Scottish independence: Spending on defence ‘sells Scots short’ by £1.9bn

A ship builder works on one of the Queen Elizabeth class aircraft carriers. Picture: PA
A ship builder works on one of the Queen Elizabeth class aircraft carriers. Picture: PA
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SCOTLAND receives £1.9 billion less than its population share of government defence spending on major projects, a Freedom of Information (FoI) request has revealed.

The response by the Ministry of Defence appears to undermine claims made by opponents of independence that one of the areas of biggest loss to Scotland would be defence spending.

The document also appears to contradict claims made by defence ministers that it is impossible to show a breakdown of spending in the nations and English regions of the UK, after it revealed that each item of spending has a special regional code.

The revelation has led to claims by the Scottish National Party that ministers have held back on regional spending to hide the defence underspend in Scotland.

The FoI focussed on UK defence contracts which are protected from European Union competition rules and can be awarded to domestic countries only for national security reasons.

Between 2007-8 and 2011-12, Scotland received £3.17 billion of work out of £60bn – a shortfall of about £1.9bn.

The issue is a crucial one in the debate ahead of next year’s referendum, with pro-UK parties warning that Scotland will lose out on billions of pounds of work in defence contracts, particularly with shipbuilding on the Clyde and at Rosyth.

However, the SNP has claimed that independence would allow the defence and shipbuilding industries to flourish.

This was backed up by a leading figure from the industry, Ian Godden, who is a former chairman of aerospace and defence industry promoter ADS, who said that the international nature of contracts meant that Scotland could have a successful industry post-independence.

Mr Godden told the Scottish Affairs Select Committee: “Scotland can maintain its position in defence interests because there is an industrial capability and engineering capability that Scotland has got which makes it attractive.”

The FoI has also raised questions over MoD claims that it cannot say how much it spends in different parts of the UK, having claimed that it stopped collating the figures in 2007 for cost reasons.

In 2010, the then Lib Dem defence minister Nick Harvey said: “The MoD no longer compiles estimates of expenditure at the sub-UK areas described in the table as they do not directly support policy making or operations. The last estimates relate to 2007-8.

“As a result, the complex data analysis required to produce the underlying sub-UK expenditure data is no longer performed.

“To produce a comparable time series beyond 2007-08 would incur disproportionate cost.”

However, the MoD response said that each contract has a “location of work” code.

It said: “The data in the table was compiled by Defence Analytical Services and Advice from the MoD Defence Business Services finance contracts database as at 5 November, 2012. The exempt expenditure for Scotland has been calculated from the location of work codes submitted on the DEFFORM 57, which is the detailed statistics input form that is produced when most contracts are established.”

SNP Westminster leader and defence spokesman Angus Robertson said the government has been “caught red handed”.

He said: “The MoD has told us that they stopped publishing statistics of this type only for it to be revealed that they do, but only for internal consumption. This is really nothing more or less than a cover-up, as the minister assured me in parliamentary questions and debates that they were no longer published.

“Worst of all, these figures show that the underspend in Scotland continues to fundamentally undermine any remaining defence case for the Union.”

He added: “Scottish taxpayers will feel rightly outraged at this deception and begs the question if any MoD pronouncements can be taken seriously.”

However, the MoD said Scottish industry benefits from billions of pounds of contracts placed directly and indirectly with hundreds of companies – from major shipyards on the Clyde and Rosyth, to hi-tech manufacturing in Fife, Edinburgh and Glasgow, through to small firms the length and breadth of the country. The UK government has spent about £1.5bn in Scottish shipyards on the Queen Elizabeth Class carriers alone and 4,000 jobs are directly linked to the programme.

An MoD spokesman said: “The UK’s armed forces are configured to provide security for the whole of the UK and it is misleading to say that Scotland currently loses out.

“Scottish industry benefits from billions of pounds of MoD contracts which sustain thousands of jobs.

“The challenge for advocates of independence is to set out how this level of investment would be sustained in the event that Scotland became independent.”