Defence industry is new poll battleground

Published on Thursday 18 March 2010 21:38

THE shadow defence secretary will today outline plans to revolutionise the defence sector and provide government help to support it as one of Britain's leading industries.

In a major speech to the City, Liam Fox will question why defence did not get a stimulus package like the car industry, despite Britain being the world leader in defence exports in 2007.

Speaking to The Scotsman, Dr Fox underlined the importance of the defence industry to the Scottish economy: it is worth 2.3 billion in sales and supports almost 50,000 jobs. His speech is part of a major push by the Conservatives to woo voters in Scotland as the party targets 11 seats north of the Border.

Meanwhile, during a speech in Aberdeen today, shadow chancellor George Osborne will lay out a blueprint to transform the Scottish economy.

He will claim that a Conservative government would make Scotland "the best place in the world to start a business" and boost tourism north of the Border by 900m a year.

Dr Fox said that, if there was "a threat of independence", Scotland's defence companies in shipbuilding and electronics would "migrate quickly south of the Border". He told The Scotsman: "What we have in Scotland is a Labour government that does not understand and is ashamed of the defence industry, Lib Dems who want Trident scrapped, which would cost Scotland thousands of jobs, and the SNP who would drive the businesses away.

"This is an important industry for the UK, but proportionally is even more important to Scotland, and only the Conservatives can protect and increase these jobs."

His plans involve changing the much-criticised procurement procedures at the Ministry of Defence and targeting equipment that can be marketed abroad.

However, he will insist that all projects, including the 5 billion aircraft carrier project, will be subject to the strategic defence review, with only the Trident replacement guaranteed.

Amid renewed calls from Scottish Labour MPs to back the carrier project, he added that his position was the "same as Labour's", which is a presumption that the carriers being built in Rosyth and on the Clyde will go ahead.

But yesterday, Glasgow North West Labour MP John Robertson was less than convinced. He said:

"Margaret Thatcher tried and failed to end shipbuilding on the Clyde. Cameron's Tories seem committed to finishing off her work."

Dr Fox also met Azeem Ibrahim, vice-president of the United Kingdom National Defence Association, in Edinburgh, where he heard the case for ring-fencing defence spending and then increasing it annually.

Mr Ibrahim described the meeting as "very productive" and said he believed the NDA's proposals would be taken seriously.

In Aberdeen, Mr Osborne will claim that Scotland should be growing more new businesses.

Latest figures show 35 businesses are started per 10,000 adults in Scotland, compared with 42 per 10,000 adults across the UK. Mr Osborne claims measures, such as axing tenancy agreements that discourage start-ups in social housing and slashing paperwork will reverse this.

The Scotsman also understands he will highlight plans to cut UK corporation tax from 22p to 20p and to reverse a decision by Labour to end tax relief for furnished lets, which has hit 120,000 tourism businesses in Scotland.

He will also claim he can reverse Scotland's unemployment rise by abolishing employer National Insurance payments for new jobs. "This tax break will encourage new Scottish entrepreneurs and generate up to 5,000 additional jobs," he will say.