Economics of Independence

Defence in an independent Scotland: Spend Less to Get More

Unaffordable and unnecessary weapons of mass-destruction

Unaffordable and unnecessary weapons of mass-destruction

The economics of defence is an important factor in the referendum debate and Scottish independence provides an opportunity to re-prioritise defence spending so that it makes the people of Scotland safer and allows us to play a sensible role in global affairs. There are numerous examples of other medium sized European countries that set out this path that we can learn from.

However, the clearest benefit of a Scottish Defence Force is combination of both a financial and defence dividend.  Scotland ploughs a large proportion of its national wealth into defence structures, yet receives far less investment in Scotland by return.

The UK military overspend driven by the continuous ‘at war’ status, and projects like the renewal of Trident nuclear weapons, result in Scotland paying billions of pounds in defence costs every year on projects that are not wanted by Scots.  An independent Scotland can save money and build a better equipped Defence system that meets Scotland’s needs.

Westminster military waste

There are many examples of wasteful Westminster spending in defence which wouldn’t apply to a Scottish defence force.  The latest Ministry of Defence figures said there was £1.57 billion spent on defence in Scotland in 2007/08. However, in that year Scotland paid in £2.84 billion towards UK defence spending. (GERS 2010-11). There is a huge gap in how much Scotland pays for defence and how much is actually spent in Scotland.

With recent cuts to RAF Leuchers, the downgrading of the Argyll and Sutherland Highlanders and the amalgamation into the ‘Scottish regiment’, this gap is set to continue if not increase. In terms of contracts, Scotland also received £1.9 billion less that its population share should merit between 07-08 and 11-12.

While Scotland pays over £1 billion extra in defence costs to Westminster every year, the most basic of Scottish defence interests are not in place.  The Royal Navy does not have one single major surface vessel based in Scottish waters. This is despite the fact that providing protection to offshore oil assets and fishing vessels is of prime importance to Scotland’s defence, security and economic interests. UK military priorities are instead focused on the Gulf and in maintaining the ability to ‘punch’ above its weight. Major naval vessels are therefore deployed to support strikes in Iraq, Libya, Syria or elsewhere. Billions of pounds are squandered every year on the Cold War Trident weapons system that Scots don’t want. Scottish MPs and MSPs have both voted against maintaining nuclear weapons.

Militarily, politically and economically, subsidising these activities is absurd for a country like Scotland. With an independent defence policy Scotland would make three substantial and immediate gains.
  • One, Scotland would be in control of its own decisions and not be dragged into wars that Scotland Parliament has voted against such as the second gulf war.
  • Two, Scotland will get a defence system that meets its needs.
  • Three, the people of Scotland will save a substantial sum of money every year. It really is one of the best bargains of a ‘Yes’ vote next year.

Defence savings – protection boost

Financial spending projections of politicians and academics for a Scottish Defence Force include these three advantages. The most expensive projection, by Angus Robertson MP, proposed £2.5 billion to be spent on a Scottish Defence force. This would save almost £1 billion a year. Defence analyst Stuart Crawford, in his report ‘A’ the Blue Bonnets’, calculated that a Scottish army, airforce and navy can be supported for between £1.5 and £1.8 billion. This spend would place Scotland alongside the likes of Norway and Denmark who spend around 1.5% of their GDP on defence. Either funding system would represent a significant saving from the £3.3 billion Scotland has to pay for UK military endeavours.

Aircraft-less aircraft carriers!

The new aircraft-less aircraft carrier!

The new aircraft-less aircraft carrier!

To take the example of the aircraft carriers, we are told that we run the risk of losing such related military contracts for our defence industries but Scotland has received £300 million in military contracts as a result of the aircraft carriers. However, the total cost is over £6 billion. Scotland – in contributing 9.9% of total UK taxation – subsidises such projects to a much larger sum of £614 million.

The costs continue to sky-rocket, with the end product is impotent for Scottish defence, not least as the UK government has admitted it doesn’t have any planes to put on the carriers!

The comparison with other medium sized nations is also useful to point out the opportunities Scotland has in reshaping its military priorities. The likes of Ireland, Norway and Denmark remain heavily engaged in peace-keeping deployment through the United Nations, in providing trade security from piracy and providing delegations for delicate conflict negotiations. Their role in shaping and often leading global affairs is undisputed. Medium countries can provide crucial support for peace and security.

