vandalised resulting in significant costs. They talked about careers fairs being disrupted and sometimes forced to close due to direct action by protesters. Not only does this present barriers to recruitment but it undermines investment in a key sector. Does she agree that this further underlines the need for a national conversation about defence, security and the ever-evolving threats facing our country? Does she also agree that elected representatives and Governments should engage in such a conversation in a responsible way that is fully cognisant of the geopolitical realities that we face?
Patricia Ferguson
My hon. Friend is right to highlight that point, because it was raised with us by those in the defence sector. The right to peaceful protest is something that we all recognise the need to respect and uphold, but she is right to highlight the problems that there have been on some occasions in the sector.
However, I draw heart from my experience of speaking to apprentices at BAE Systems in my constituency, who to my mind are the best advocates for the work that they are doing and the purpose to which that work will be put. They were able to tell me in very straightforward terms—just like they do with their mates down the pub at the weekend, as a couple of them told me—about the importance of their work, why they were doing it and how proud they were of it.
Dame Harriett Baldwin (West Worcestershire) (Con)
I thank the hon. Lady for her excellent report. Was she as shocked as I was to learn about the difficulty that defence firms in Scotland face in accessing basic banking services? Does she agree that the interpretation of ESG often does not recognise that, without strong defence, we would have no environment, society and governance in this country?
Patricia Ferguson
I thank the hon. Lady for that question. She is right; there is a great deal of misunderstanding around the defence sector. It is very difficult for people to understand its importance not just globally and nationally but locally. If that importance were better recognised and understood, it would be much better for the firms involved, so I very much hope that the Government take our point that they need to engage with the financial services sector to address that.
Douglas McAllister (West Dunbartonshire) (Lab)
Figures announced last week confirmed that young apprenticeships have fallen by a third since 2016. We need greater regional control over skills and training. Decisions should be shaped by the people who best understand the industries in order to plug the defence skills gap and take advantage of defence shipbuilding investment. Does my hon. Friend agree that a successful example of this is the applied shipbuilding training academy—a £12 million facility at BAE Systems in Scotstoun, Glasgow, which has offered apprenticeship opportunities to many young people in my West Dunbartonshire constituency?
Patricia Ferguson
I thank my hon. Friend for mentioning that skills academy. It is in my constituency, so he will not be surprised to hear that I agree with him entirely about that. BAE Systems built the facility because it recognised that there was a skills gap coming and it no longer wanted to have to employ welders from the Philippines at extortionate rates and take on board all the financial responsibilities that came with that.
The academy is an inspiration, frankly. Its way of teaching changes ideas around skills that traditionally were regarded as being for men only, heavily industrial and, sometimes, dangerous. The myths about those trades have been busted by the academy. It is wonderful to see young people so enthusiastic about the jobs and the future that they know they will have because of the work that is going on.
Kirsty Blackman (Aberdeen North) (SNP)
I thank the Chair of the Committee and all the team who pooled this together, including the Clerks who assisted on it. It is shocking that, as stated in the report, less than a tenth of 1% of MOD spend is directly for SMEs in Scotland. I have spoken to the Supplier Development Programme in Scotland and not only has it struggled to get the MOD to engage with it but the MOD’s tier 1 contractors have been unwilling to engage with it.
The Supplier Development Programme is all about training suppliers in how to apply for tenders. Does the hon. Lady agree that more could be done to encourage those tier 1 contractors and the MOD to engage with programmes such as the SDP so that more smaller contractors can get parts of defence contracts? I am talking about not just welding apprenticeships but cleaners, water fountain repairers and the people who do all the things we do not normally think about but without whom the buildings would fall down.
Patricia Ferguson
I am grateful to the hon. Lady for mentioning our excellent Clerks, who ensure not only that we are kept on our toes but that we get the best possible evidence for our inquiries. She is right about the problem that many SMEs have. It is easy to think of those jobs as being very technical in nature, as she describes, but we sometimes forget about the people who provide logistics and other services to these suppliers. It is important that the opportunities to benefit from the work in the sector spread across the range of roles, particularly in those areas where employment is perhaps more vulnerable or fragile. We want to see the Government do as much as they can to allow those jobs to filter down.
