Chance for our shipyards to rise from the ashes

Published on Tuesday 27 January 2009 20:59

IN THE early 1950s, Clydeside shipbuilders dominated the world market and produced a diverse range of products from warships to banana boats, from tankers to passenger liners. But a combination of under-investment, poor labour relations, technological backwardness and conservative management brought this powerful economic sector to ruin. When the bulk of the yards went out of business in the 1960s, Scots took refuge in the myth that shipbuilding was a dying industry.

Far from it: the next decades saw a massive expansion in the global demand for ships, particularly giant tankers and container vessels. Scotland started to turn its back on manufacturing and manufacturing jobs just as the world economy needed them more than ever. Meanwhile, a small nation in Asia – South Korea – bought up the ship designs and machine tools from the defunct Clyde yards and reinvented itself as the world's biggest shipbuilder.

Even in the 1970s, Scotland could still build a diverse range of naval and commercial ships. But even that capacity quickly disappeared. Today we are a niche player, building highly specialised – and mostly military – vessels. Shipbuilding and ship repair in Scotland employs only 5,500 people, with sales worth 530 million last year. By contrast South Korean yards did 100 times that business in what was a bad year for them.

Our dismal record in shipbuilding was repeated in a whole range of manufacturing industries as Scotland (and Britain) deluded itself that relying on banking jobs was the way to build a sustainable economy. Now that fantasy has been dispelled, we are faced with recovering our lost engineering skills in order to grow the real economy. As part of that process, Scottish Enterprise, the national economic development agency, has announced a programme to train 1,000 new engineers and production workers to help build the two new Royal Navy aircraft carriers which will be assembled at Rosyth. This is a long overdue – and very welcome – development, though it underscores the tragic loss of engineering skills in Scotland over recent decades.

All governments are notoriously bad at picking industrial winners, and state subsidies are more frequently used to prop up inefficient industries than to grow new ones. However, the current economic crisis offers a once-in-a-generation chance to rebuild Scotland's manufacturing base, provided we invest in new skills, technology and products. Some public pump-priming is necessary, which is why the recent MoD decision to delay the construction of the two aircraft carriers seems a false economy – especially in the current recession, that decision should be reversed.

The important thing to grasp, this time round, is that making real products rather than paper transactions creates genuine value, satisfying jobs and an outlet for the research work conducted in Scotland's universities. It's a case of back to the future.