EU rule can be used to award indy Scotland warship orders confirms UK Minister


  By a Newsnet reporter
A UK Minister has confirmed that EU procurement regulations would not prevent naval orders from the rest of the UK being undertaken by yards on the Clyde without tender, even if Scotland voted Yes to independence.
Appearing in front of the Scottish Affairs Committee at Westminster, Andrew Murrison said EU competition law – known as Article 346 – would allow for orders to be completed in Scotland provided the Westminster Government said it was for national security reasons.

The Conservative MP and former Royal Naval Medical Officer was appearing before the Committee which was set up in order to scrutinise Scottish independence.

Asked about EU Article 346 and whether the rest of the UK could place orders with a yard outwith its borders without a need to go through a tendering process, Dr Murrison said: “I think the answer is technically yes, if it was in our national interests to do so”.

Pressed if this meant that the Clydeside yards could indeed be awarded rUK naval contracts, the minister replied: “Yes … You’d have to make a case that the residual UK’s defence is best secured by placing that contract with that particular yard.”

Asked if a case could be made that the Clyde was best placed compared to other foreign yards, Dr Murrison said: “Well I suppose you could make a case around transferrable skills, you could possibly make a case around a notion that SMEs and other consequential businesses in the supply chain might be within Great Britain for example,”

The admission by the Conservative MP is a significant blow to Unionist politicians who have claimed that a Yes vote would mean the Clyde would be automatically barred from being handed the work without having to go through a tendering process.

The testimony from the Conservative MP was particular uncomfortable for Scottish Secretary Alistair Carmichael who was sat beside the minister.  Writing this weekend in the Sunday Herald, Lib Dem MP Carmichael claimed that the EU regulation 346 would not apply to an independent Scotland.

“Where work is not conducted under the Article 346 exemption it must go out to tender.  In an international market many countries are able to produce at a lower cost.” he wrote.

His view was challenged by Deputy First Minister Nicola Sturgeon who insisted the rule did not prevent BAE from completing its orders using its Clydeside facility.

“If the UK Government awards a contract to BAE and BAE wishes to build the ships in its Clyde yards, nothing in Article 346 stops that from happening.” She said.

However a defiant Carmichael launched an attack on the SNP MSP, demanding she admit to being wrong: “Nicola Sturgeon is looking pretty isolated on this.  The best thing she could do is admit that she is wrong.

“Is she telling us that the people who build the warships and the people who place the contracts know less about this than she does?”

Confirmation that Ms Sturgeon was indeed correct is also acutely embarrassing to Labour MP Ian Davidson who chairs the Scottish Affairs Committee.

Earlier this year his report into defence in an independent Scotland concluded: “If Scotland was a separate country, then the Ministry of Defence could not use Article 346 to favour shipyards in Scotland because they would no longer be within the UK.”

However Mr Davidson appeared to concede his initial belief that the Clyde yards could not benefit from article 346 when he himself questioned the Minister.

Dr Murrison also admitted that in order to ensure complex warships could be transferred from Scotland in the event of a Yes vote, “significant investment” would be required at Portsmouth and that the UK Government or BAE Systems would need to “invest fairly heavily” if Barrow was to be used.

Whilst maintaining his desire to see Scotland remain in the Union, the Conservative MP’s candid performance will have disappointed many Unionist politicians in Scotland who have tried to use shipbuilding on the Clyde to attack independence.  Mr Davidson himself is on record saying that the industry in Scotland would collapse in the event of a Yes vote.

Last week it emerged that 835 jobs would be cut at the two yards on the Clyde with a further 900 going in Portsmouth.  The English based yard received a further blow when BAE announced its intention to retain shipbuilding capabilities on the Clyde, citing the skills of the workforce and capacity.

However there was anger when it emerged Govan’s local Labour MP had called for a break-clause that would have allowed any naval work to be moved to England in the event of a Yes vote.  Ian Davidson claimed his move had received backing from union officials at the Clyde yards.

[Newsnet comment – On Sunday BBC Scotland reporter Gary Robertson confronted SNP MSP Stewart Maxwell on the issue of the article 346, claiming that an independent Scotland would be barred from benefitting from the procurement rule.  Newsnet Scotland has this evening – Tuesday – alerted Good Morning Scotland to this article which contains video of Dr Murrison’s comments. 

Alistair Carmichael will make a keynote speech today on independence and his views will again feature prominently across the Scottish media.  We believe the BBC is now obliged to contront the Scottish Secretary on the issue of article 346.

Not to do so will further increase suspicion that the BBC is unwilling to pursue issues that may cause the pro-Union campaign difficulty.]