HC 483 Defence implications of possible Scottish independence

SCOT 001

Written evidence from the Ministry of Defence

1. Thank you for the opportunity to submit a memorandum of evidence for your inquiry into the defence implications if Scotland were to become independent. The evidence below addresses the main areas of interest identified by the Committee in announcing the terms of reference on 29 June 2012, as well as the specific questions addressed to the Ministry of Defence in the letter of 17 July 2012 from the Clerk to the Committee.

2. The UK Government’s position is clear: Scotland benefits from being part of the UK and the UK benefits from having Scotland within the UK. The UK Government is confident that the people of Scotland will choose to remain part of the UK, and is not planning for any other outcome. It is for those advocating independence to explain the nature and implications of an independent Scotland; it is the policy of the UK Government to maintain the integrity of the existing UK and we are supporting that position with evidence and analysis.

3. All parts of the UK, including Scotland, gain significant benefits from the provision of defence on a UK-wide basis in terms of: high levels of protection and security through sophisticated defence capabilities and substantial economies of scale through single, united armed forces and supporting organisations and infrastructure; significant international influence through a global network of relationships and alliances; and significant opportunities for defence industry, sustained by both UK domestic orders and exports in the global market.

The current contribution of Scotland to the overall defence of the United Kingdom in terms not only of specific items but of shared facilities and goals.

4. Scotland, as an integral part of the UK, plays a key role in the defence of the UK. It is currently the location of major bases for: the strategic nuclear deterrent; four regular infantry battalions and an air support regiment; two Royal Marines Commando units; and five squadrons of fast jets, including those providing the UK’s northern quick reaction alert force. There are also a significant number of reserve units, extensive training and testing areas and other facilities there. As at 1 July 2012, there were some 15,500 Ministry of Defence personnel located in Scotland, including some 11,000 regular armed forces and 4,500 civilian personnel, at some 50 locations across the country. Future plans envisage bases in Scotland for: all Royal Navy submarines; an Army brigade; and one of the Royal Air Force’s three fast jet main operating bases. Scotland benefits greatly from the presence of these bases, facilities and personnel, which provide significant employment opportunities and contributions to local economies.

5. Scots and Scottish-recruited units are an integral part of the UK armed forces and are highly integrated into the overall force structure of the UK’s very sophisticated fighting forces. In 2011/12, about 9% of recruits to the regular armed forces were recruited through Scottish recruiting offices. There are around 3,000 volunteer reserves and 17,000 cadets in Scotland. Scots have a proud and distinguished record of service in the armed forces. The majority of those who have served since the Act of Union have done so as individuals within the Royal Navy, the Army and the Royal Air Force; their contribution to military operations has been substantial. That said, perhaps the most easily recognisable contribution of Scots to the armed forces has been the Scottish-recruited line regiments, which have an outstanding fighting history within the British Army.

6. The equipment and support of the UK armed forces provides significant opportunities for defence industry across all parts of the UK, with UK defence contracts sustaining key, advanced industrial capabilities. Many UK defence contractors are global players with significant exports. Many UK defence contractors benefit from contracts which are exempted from EU procurement rules for national security reasons that have to be placed or competed within the UK. In each of the last two financial years, between £12 billion and £13 billion pounds of Ministry of Defence contract expenditure was exempt from EU regulations. Although these exemptions were for a variety of reasons, the majority of exempt procurements, particularly high value procurements, are for national security reasons.

7. There is a substantial defence industrial footprint in Scotland, ranging from design, manufacture, assembly and maintenance of complex warships on the Clyde and at Rosyth to the latest high-tech innovations in aerospace engineering, defence electronics and electro-optical systems in companies based right throughout Scotland. As part of the UK defence industry, the defence industry in Scotland has a highly skilled workforce and plays a key role in equipping and supporting the UK armed forces. Many of the Ministry of Defence’s prime contractors have sites in Scotland, including: BAE Systems, Raytheon, Rolls-Royce, Selex Galileo, Thales and Babcock Marine. UK defence contracts sustain thousands of skilled jobs in Scotland and generate billions of pounds for the economy.

8. The shipbuilding industry in Scotland forms a substantial part of the UK’s shipbuilding industry and is a major beneficiary of UK defence contracts. These currently include building and assembling Type 45 destroyers and the Queen Elizabeth Class aircraft carriers. Work in Scottish yards on the carriers is estimated to be worth about £1.3 billion and is anticipated to create or sustain nearly 5,000 jobs, including hundreds of apprentices.

