Scottish Government lifts weapons industry support ban

The Scottish Government has announced a course correction in its defence industrial policy, lifting its ban on public support for the production of munitions while at the same time halting new awards of funding to defence firms linked to Israel or other countries accused of genocide.

First Minister John Swinney set out the measures on 3 September against the backdrop of two crises. In Gaza, the death toll has passed 63,000.

In Europe, Russia’s invasion of Ukraine has dragged into a third year, exposing vulnerabilities in NATO’s supply chains and Europe’s ability to rearm at pace. The First Minister argued that both wars demanded action, albeit in different directions.

“The situation in Gaza is a man-made humanitarian catastrophe. We must confront this crisis with urgency, compassion, and an unwavering commitment to accountability,” he said. But he also underlined that the war in Ukraine showed Scotland and the wider continent could not afford complacency.

“Defending our country – defending our continent – is a duty of government. Anyone watching the ongoing war in Ukraine would, I hope, recognise the reality of the importance of defence. Indeed, the invasion shows we live in a world in which our national security faces much greater and more immediate threats.”

For years, Holyrood’s policy prohibited Scottish Enterprise and other government agencies from supporting any project that could be classed as munitions production. Earlier this year that stance almost derailed an £11 million submarine welding facility on the Clyde, after a £2.5 million Scottish Enterprise grant was blocked on policy grounds. The project was ultimately rescued when the UK Government stepped in with funding, but the episode exposed how rigid the policy had become and the tensions it created with Scotland’s defence industrial base.

Swinney acknowledged that reality directly. “In recognition of that changed international landscape, the Scottish Government will lift the restriction we have applied on the use of support for the production of munitions,” he said. “But, in the face of genocide, there can be no ‘business as usual’.”

The new framework means that public support can now flow to defence projects, provided companies can demonstrate that their products are not being used militarily by Israel or by other states accused of genocide.

Swinney was clear that the government would pause new funding for firms involved with Israel, adding: “Any defence company seeking support from the Scottish Government will have to demonstrate that its products are not involved militarily with Israel.”

The shift was paired with a substantial humanitarian package. Scotland will provide £400,000 to establish the Gaza HOPES Field Readiness Hub, billed as a rapidly deployable hospital able to deliver surgical, maternity and paediatric care in the territory.

A further £600,000 will go to the UNOCHA-led Humanitarian Fund for the Occupied Palestinian Territories, and up to 20 injured children from Gaza will be brought to Scotland for treatment later this month.

“We are witnessing a humanitarian disaster of historic proportions. And yet, the bombs continue to fall. The bombs and rockets must stop. Humanitarian aid must flow,” Swinney said.

For defence industry leaders, it recognises the strategic importance of Scotland’s role in shipbuilding and advanced engineering. For ministers in Edinburgh, it allows the government to continue claiming a strong ethical stance on international humanitarian law.