SNP stakes claim to share in arms giant BAE

By DAVID MADDOX
Published on 14/09/2012 21:14

AN INDEPENDENT Scotland should be entitled to part of the UK government’s golden share in BAE, the SNP said yesterday, as concerns were raised at Westminster over the future of British jobs at the arms giant.

The proposed merger between BAE and the European aerospace company EADS has led to both the French and German governments indicating they would want to keep their veto powers in the new company. The UK government has briefed that it would do the same. The golden share was retained in 1985 when the UK government sold its stake in BAE, allowing it to veto foreign control of the company.

Nationalists have also raised questions over whether an independent Scotland would automatically be excluded from British defence contracts as had been previously claimed by UK ministers.

With thousands of Scottish jobs at risk the SNP last night insisted that part of an independence settlement would have to look at Scotland’s share.

SNP Westminster leader and defence spokesperson Angus Robertson MP said: “Any potential merger must take account of the stake held by Scottish taxpayers in BAE.”

He also made it clear that the merger and a potential Scottish share in the company along with three other national governments, raised questions over whether Scotland would be excluded from future defence contracts for the remainder of the UK.

Under EU law, countries are able to limit bids for defence contracts to companies in their own country.

But Mr Robertson said: “In an increasingly inter-connected world we will see much closer defence collaboration between nations on joint projects in ­future.”

Former defence secretary Lord Reid said yesterday that the mooted deal appeared commercially appealing, and urged the Government to make efforts over the coming weeks to see whether political and diplomatic obstacles can be overcome.

The talks between BAE and EADS, disclosed on Wednesday, could create the world’s biggest aerospace company, with a market value of around £31 billion.

But yesterday Defence Secretary Philip Hammond indicated that the Government will demand assurances that any deal will benefit the national economy and not compromise security.

Speaking during a visit to ­Afghanistan, Mr Hammond said: “The British government will have to be satisfied that this is in the UK’s national interest, because we have a special share in BAE Systems.

“We will want to be reassured not just about the security implications but about the implications for the future allocation of work to the UK. It’s not just military work, but Airbus work.”

Mr Hammond added: “We are not Luddites, we recognise that BAE Systems has big challenges in a marketplace where most of the customers are reducing ­defence budgets.

“So sticking our heads in the sand and saying we would ­rather things just carry on as they were is not necessarily a very realistic response.

“We have to engage with the realities that the company faces and one of those realities is that our budget is smaller, the US, French, German, everyone’s budget will be smaller and the company has to respond to that.”