9. It is important to understand that defence of the UK is planned, organised, resourced and managed on a UK basis to meet the needs of the UK as a whole. Defence capabilities and facilities are not operated by reference to the constituent parts of the UK they happen to be in, but are provided for the whole of the UK. Equally, defence goals are those for the UK as a whole rather than goals agreed by each of its constituent parts.

10. The UK has the fourth largest defence budget in the world. Agreed funding for defence over the period 2011/12 to 2014/15 is some £34 billion per year, which meets the NATO target to devote at least 2% of Gross Domestic Product to defence.

11. The UK armed forces are part of a single defence organisation and are directed and controlled through a single command chain. They are enabled and supported by single procurement, logistics, infrastructure, information, training and administrative structures and services.

12. It is important to emphasise that all parts of the UK gain significant benefits from the provision of defence on a UK basis. The formulation of defence policy and strategy and the planning and delivery of defence on a UK basis provides high levels of protection and security for England, Scotland, Wales and Northern Ireland, as well as the Overseas Territories, the Channel Islands and the Isle of Man and British citizens abroad. As an integral part of the UK, Scotland receives the full benefits of this protection and security.

13. Defence of the UK is set within the overarching policy framework provided by the UK National Security Strategy and Strategic Defence and Security Review under the National Security Council, integrating the work of the foreign, defence, home, energy and international development departments and all other arms of government contributing to national security.

14. UK defence capabilities include: the strategic nuclear deterrent; integrated, highly capable and well equipped naval, land and air forces, including reserves; and specialist capabilities such as command, control and communications, logistics, intelligence, special forces and cyber.

15. The UK also has a strong network of alliances and relationships: principally with the United States of America, but also as a leading member of the European Union and NATO, and a permanent member of the United Nations Security Council. These allow the UK to exercise significant global influence.

16. The UK is one of the largest contributors to NATO, in operational, military, financial and political terms. The UK makes a major contribution to international security through the Alliance in terms of the full spectrum of capabilities it makes available to NATO and its willingness to deploy them. As such we exert significant influence on decision-making within the Alliance. This strong active presence helps the UK enormously to fulfil our security and foreign policy objectives.

17. Together these capabilities, alliances and relationships: ensure national security and resilience, protecting our people, economy, infrastructure, territory and way of life from all major risks that can affect us directly; and help to shape a stable world through actions beyond our borders to reduce the likelihood of specific risks affecting the UK or our direct interests overseas. The current highest priority risks are those from terrorism, cyber attack, international military crises and major accidents or natural hazards.

The implications for that defence should Scotland become independent, including those for personnel currently serving in the Armed Forces.

18. In the event of Scottish independence there would be many issues for the UK and Scottish Governments to address regarding future separate national defence and security arrangements, such as: separation of armed forces; basing; division of assets and liabilities; and potential cooperation. Without knowing what a future independent Scottish Government’s approach to defence would be, we cannot predict what the implications would be for defence of the UK or for defence of an independent Scotland. It must however be reasonable to assume that anything resembling fully integrated defence could not continue, because that would require binding commitments on both Scotland and the UK to maintain full compatibility across a range of essential matters such as defence expenditure, strategic foreign, defence and security policy aims (including the nuclear deterrent), the use of the armed forces on operations abroad and procurement priorities. This does not appear to be consistent with any conventional understanding of independence or national sovereignty.

19. The integration of the UK’s armed forces works to the benefit of the whole of the UK and an independent Scotland would be greatly weakened by separation. Although it would also be affected, given the relative size of the tax base and share of population, the rest of the UK would be better able to absorb and cope with the consequences. It is highly unlikely that the overarching policy and strategy, including continued membership of the UN, NATO and Common Security and Defence Policy, and the Military Tasks as set out in the 2010 National Security Strategy and Strategic Defence and Security Review, would be significantly changed, although detailed implications for force structures and capabilities as set out in the Defence Planning Assumptions would need to be examined..

20. The equipment and support of the UK armed forces would continue to provide significant opportunities for defence industry in the UK, with UK defence contracts continuing to sustain key, advanced industrial capabilities. We would expect UK defence contractors to continue to be global players with significant exports. UK defence contractors would also continue to benefit from contracts exempted from European Union procurement rules for national security reasons that have to be placed or competed within the UK.

The possible shape and size and role of Scottish defence forces following independence.