Torcuil Crichton (Na h-Eileanan an Iar) (Lab)
I thank the Chair for the report, which is one of many valuable reports that have come from the Scottish Affairs Committee under her leadership. I welcome it in particular as it relates to unlocking the potential of SMEs in Scotland, which, according to the report, currently receive less than 0.078% of MOD spending.
I was pleased recently to see the Minister for Defence Readiness and Industry launch Project Safari at the MOD Hebrides range, which will make it easier and simpler for SMEs to access test and evaluation facilities here in the UK. Does the Chair agree that the 50 highly skilled jobs at the Hebrides range and the vast area of the Atlantic that it offers for test and evaluation are an invaluable contribution to the defence capability of this country and will help unlock the potential of Scottish SMEs to grow?
Patricia Ferguson
I thank my hon. Friend for that question. As he knows, the Committee has visited many of the facilities in his constituency and adjacent constituencies —I was going to say “neighbouring” constituencies, but really there are no neighbouring constituencies in his part of the world.
Fifty sounds like a small number to some of us, but for a community like his it is a large number. Those are skilled jobs, and they will be there for a long time to come, so he is absolutely right to mention that. I agree entirely that Project Safari is a great opportunity, and it is also great to see—I will try not to use the word “great” too often—that his constituency, slightly remote though it is, can benefit from the defence contracts available now across Scotland.
Several hon. Members rose—
Jim Shannon (Strangford) (DUP)
Thank you, Madam Deputy Speaker. I very much welcome what the Chair of the Select Committee has put forward. If we removed the word “Scotland” from the report and replaced it with “Northern Ireland”, every recommendation would be the same for us. I think of some of the things we have done in Northern Ireland. For instance, Thales has organised apprenticeships where the students get their fees paid, and they also get a wage. Has the Committee had an opportunity to look at how that could be done in Scotland? Has it also looked to ensure that men and women—especially young girls and young ladies—can have opportunities in engineering projects for the future?
Patricia Ferguson
If all of Northern Ireland has the ingenuity that the hon. Member has in weaving his constituency into every debate, we will be doing really well. We have not looked at Northern Ireland in particular. I know Thales, because it used to be based in my constituency; it has since moved to another part of the country. However, he is right. It is very important, and it is wonderful to see so many young women working in skills that were traditionally thought to be for men only.
Dame Meg Hillier (Hackney South and Shoreditch) (Lab/Co-op)
As my hon. Friend highlights, there has been long been a skills deficit in this area. Does the Committee plan to revisit this work to hold the Government to account on the promises made? Over the years, we have heard promises from Governments about apprenticeships, but if we have a stop-start approach we do not get that long-term investment in skills that the defence industry so desperately needs.
Patricia Ferguson
I thank the Chair of the Liaison Committee for that question. She is right to say that it should be revisited. I suspect that we will revisit a number of aspects of our report. Of course, we look forward to the Government’s response to the report, but as we go forward during the rest of this Parliament I think we will come back to a number of points.
Richard Baker (Glenrothes and Mid Fife) (Lab)
Today, the Minister for Defence Readiness and Industry visited the Methil yard in my constituency, which has already doubled its number of apprentices, and with the prospect of Programme Euston and new dry docks for Faslane being built at the yard, there could be hundreds more. Does my hon. Friend agree that the recommendations about apprenticeships show the need for apprentice availabilities to be increased at pace for the opportunities that lie ahead for Scottish yards?
Patricia Ferguson
I thank my hon. Friend for that question. I was pleased to see that the visit went so well. It is encouraging to see such new opportunities. He makes the point, which we tried to make in our report, that there are great opportunities here, but it is up to everyone in Scotland—Governments, local authorities and manufacturers alike—to grasp them and make a success of them for our communities.