A call to arms on defence

In November last year, the 10th secretary general of Nato warned that this country was in grave danger thanks to the threats posed by a wide range of adversaries, from enemy states to cyber criminals. George Robertson said that Britain was “under-prepared, underinsured, under attack and we’re not safe”.

Baron Robertson of Port Ellen, who was also defence secretary from 1997 to 1999 and was a winner of the lifetime achievement prize at this year’s Herald Scottish politician of the year awards, has said, repeatedly, that we are not ready for the crisis that confronts us.

Governments across the UK will have to take his advice seriously as the danger grows, from Russia, China, Iran to organised crime, and crucially, an increasingly unpredictable ally in the US. Donald Trump’s recent national security strategy claimed that Europe is facing “civilizational erasure” and prioritised “strategic stability” with Moscow over countering Russian aggression, as seen in Ukraine for the last four years.

But what does this mean for Scotland?

Defence spending is on the rise in the UK and throughout Europe. Much as we might wish for national rearmament to be unnecessary, the reality of Mr Trump’s demands on Nato countries to raise defence budgets up to the equivalent of 5% of national economic output (GDP) will have consequences at home as well as abroad. For obvious national security reasons, this extra cash will have to be spent domestically rather than on overseas imports.

Indeed, there is an opportunity to use this uplift in public spending to support jobs and investment in national industries, as has been called for by leading defence companies and trade unions. We are uniquely placed to attract jobs and investment in defence. The aerospace, defence, security and space sector already employs 33,500 people in Scotland, including 1,500 apprentices, and contributes £3.2bn to the economy.

Ministry of Defence (MoD) spending with industry is over £2bn north of the border, almost 10% of the total, and is higher than Scotland’s share of the UK population. Scotland is also home to strategically important UK defence assets, from the nuclear deterrent to RAF Lossiemouth – the base for maritime patrol aircraft that protect our skies and seas from Russian interference – and our shipyards on the Clyde and the Forth.

At the end of December, the SNP claimed Scotland was being ‘short-changed’ on defence spending by the the UK Government, after figures from the House of Commons Library showed that in 2024-25 the MoD spent £390 per capita north of the border while spending across the UK as a whole came in at £460 per capita.

However, the right policies are needed from both the Scottish and UK governments to realise our potential. There is a key need to focus on skills, to produce a workforce that is ready to take advantage of the jobs that are on offer. We need more welders, plumbers, joiners and electricians. In October, one of Scotland’s leading defence manufacturers was forced to fly 300 welders over from the Philippines just to plug a shortfall that it could not recruit from the domestic workforce.

Encouragingly, the Scottish Government shifted its approach to the defence industry this year. The SNP previously had a longstanding policy whereby Holyrood and its key agencies, like Scottish Enterprise, could not use public funding to support munitions production.

However, that changed in a speech made by the first minister in September when John Swinney warned that: “Defending our country – defending our continent – is a duty of government. Anyone watching the ongoing war in Ukraine would recognise the reality of the importance of defence…we [now] live in a world in which our national security faces much greater and more immediate threats.”

The changed international picture, Mr Swinney argued, demonstrated why the Scottish Government could now provide grants and other forms of financial assistance to certain defence companies. The Scottish Government needs to work with the UK Government, and industry, to go further. Colleges are training around 2,000 welding and fabrication students every year but with additional funding, this could be increased to over 5,000.

A recent survey also found that firms expect a 58% increase in engineering and fabrication roles over the next two years. It’s not that the talent and jobs don’t exist in Scotland – it’s that our colleges don’t have the funding to train enough people to meet demand. This is a direct consequence of investment in our colleges falling by 20% since 2021/22.

There are also actions that our governments should take. The MoD’s procurement needs to be sorted out, to avoid bottlenecks in the supply chain and to smooth demand because other parts of government are also making large investments, to construct major projects like the dualling of the A9 through the Highlands and the expansion of the electricity grid. Companies seeking public contracts to build transport and energy infrastructure are competing for similar skills in a limited workforce pool.

Managing the tendering of contracts sensibly avoids a crunch where the supply chain cannot cope and costs are pushed up, landing a larger bill onto the taxpayer. Both governments should also be using procurement to support small and medium sized businesses (SMEs) and technology firms, so defence spending can be a catalyst for innovation. Only 4% of defence spending goes to SMEs and the share of this that is spent with Scottish SMEs is only 2.5% (£32m).

These companies face challenges in dealing with the MoD which can be an unwieldly customer as the military goes through capability reviews, leading to “feast and famine” in defence investment. Again, there are some grounds for optimism. The UK Government’s strategy for the defence sector, published in September, accepted many of these criticisms and came up with a plan to fix MoD procurement, committing to increase defence spending on SMEs by £2.5bn by May 2028.

However, the purchasing of military kit is a problem that has bedevilled successive governments, as shown by the long-running controversy around manufacturing new Ajax armoured vehicles for the army. Last year witnessed a significant erosion of our industrial base, with job losses in the North Sea, the ending of oil refining at Grangemouth and the announced closure of the Fife ethylene plant at Mossmorran. Whether we like it or not, spending on national security is on the rise and investing in defence could boost the faltering Scottish economy and create much-needed high paid jobs.