21. It would be for an independent Scottish Government to decide what its foreign, national security and defence policies and strategies would be. Defence is a core function of an independent state and the Scottish Government would face difficult choices over its defence arrangements, including: the role of its armed forces, what threats it intends to counter and what foreign policy it intends to support; international relationships, including membership of NATO; the level of resources allocated for defence; and the future of the defence industry in Scotland. People in Scotland need to know how the Scottish Government proposes to provide for the protection and security of Scotland if it separates from the UK. It is our view, however, that whatever choices it made, an independent Scotland would lose significant benefits that are delivered by being part of the UK.

22. Although the Scottish Government has previously posited a number of options and has made a number of broad statements relating to defence in an independent Scotland, it has given no clear information on the detail of its plans and it is therefore difficult to say what the implications for the future defence of Scotland would be.

23. There is no doubt that a smaller nation of just over 5 million people would have a much smaller defence presence than that of the UK with over 60 million. There would be a much smaller tax base and a much smaller recruiting base. That would inevitably have implications for defence manpower and budget and the armed forces’ capabilities, including being able to protect its own territory and to deploy on exercises and operations, especially those connected with any international commitments.

24. Financing and equipping independent Scottish armed forces would be the responsibility of the Scottish Government. We have no real sense of the likely costs, but it is clear that the economies of scale we currently enjoy in the integrated UK armed forces would be reduced. Not just combat, but combat support (e.g. engineering, artillery and aviation) and combat service support (e.g. logistics, medical and welfare) would be needed, as well as command and control, equipment procurement and support, training, human resources and financial management. The Scottish Government would also need to consider what intelligence, cyber and Special Forces capabilities it would require. All this would be expensive to generate and would need to be built up almost from nothing. There would be considerable start-up costs.

25. The creation of independent Scottish armed forces would not be as simple as transferring existing Scottish-recruited or Scotland-based units as this would not create in any sense a coherent, credible or balanced force. The UK armed forces are a totally integrated, pan-UK organisation. Command and control, training, logistic support, equipment procurement - how these would be done in the context of an independent Scotland remain unanswered questions that would need to be addressed from scratch.

26. Furthermore, members of the UK armed forces could not simply be co-opted. Among the most difficult issues affecting defence would be questions in relation to citizenship, namely who was to be regarded as Scottish and how that would affect the obligations of Scottish members of the armed forces. An important point to note is that it is far from clear that individual members of the armed forces who came within an agreed definition of Scottish would automatically choose to join the armed forces of an independent Scotland. Those serving in the UK armed forces can expect varied and interesting careers within one of the most highly regarded and well equipped forces in the world. The prospect of smaller and perhaps less globally active armed forces could be for some a less rewarding prospect.

27. In terms of defence industry in Scotland, should it decide to separate from the UK, we are sure that companies there would continue to make strong bids for UK defence contracts; but they would then be competing for business in an international market. And it would only be eligible to bid for contracts that are competed outside the UK. It would no longer be eligible to bid for those contracts that are subject to exemptions from European Union procurement rules to protect essential national security interests and are therefore placed or competed within the UK. Similar considerations would apply to the security industry in Scotland; for instance, Scottish registered companies would not have a right to compete for any future government-to-government security contracts that the UK Government entered into.

28. The procurements of the Type 45 destroyers and the Queen Elizabeth Class aircraft carriers have been subject to such exemptions. Other than during the World Wars, the UK has not had a complex warship built outside the UK since the start of the 20th century at least. All the UK’s new complex warships are being built in UK shipyards and we remain committed to utilising UK industry in this area. So this is understandably a matter of concern for the ship building industry in Scotland.

The means and timescale of any necessary separation; whether and how any defence shortfall might be made good.

29. The UK Government is not making plans for independence as we are confident that people in Scotland will continue to support Scotland remaining in the UK in any referendum.

30. It is impossible to say at this stage how a separation would be effected and how long it would take. It would clearly be a highly complex, time-consuming and costly process; but it is not possible to place any figures on these.

The extent to which, and circumstances in which, an independent Scotland might continue to contribute to defence goals shared with other parts of these islands and other countries.

31. The Scottish Government has not set out any concrete proposals for sharing facilities, bases or support. Until it has set out credible plans for defence and security of an independent Scotland, it is not possible to say whether or not facilities, bases or support could be shared.

32. Although the Scottish National Party is due to re-consider its policy on NATO membership in the autumn, both its and the Scottish Government’s current policy is to commit to the Partnership for Peace. This is a valuable programme of co-operation between allies and other countries in the Euro-Atlantic area and many Partners make valuable contributions to NATO operations. But it is not the same as full NATO membership. It does not provide a voice in NATO’s senior decision making bodies, nor, because the Washington Treaty does not apply, does it bring with it NATO’s Article 5 collective defence assurance where an attack against one of the Allies shall be considered as an attack against all, if all NATO members agree.