Not projecting power but protecting peace

The clearest example of these diverging priorities is Trident. Westminster is determined, whatever criticism it receives, to waste billions of pounds on another generation of nuclear weapons. Army generals, foreign policy experts, former Defence Ministers, Scottish MPs and the Scottish Government are all opposed. Even the United States has briefed the media saying the UK would be better scrapping the missiles. Yet without an independent defence policy Scottish taxpayers will continue to subsidise weapons of mass destruction that we don’t want and will never use. The Scottish Trade Union Congress carried out an economic evaluation of the project and found that it costs Scottish jobs, if the money was spent elsewhere, it would generate far stronger economic outputs.

Trident is not actually a military weapon!

Feargal is third from the left

Feargal is third from the left

Feargal Dalton was a Nuclear Submarine Commander at Faslane naval base. He was a senior officer responsible for maintaining the UK’s nuclear weapons deployment.  His impression – both of Trident and of UK military policy – is that Scotland would do better as an independent country. “Trident is not actually a military weapon as such, it is a Strategic Weapon System which gives the UK political leverage on the global stage”, he told Business for Scotland.

As for UK military policy as a whole, Dalton says: “Like many areas there is an increasing divergence between the wishes of the UK government and the people of Scotland and Scotland’s ability to influence the political composition of Westminster Governments is limited or non-existent.  An independent Scottish Defence Force can operate differently”.

Dalton goes on: “A Scottish Defence Force will be set military tasks by a sovereign Scottish Government based at Holyrood.  These tasks will be very similar to those currently set for the UK Armed Forces and other European armed services; tasks such as defending Scottish territory and providing support to civil emergency organisations during times of crisis.  But where  the UK has a military task of projecting power globally, I would hope to see the SDF set the task of projecting global justice and peace.”

Scotland can save money and get a better defence service than we have at the moment. Dalton notes: “It will be up to future Scottish Governments to decide on defence spending but I would envisage that a great deal less would need to be spent but that more protection could be gained from increased conventional forces spending. It’s appropriate to say that Scotland will have a defence service that will execute tasks more representative of the aspirations of the people of Scotland but that the world renowned tradition and heritage of highly professional Scottish service people will continue long after independence.”

“Being a commissioned officer in the Royal Navy for 17 years is still one of the proudest and greatest personal achievements in my life; second only to being a husband and father.”

“Like all retired submariners, I still refer to myself as being a submariner not an ex-submariner.  I wear my submarine dolphins and veteran pin with pride.  I could write a book on my experiences over those 17 years but suffice to say that there was never a dull moment.  I have many, many fond memories that I will cherish forever.  I met many great people and many will be my friends for life.  Some good friends, of course, made the ultimate sacrifice in the line of duty.  I think about them daily and especially during the month of November.”

The independent defence dividend 

Pride in service and solidarity, for Dalton, are intertwined with a support for Scottish independence: Like all areas, Scotland’s future policies should be decided by those who are best placed and who care the most about Scotland.  Beyond that democratic opportunity, there is a chance to develop a Defence model which meets Scotland’s needs.  A better and more efficient lower cost conventional Defence Force, that is the Defence dividend for an independent Scotland.

Following a Yes vote Scotland can be better protected, get rid of nuclear weapons and save billions which could be used pay down our debt or be invested in growing our economy.

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About the author

Gordon MacIntyre-Kemp

Gordon MacIntyre-Kemp is the Founder and Chief Executive of Business for Scotland. Before becoming CEO of Business for Scotland he ran a small social media and sales & marketing consultancy.

With a degree in business, marketing and economics, Gordon has worked as an economic development planning professional, and in marketing roles specialising in pricing modelling and promotional evaluation for global companies (including P&G).

Gordon benefits (not suffers) from dyslexia, and is a proponent of the emerging New Economics School. Gordon contributes articles to Business for Scotland, The National and The Huffington Post.

