Separate Scotland ‘will lose defence contracts’

By David Maddox
Published on 15/11/2011 13:27

SCOTLAND could lose defence contracts worth billions of pounds and thousands of jobs if it becomes independent, the UK government has warned.

In his first defence questions at Westminster, new Defence Secretary Philip Hammond gave the first clear statement from a UK government minister that an independent Scotland would lose out on contracts that underpin the shipbuilding industry in Fife and on the Clyde.

His response to a question from Scottish Labour MP Thomas Docherty fuelled fears Scotland would be treated like other foreign countries if it were to break away.

However, the SNP accused Mr Hammond of “scaremongering”.

Mr Docherty, whose Fife constituency includes Rosyth, where two new aircraft carriers are being built, asked Mr Hammond: “Will you confirm that if there was a separate Scotland, the Ministry of Defence would have to look again at the long-term refitting options for our aircraft carriers?”

The Defence Secretary replied: “It is unlikely HM Forces would wish to use facilities in a fully independent Scotland in the way they would wish to use facilities within the United Kingdom.”

That response heaps further pressure on the Scottish Government over its plans for an independence referendum.

Last week, an independent report suggested that, if Scotland were to separate from the UK, it would struggle to join the European Union and, if it were allowed in, would be forced to join the euro and pay £8 billion towards the eurozone’s stability fund.

The report also said contributions to the EU would almost double per head in Scotland because it would probably lose the UK rebate won by former PM Margaret Thatcher.

Constitutional law expert Professor Adam Tomkins, of Glasgow University, then warned it would be illegal for the Scottish Government to call a referendum or even for SNP ministers to ask civil servants to help them prepare for one.

The Defence Secretary’s comments yesterday increased fears over the impact of independence on Scotland’s economy.

EU rules allow member states to give preference with defence contracts to domestic firms, instead of being forced to go to open tender across Europe.

This has underpinned about 9,000 shipbuilding jobs at the Rosyth base run by Babcock and in the Govan and Scotstoun yards on the Clyde run by BAe Systems, with contracts for the carriers and Type 23 frigates.

With five English shipyards also seeking extra business, there had been concerns they would be preferred by the MoD should Scotland break away.

Rosyth is expected to have the contract to refit and maintain the new Queen Elizabeth-type carriers, even though some analysts believe Brest in France is cheaper, and there has been a campaign to award the contract to the yard in Portsmouth where the ships will be based.

Mr Hammond took advice from defence equipment minister Peter Luff before answering Mr Docherty’s question. The response was the first time the UK government has laid down a clear marker over its likely relationship with an independent Scotland.

Afterwards, Mr Docherty said: “The Secretary of State has confirmed what the trade unions and my colleagues have long feared, which is that a separate Scotland would lose thousands of highly skilled engineering jobs and billions of pounds of work.

“The SNP now need to give us information on what they would create in terms of a Scottish navy to replace the contracts lost by separating from the United Kingdom. Otherwise, they will be killing off the shipbuilding industry.”

Mr Hammond’s comments appear to counter SNP assertions that the UK might continue to use military facilities in an independent Scotland, including bases.

The coalition is coming under pressure from parts of England to increase the military presence there, and the decision by Mr Hammond’s predecessor, Liam Fox, to almost double the size of the army in Scotland at the expense of English bases has upset some Tory back-benchers.

The Nationalists dismissed Mr Hammond’s comment as “just more anti-Scottish scaremongering from the Tories without a stitch of evidence”, arguing that the greatest loss of defence jobs had been caused by Westminster.

The party’s Westminster leader and defence spokesman Angus Robertson said: “The irony is that Westminster has presided over a £5.6 billion defence underspend and 10,500 defence job losses in Scotland over the last decade.

“It is not the London government that makes the yards successful – it is the second-to-none Scottish skills base and technical expertise that brings orders to the yards, and that will continue under independence. In reality, and in all circumstances, Scottish yards will secure orders on the basis of their skills and formidable record of delivery.”

He added: “With independence, Scotland will dump the expensive and obscene Trident nuclear weapons and invest in professional, conventional forces. It is clear that, far from Scotland benefiting from a defence dividend with the Union, we have in fact been victim of a defence downturn.”

Neither Babcock nor BAe Systems wished to respond to Mr Hammond’s comments, while union leaders, who have in the past expressed grave concerns about the effect of independence, were unavailable.

In his own question in the Commons yesterday, Mr Robertson said plans to replace the RAF with the army at the Kinloss base in his constituency would lead to fewer personnel there and asked whether an economic impact assessment had been carried out.

Last week, the MoD announced the arrival of 930 army air support engineers at the base two years earlier than expected, with the numbers likely to rise to 1,200 by 2015.

Armed forces minister Nick Harvey said: “I acknowledge that the number of personnel will be slightly smaller than that which has been there in the past, but the fact of the matter is that it is military considerations that have dictated what we have decided, and I hope that the honourable gentleman and his constituents will welcome the army into their community and will be grateful for the contribution they do make to the economy.”

Later, Mr Robertson said: “It is extraordinary that no economic assessment appears to have been made by ministers. The Moray economy is the most defence dependent in the country and has suffered terribly through the closure announcement of Kinloss as an RAF base.”

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