33. The UK Government believes that Scotland is certainly stronger in defence terms as part of the UK within NATO and does not believe it would be in the interests of an independent Scotland not to be a member of NATO. However, if an independent Scotland decided that it wanted to be a member of NATO, the North Atlantic Council would need to decide whether or not it would meet the criteria for membership. There is no guarantee that NATO membership would be automatic. NATO’s Strategic Concept, as agreed by all Allies at the 2010 Lisbon Summit, reiterated that NATO’s deterrence posture will consist of both nuclear and conventional forces and that NATO will remain a nuclear alliance for as long as nuclear weapons exist. This posture was also affirmed in NATO’s Deterrence and Defence Posture Review, adopted unanimously by Allies at the Chicago Summit in May 2012. The Scottish Government’s position regarding nuclear weapons and their presence in its territory would therefore be an important consideration.

Effect of defence on the debate on UK governance

· Who in MOD is considering the effect of defence transformation on the debate concerning separation of the UK?

· Who in the MOD is looking at the implications for the security of the UK under the Crown of separation of the UK? Do the contingency plans, for example, include a federal UK (Crown) Defence Policy and Forces, formed from whatever political structures emerge?

· Is there routine assessment within the MOD of the regional implications of defence policy? If so, where is it carried out? To what extent are such implications considered when decisions are being taken?

34. The UK Government is confident that people in Scotland will continue to support Scotland remaining in the UK in any referendum and we are not therefore making plans for independence. Accordingly defence transformation continues as planned.

35. Leading up to the referendum, the UK Government will produce detailed evidence and analysis to assess the benefits of Scotland remaining in the UK. The protection of our citizens, including our defence capability, will be one of the key themes of this work alongside our position in the world and the economic benefits. Work on this in the Ministry of Defence is being led by the Director General Security Policy.

36. Defence and security is the first duty of any government, and the deployment of armed forces one of its weightiest responsibilities.

37. We are not aware of any successful precedent where armed forces have been shared by sovereign nations. Recent examples of separation of sovereign states – e.g. Czechoslovakia or Sudan – have seen the creation of independent armed forces. It is similarly not clear to us how it could work in this eventuality, given the possibility of disagreements over their use.

38. Defence policy is set on a UK basis within the overarching framework of the UK National Security Strategy and Strategic Defence and Security Review under the National Security Council. The interests of all the regions of the UK are included in this. Any specific regional effects of decisions, such as where to base defence capabilities, are considered as part of regional impact assessments of individual projects. The Scotland Office also has a role in ensuring that any considerations for Scotland are reflected within the UK Government.

Effect of Scottish independence on UK security

· It is already clear that if Scotland were to become independent, the possible implications for the defence of the realm are likely to be very considerable. Where in the MOD is the work being done to assess them?

· What are the implications for Defence of the retention of the Union of the Crowns but separation of the Parliaments?

· Who in MOD/FCO/NSC is considering the implications for the Deterrent? And for the basing of nuclear-powered submarines?

· Is the MOD considering the implications for UK defence of the impact of independence on different political structures? How would it affect Alliances, UN, NATO, UK-EU, AUS-CAN-UK-US? What is the thinking on whether an independent Scotland could automatically remain a member of NATO? Would the position differ between a Scotland which continued to host the nuclear deterrent and one which did not?

· How would the air defence of RUK be assured from the North if Scotland did not possess an effective fighter/radar/C2 system?

· What are the precedents for joint basing and what might be the command and control arrangements in the event of one country being involved in an action and the other opposing it?

39. As explained earlier, work in support of the UK Government programme to produce detailed evidence and analysis to assess the benefits of Scotland remaining in the UK is being led in the Ministry of Defence by the Director General Security Policy. However, as also explained earlier, without knowing what a future independent Scottish Government’s approach to defence would be we cannot predict what the implications would be for defence of the UK or for defence of an independent Scotland.

40. Defence is a core function of an independent state; so even if an independent Scotland were to have the same head of state as the UK we would assume that it would have complete independence with separation constitutionally of foreign policy, defence and armed forces (as do, for example, Australia and Canada). It would still be for an independent Scottish Government to decide what its foreign, national security and defence policies and strategies would be, and hence its defence arrangements.

