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Last Updated: Monday, 4 July, 2005, 11:27 GMT 12:27 UK
Yard closure 'will cost millions'
Ferguson shipyard
The Port Glasgow shipbuilder is already laying off workers
A Scottish National Party MSP has said the closure of a shipyard would cost the country more than 5m each year in state benefits.

The claim by Bruce McFee comes amid a row about the awarding of a vital shipbuilding contract.

The Scottish Executive could give the deal for two vessels to a Polish yard instead of Ferguson in Port Glasgow.

The Clyde business has already begun a programme of lay-offs and may close if it fails to win the executive contract.

Ferguson management have said the yard in Gdansk has been given an unfair advantage in the bidding process.

Long-term savings

Along with a number of politicians, Ferguson chiefs have urged the European Competition Commissioner Neelie Kroes to investigate how the Polish bidder was able to undercut Ferguson.

However, Scotland's Fisheries Minister Ross Finnie has maintained that he has no grounds on which to exclude the overseas yard.

He said that the situation surrounding the EU investigation into the competition claims was far from clear.

This yard is slowly bleeding to death
Bruce McFee

On Monday, Mr McFee, MSP for the West of Scotland, said in the long-term savings would be realised if the contract was kept on the Clyde.

Mr McFee said: "The closure of this yard would have a devastating impact on Port Glasgow and the wider community.

"Last Friday, another 20 members of staff, including the design team, received their P45s while Jack McConnell and his Liberal stooge, Ross Finnie, stand idly by.

"This yard is slowly bleeding to death."

It is projected that there will be a 3m saving on each vessel if the contract is awarded to the Polish yard.

But Mr McFee said that if the Ferguson yard closed it would result in a 5m benefits bill and a fall in income tax receipts, national insurance contributions and VAT receipts.

Legal challenge

The executive's argument about following clear bidding rules need not apply in this case, he went on.

He has cited a European Union ruling which allows for governments to provide "positive actions or positive discrimination in particular with a view to combating unemployment and social exclusion" .

Mr McFee said: "The door is wide open for Jack McConnell and Ross Finnie to award the Scottish fisheries protection vessels to the Ferguson yard."

However, a Scottish Executive spokesman said that it was aware of the implications of the contract to the economy, but the rules were clear.

He added: "We are continuing to explore every possible way of assisting Ferguson Shipbuilders within the constraints of the law.

"It is not in the executive's gift to award high value public contracts on an arbitrary basis.

"To do so would risk legal challenge by aggrieved bidders and the European Commission and could have implications for other Scottish companies engaged in exports."

Executive rejects shipyard call
15 Jun 05 |  Scotland
Ministers hold off on ships deal
07 Jun 05 |  Scotland
The rise and fall of the Clyde
25 Nov 04 |  Scotland
Shipbuilder clinches 17m contract
05 Oct 00 |  Scotland

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