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The defence industry is very important to the Scottish economy, providing more than 15,000 jobs and contributing between £ 1.8 billion-£2 billion annually to the Scottish economy. The impact of separation upon the Scottish defence industry will be substantial and distinctively negative. We have been unable to identify any defence supplier or product which will benefit from separation and a large number which will suffer.
Those firms or subsidiaries dependent on British Army, RAF or Royal Navy orders under Article 346 of the European Union Treaties (which allow the UK to reserve certain orders to national suppliers) will lose such work, which will be transferred to other parts of the UK. We also recognise that the market offered to defence suppliers in a separate Scotland will be negligible in size compared to that of the United Kingdom as a whole and the joint projects in which it participates.
A separate Scotland, particularly one which has deported the Royal Navy's submarine force and potentially enforced unilateral nuclear disarmament upon the United Kingdom will not necessarily be seen as a reliable ally or as a trusted partner, NATO or others, for collaboration in those large international projects which are the main routes to market for many Scottish defence products.
Similarly a future separate Scotland's access to secret technology owned elsewhere is unlikely to be automatic. Even if access for US and other nuclear forces to Scottish sea, land and air is allowed on a "don't ask, don't tell" basis, there will not necessarily be the maximum security clearance necessary to allow export to, or collaboration with, US or other suppliers or purchasers.
A separate Scotland is unlikely to be able to fund the level of research and development necessary to maintain Scottish companies at the cutting edge of technology, thus they will soon degenerate to commodity suppliers which will face international competition.
The defence industry in Scotland is designed to meet the needs of its main customer—the Ministry of Defence. A separate Scotland would operate on a much smaller budget and need very different equipment. It is essential that the Scottish Government spells out, as quickly as possible, its intentions for procurement and research budgets, and foreign and defence policies.
Many thousands of people in defence jobs in Scotland need to be told, before the referendum, of their prospects for future employment.
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