Defence industry says Scottish support has been negligible

Scotland’s defence industry has received negligible public-sector support in Scotland despite delivering billions in economic value and tens of thousands of skilled jobs, MPs were told during a Scottish Affairs Committee evidence session on defence skills and employment.

Giving evidence to the committee, Warrick Malcolm, Director of ADS Scotland, said that while the sector was experiencing its most buoyant period in decades, public-sector backing in Scotland had lagged well behind that seen elsewhere in the UK.

He told MPs that across aerospace, defence, security and space, the sector contributes £3.7 billion in value added to the Scottish economy, with turnover reaching £9 billion and employment standing at nearly 57,000 people. Direct employment has grown by 20 percent over the past five years, with productivity across the sector now 49 percent higher than the UK average.

Despite that performance, Malcolm said public-sector engagement had been minimal.
“In those 20 years, we’ll have seen 10 Farnborough International Air Shows, 10 Paris Air Shows, 10 DSEI exhibitions, multiple trade missions specifically for the defence sector. I think it’s not unfair to say that Scottish public-sector support for those events has been negligible.”

Malcolm said Scotland had missed repeated opportunities to capitalise on defence-led growth, particularly at a time when rising defence spending could deliver significant employment benefits. ADS modelling suggests that a move to 3.5 percent of GDP on defence could create up to 85,000 new defence jobs across the UK, with around 13,000 of those potentially in Scotland.

Andrew Kinniburgh, Director-General of Make UK Defence, reinforced the sector’s importance to Scotland’s skills base, particularly in engineering and manufacturing. He told MPs that defence companies generate the majority of engineering apprenticeships in Scotland and that salaries in the sector are around 40 percent above the UK median.

“These are long-term programmes,” he said, referring to major defence contracts. “You genuinely have a career for a very long time in these businesses.”

Both witnesses highlighted the role of defence SMEs in supporting rural and regional economies, with companies spread from Aberdeen to the Western Isles. Kinniburgh cited QinetiQ as a major employer in the Hebrides and said SMEs in Scotland routinely supply programmes across the UK. However, Malcolm warned that policy uncertainty at devolved level was creating friction just as other parts of the UK focused on maximising what he described as the “defence dividend”. He said Scotland had faced repeated challenges around ammunition policy and that new guidance introduced in September had taken months to clarify.

“We are hearing positive noises from the Scottish Government,” Malcolm said, “but it is for others to determine whether the positive phrases about the defence industry are supported by the actions.”

Pressed by MPs on whether Scotland was receiving its fair share of Ministry of Defence spending, Malcolm acknowledged that direct MOD expenditure in Scotland remained lower than the national average but said this masked the scale of supply-chain activity, particularly among SMEs. Kinniburgh added that uncertainty around Scottish Government policies risked deterring inward investment, citing concerns that companies could be discouraged by perceptions of political hostility towards defence-related activity.

Both witnesses stressed that defence remained a reserved matter but argued that skills, economic development and inward investment policies were crucial areas where devolved government action could make a material difference. Malcolm concluded that Scotland had a strong industrial base and workforce but warned that without consistent public-sector support, the country risked falling further behind as defence investment accelerates elsewhere in the UK.