Scottish Secretary on Defence Spending: SMEs, European Cooperation, and Trump’s Challenge.
Scottish Secretary Ian Murray has outlined the UK Government’s commitment to expanding SME participation in defence spending, highlighting Scotland’s key role in the industry while also addressing broader geopolitical concerns, including European cooperation and the impact of US policy under President Trump.
This morning in Glasgow, I asked Murray about the significance of the government’s new ‘SME hub’ initiative, which aims to increase SME involvement in defence procurement. He emphasised that while the increase in defence spending to 2.5% of GDP strengthens national security, it also serves as an economic driver, particularly for smaller businesses.
“We’re here today because the government has announced that we will be putting efforts into making sure that SMEs can be fully involved in the increase in defence spending,” he explained.
“Maybe in the past, it’s been very difficult for SMEs to be involved in wider government procurement, but actually, it’s been even more difficult for SMEs to be involved in MoD procurement. We’re going to try and change that to make sure all communities can benefit from this increase in spending.”
Scotland’s SME Opportunities
When asked about the specific benefits for Scotland, Murray was quick to underline the nation’s major role in UK defence—from shipbuilding in Glasgow to the nuclear deterrent on the Clyde. With tens of thousands of Scots employed in defence-related industries, the new initiative aims to broaden the supply chain to include more SMEs.
“We have a very big defence footprint in Scotland. They build the best ships in the world in Glasgow. We have a nuclear deterrent, of course, on the Clyde as well, and we have defence companies all over Scotland employing tens of thousands of people,” he said.
He also stressed that spreading economic opportunities was key, particularly in deindustrialised communities. “The pipeline of the supply chain in terms of SMEs must benefit from that spending as well, because it’s about the jobs locally, it’s about the careers of the future, it’s about giving young people those opportunities, but it’s also about the regeneration of our deindustrialised communities.”
Reducing Reliance on the US Defence Industry?
With the UK Prime Minister pushing for closer European defence cooperation, I asked Murray whether initiatives like this could help reduce reliance on the US defence industry and strengthen British and European capabilities.
Murray acknowledged that while European defence industries are already deeply interconnected, there is a clear interest in closer cooperation.
“The Prime Minister is trying to demonstrate that it’s in all of our self-interest—in terms of safety and security across Europe, Ukraine, and the United Kingdom—to work together,” he explained. “We need that peace agreement for Ukraine to be permanent, and the reason it can be permanent is if all the European allies step up and work together with that US guarantee.”
Can the UK Offset a Less Involved US?
With President Trump’s administration taking a more reserved approach to European security, I asked whether the proposed increase in UK defence spending would be enough to compensate for less US involvement.
Murray pointed to the government’s long-term commitment to raising defence spending, with an increase to 2.6% of GDP by 2027 and a pathway towards 3% in the next Parliament.
“The challenge that President Trump, I suppose, has given to Europe is to step up,” he said. “The Prime Minister has said we’ll accept that challenge and step up, and we’ll encourage our European allies to do the same, because it is in our self-interest to do so.”
While acknowledging the continued importance of NATO, Murray reinforced that the UK’s defence partnership with the United States remains the closest in the world, through cooperation on intelligence sharing, NATO, AUKUS, and other security agreements.
“We work together very closely on NATO, of course, on AUKUS, and a whole host of other defence projects. The closest allies in the world in terms of defence, security, and intelligence are the UK and the United States. So these are well established, and of course, we want to make sure not only we keep them well established, but we grow them as well.”
JFD’s Role in NATO Submarine Rescue: A Model of Defence Cooperation
Beyond the UK Government’s push for increased defence spending and SME involvement, international collaboration remains a crucial element in strengthening European security.
JFD, a global underwater specialist based in Glasgow, provides a prime example of such cooperation through its role in the NATO Submarine Rescue System.
I spoke with Rob Hales, Managing Director of JFD, about the company’s work and its significance within NATO. JFD is best known for its expertise in submarine rescue, and as Hales put it, “we’re in the home here, in Glasgow, of the NATO submarine rescue system, something we’re very proud of, working with the UK, France, and Norway.”
The NATO Submarine Rescue System (NSRS) is a multinational project, with the UK, France, and Norway acting as partner nations. This system ensures that, in the event of a submarine emergency, a rapid-response team can deploy to rescue trapped personnel. The project is a key example of European defence cooperation and interoperability.
When I asked Hales about the wider structure of the NSRS, he highlighted its international scope. “We’re actually doing a multinational exercise today off-camera, which has observers also from Sweden and the US,” he said. “The militaries are collaborating, working together as a project team for the system that JFD supports here.”
This level of multinational integration is crucial as European nations look to increase their defence capabilities, particularly in light of concerns over a potentially less-involved United States under President Trump. While NATO remains a cornerstone of European security, the UK and its allies are actively exploring ways to enhance their own defence autonomy while maintaining strong transatlantic ties.
JFD’s involvement in submarine rescue operations worldwide underscores how British defence companies are not only contributing to national security but also strengthening European military cooperation. As Hales put it, “this is a capability we offer to navies around the world,” ensuring that submarine rescue remains a collective effort among NATO allies.
With Prime Minister Keir Starmer advocating for greater European collaboration, projects like the NSRS offer a template for future UK-led defence initiatives.
A New Industrial Era for UK Defence
The new initiative comes as part of the UK Government’s broader Defence Industrial Strategy, which aims to use defence spending as a driver of economic growth, with a specific focus on SMEs.
Nearly 70% of defence spending already goes to businesses outside London and the South East, but only 4% of that went to SMEs in 2023-24. The new support hub and direct SME spending targets are designed to change that.
With an increase in spending, new opportunities for SMEs in the defence supply chain, and a focus on strengthening European defence cooperation, the UK Government say it is aiming to navigate a shifting global security landscape while ensuring economic benefits are widely distributed.