41. The UK Government has committed to maintain the strategic nuclear deterrent and to continue with the programme to renew it as debated and approved by a significant majority in Parliament in 2007. The UK Government is not making plans for Scottish independence; we have no plans to move the nuclear deterrent from Her Majesty’s Naval Base Clyde. The initial decision to base the nuclear deterrent on the Clyde was taken in the 1960s, with the introduction of the Polaris SSBNs. This decision was reviewed in the 1980s alongside the decision to introduce the Trident SSBNs. At that time it was concluded that the Clyde continued to offer the best location; nothing has happened since to alter that conclusion. Her Majesty’s Naval Base Clyde is the largest single site employer in Scotland, hosting over 6,000 Naval Service, Ministry of Defence civilian and contractor personnel. The Base is a major source of employment for highly skilled workers and a significant contributor to the local economy. Plans are already in place to base all the Royal Navy’s submarines, including the attack submarine (SSN) fleet on the Clyde by the end of this decade. In addition to the facilities offered by the Naval Base, there are a considerable number of other facilities in Scotland which also support the SSBN and SSN fleets. These include ranges, training areas and industrial facilities.

42. If the result of any referendum on Scottish independence were to lead to the current situation being challenged, then other options would have to be considered. Any alternative solution would come at huge cost. It would be an enormous exercise to rebuild the facilities. It would cost billions of pounds and take many years. It is impossible to estimate sensibly how much it would cost to replicate the infrastructure, which would depend heavily on timescales and the precise scope of the facilities that might be required. Her Majesty’s Naval Base Clyde underwent a significant investment programme to prepare it for the introduction of the Vanguard Class submarines and Trident missile system; that programme cost in the region of £3.5 billion at 2011/12 prices. Any replication of facilties would cost at least that much and probably more.

43. International precedent suggests that, in the event of Scottish independence, the remainder of the UK would maintain its leading position in the major international institutions and organisations. Thus the remainder of the UK would continue in membership of NATO and the European Union and retain its permanent membership of the United Nations Security Council. It would remain one of the largest contributors, in political, policy, capability and financial terms, to all of those organisations. Similarly, the remainder of the UK would maintain its strong network of alliances and relationships.

44. As explained earlier, although an independent Scottish Government would need to decide whether it wanted to be a member of NATO, we do not believe it would be in the interests of an independent Scotland not to be. However, if it did want to be a member the North Atlantic Council would still need to decide whether or not it would meet the criteria for membership; and there is no guarantee that it would be automatic. NATO’s Strategic Concept, as agreed by all Allies at the 2010 Lisbon Summit, reiterated that NATO’s deterrence posture will consist of both nuclear and conventional forces and that NATO will remain a nuclear alliance for as long as nuclear weapons exist. This posture was also affirmed in NATO’s Deterrence and Defence Posture Review, adopted unanimously by Allies at the Chicago Summit in May 2012. The Scottish Government’s position regarding nuclear weapons would therefore be an important consideration.

45. As regards air defence from the north, the UK and NATO would clearly seek to ensure that this was not undermined by Scottish independence. However, until the Scottish Government has set out clearly what its plans are, especially with regards to NATO membership, it is too early to decide any shape for a revised air defence posture of the remaining UK. Command and control arrangements would be a key factor in any such considerations.

Financial effects

· What assessment has been made of the financial cost of making good any shortfall in defence capability resulting from Scottish independence?

· What are the financial implications of the different options in respect of Scottish independence? For example, the Army is currently engaged in basing reform and the return of troops from Germany. What effect is the uncertainty having on these? Presumably the MOD does not intend to spend money on converting Scottish RAF bases for Army use if Scotland is to vote for independence? What consideration is being given to retaining spare accommodation capacity in the UK to guard against losing capacity in Scotland?

· What extra costs are resulting from any delay in decision-making?

46. No assessment of the financial implications for defence of Scottish independence has been made. There would be potentially significant costs of separation; particularly for an independent Scotland which would likely face large start-up costs to set up its own defence arrangements, including separate armed forces, support and specialist capabilities.

47. The possibility of Scottish independence is not a factor in our decision-making regarding future defence arrangements, including basing options. We are continuing to plan for the future on the basis that Scotland will remain part of the UK; and we are not delaying decisions as a precaution against the unlikely event that Scotland might choose to separate. Although it will be better to have more certainty about Scotland’s future sooner rather than later, business continues as usual.

Armed Forces Covenant

· If it becomes necessary to move UK personnel and assets south of the border. What arrangements are foreseen for the provision of health, education and other social services for the personnel and their families during any handover period?

48. In the unlikely event that Scotland were to become independent, any relocation of UK armed forces personnel and their families would take full account of their needs for health, education and other social services, both for the long term and during any transition period.

October 2012