Kate Forbes: Scots arms firms key to growing economy

ADS, which represents more than 1,200 businesses across the UK’s aerospace, defence, security and space sectors, said Scotland stood to benefit from a share of the new Defence Growth Deals announced earlier this month.

But it warned the money would only flow north if Holyrood became an “active and wholehearted partner” in shaping projects.

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The SNP government has long been squeamish around Scotland's £9bn defence sector, and until earlier this month refused to allow taxpayers’ cash to go to companies involved in the manufacture of munitions.

They would only offer cash to firms to spend on other areas that allowed them to diversify away from the arms industry.

That saw them accused of “student union politics” when Scottish Enterprise refused to provide £2.5 million towards a planned £11 million specialist welding centre in Clydebank, linked to submarine construction.

John Swinney has now dropped what one of his ministers had previously described as a 'principled' position .

The First Minister said his government needed to “recognise the reality of the importance of defence” in light of the war in Ukraine.

Earlier this month, Defence Secretary John Healey unveiled the UK Government’s new Defence Industrial Strategy (DIS) as part of the plan to increase defence spending.

The £250m growth deals are designed to channel funding into five regions — Cardiff, Belfast, Glasgow, Sheffield and Plymouth — supporting skills, research and development, supply chains and infrastructure.

Scotland’s deal is expected to be unveiled in the coming months, with officials promising to work “with the devolved government and other key stakeholders” on a bespoke package.

ADS said now was the time for Scotland to secure its place in that pipeline.

A spokesman told The Herald that modelling suggests the UK Government plan to liftspending to 3% in the next parliament would mean 50,000 additional jobs, while 3.5% would mean 85,000 additional jobs.

He said: “We have defence growth deals currently on the table with £250 million of new money in there. To secure that, it will come down to making the case, and we want to see that as a partnership case on behalf of Scotland.

“We need the Scottish Government to sit down with the sector and help design and be a wholehearted partner in the delivery and design of those defence growth deals, and perhaps overcome some of the reticence they have shown in the past.

“If we do not have that, then we miss the opportunity.”

“We are in an incredibly fortunate place,” the spokesman added. “We have representation from most, if not all, of the primes active in these sectors, whether it is BAE, Thales, Leonardo, Spirit AeroSystems, Boeing, Airbus. You name it, we have that footprint here in Scotland.

“Sitting behind that is all the support of the supply chain you would expect — SMEs bringing the innovation, academia and further education providing the skillset. We want to see some of those small and medium companies similarly grow to become the larger companies of the future.”

The trade body is preparing to launch its first Scottish election manifesto ahead of the 2026 Holyrood vote, arguing it needs to establish a “new relationship” with the next government, regardless of which party forms it.

The spokesman added: “Although defence is reserved, everybody here in Scotland has their own part to play, from further education colleges to local authorities to, crucially, the Scottish Parliament and Scottish Government.”

ADS also warned Scotland was in danger of missing investment opportunities because of historic underinvestment in engineering and technical skills.

“The best time to plant a tree is 20 years ago. The second-best time is today,” he said.

“When it comes to engineering skills, we wish we had invested more heavily in them five, 10, 15 years ago, but let us do it now.

“All engineering sectors are seeing unprecedented levels of growth, whether it be infrastructure, electricity networks or renewables. They are all crying out for a very similar set of skills. So this is a great opportunity and we would hope the Scottish Government recognises that opportunity, invests in those skills and partners with sectors like ours to make sure that we deliver those skill sets.”

The organisation pointed to the importance of the Scottish Government’s implementation of the Withers Review of skills delivery, and warned against further cuts to further education budgets.

Beyond skills, ADS also highlighted a shortage of suitable industrial land.

“Another key issue for our sector is literally just finding the manufacturing space,” the spokesman said. “We need a partnership with local authorities to make sure we get the right balance between housing, infrastructure and manufacturing sites. All this growth will require new space and we need to make sure we get the right balance between those components.”

Responding to the comments from ADS, Ms Forbes said: “The defence sector is fundamental to our national security and a strategic driver for Scotland’s economy.

“We welcome the publication of the UK Government’s Defence Industrial Strategy, in particular the commitment to Defence Growth Deals and any proposed plans for Scotland, including investment in skills.

“The Scottish Government is continuously engaged in constructive dialogue with both the UK Government and ADS on the opportunities for Scotland’s defence sector, to ensure that we benefit from any actions set out in the strategy.”