Defence spending boost ‘may well’ provide work for Ferguson Marine, says Swinney

An increase in defence spending “may well” provide more work for Scottish Government-owned Ferguson Marine, John Swinney has said.

The UK Government announced plans earlier this year to cut the overseas aid budget in order to increase defence spending to 2.5% of GDP by 2027.

It comes as the Ferguson Marine shipyard in Port Glasgow missed out on a contract to build seven new small vessels for the west coast CalMac network, raising concerns about its future viability after the delivery of the vastly late and over-budget Glen Rosa.

The yard has already done some work for nearby BAE Systems in Glasgow, which is building ships for the Royal Navy.

Appearing before the Conveners Group at the Scottish Parliament – a twice-annual session with the heads of Holyrood committees – the First Minister said the defence spending increase could benefit the yard, which the Government hopes to return to the private sector at some point.

“That may well be part of the opportunities that emerge for Fergusons and the Government is obviously supporting the development of Fergusons’ business plan to ensure the yard has got a sustainable future,” the First Minister said when asked about the increase by Economy and Fair Work Committee convener Colin Smyth.

But asked if he knows of plans by the yard to seek defence work, Mr Swinney added: “There is obviously a number of business prospects that Ferguson are pursuing.

“We remain very optimistic that the yard has a secure future, which is why the Government has invested £14 million in enhancing the capacity and the capability of the yard.”

The Scottish Government has previously been criticised for its commercial arm Scottish Enterprise providing funding to defence companies, which both have said was not used to fund the creation of weapons or munitions.

Ferguson Marine was rescued from administration by the Government in 2019, laying bare the issues in the building of the Glen Rosa and its sister ship the Glen Sannox – which entered service earlier this year.

The original contract was due to cost £97 million but could reach four times that figure when both have been handed to publicly-owned ferry operator CalMac.