13 Comments

  • […] spoke of cuts to welfare as though they were the only option. Nuclear weapons we’ll never use and maintain purely for prestige are more important than society’s most vulnerable. A train line is more important than […]

  • And what exactly are we going to do to dispose of the vangaurd class nuclear powered submarines and the nuclear weapons? Sell them on? Commence decomissioning? I’m from Caithness home to the Dounreay nuclear test site , now never mind the financial black hole within the MOD the way Dounreay works is despicable! Money on that site is no matter and I know from first hand experience that projects costing millions are started and seem to get a stage of near completion before someone realises ‘oh hang on this isn’t going to work’ and they start again with a bigger budget. Now as for our nuclear deterrent I think it is daft to portray anything nuclear as bad because I still do believe there is a future for nuclear power in this country once some idiots wake up and see that wind and solar power (no matter how windy it is in the highlands) will never really be an economical choice for supplying Scotland with electricity. The yes campaign has a lot of questions in which it needs to provide solid honest answers, and also it would perhaps be better if Alex salmons were to make it clear that a vote for independence is NOT a vote for the SNP.

    • Also coming from Caithness I fully understand the shambles of Dounreay and the money pit it is. I also believe we require nuckear power generation. However we do need to investigate the capacity of alternative and I know enough about wind to understand that it is not feasible or sustainable.However technolgy has progressed. Bottom line us we will develop a survivable system but we do not wish to be dragged constantly into illegal wars and now our children are being targeted for conscription. Never will my daughter or son fight in an islamic illegal war. Trident … who on earth do you think we will fire it at. Iceland… its daft to even to debate the un debatable.. your not happy with present situation .. ok So what are you going to do about it. Im guessing nothing but vote no and you have nothing. So why bother talking about it. Sit back and wait for your pension.

  • I’d be delighted to see the back of Trident in Scotland however, I remember hearing something about the Admiralty suggesting that Faslane could be designated as sovereign UK soil and therefore maintain the base there after Scotland becomes independent.

    I watched a very good lecture by the author of this article where he mentioned that a proportion of all UK assets would belong to Scotland post independence and therefore things like embassy sharing or redesignating some embassy buildings (I believe the example given was Washington DC) would be possible. With this in mind, is the same possible in reverse? Would former UK assets based in Scotland be majority owned by what’s left of their former owners and thus is a situation like the continuation of Faslane’s nuclear activities, despite the wishes of the country in which it sits, theoretically possible?

    • I have to say I am concerned about the treatment of the negotiations post YES vote. I simply (unfortunately) do not trust those in Westminster to have a fair and even hand, look at Boris Johnson and his ALL London approach to everything and you understand what the political class at Westminster is capable of. Bottom line though is there are international laws and European regulations which will protect Scotland. In a divorce I guess things can get messy and this will undoubtedly be no different.

      • I disagree it will be in everyones interests to make sure its a velvet divorce – currency will be conceded before the negotiations event starts and the markets will want sterling to still include oil and gas and Scottish exports. Once political rhetoric is out of the way everyone will act in a way that facilities the realisation of mutual self interest and that includes a fair distribution of assets and liabilities along the lines of legal presidents and international law.

        • The currency issue is an absolute non-starter… rUK is not going to risk having to bail out Scotlands banks (again) and potentially it’s Government for the sake of 500m of trade.

          It’s not going to be a velvet divorce, the UK will pick the bones of Scotland before tossing it to the side… the financial industry, shipping, the high margin bits of the oil industry (outside of services) will all go, Scotland will be obliged to take a large proportion of the debt (or risk being closed out of UK markets/lose assets) and in all probability will remain a basket case for decades until Socialism is rejected and common sense prevails.

          • Can’t believe you think they were Scotland’s. Banks – seriously? They were owned by the City of London’s shareholders! They were supposedly regulated by Westminster’s ministers and followed the rest of the worlds financial lemmings off the cliff – all a product of the greed in the City and incompetence of government regulation.

            Think before you talk such rubbish in future.

          • Jambo

            The banks (RBS and HBOS) were based in Scotland, and in fact the divisions that went spectacularly awry had a particularly Scottish financial-mafia (read incompetent) bent … Peter Cummings anyone?

            These banks were, and are, far more Scottish than HSBC, Lloyds etc.

            Shareholders are invariably partially sighted. They do not run major institutions’ day to day operations.

            The regulatory regime was designed and overseen by the number competent Scot himself – G.Brown esq.

    • the remainder of the uk would certainly own the majority of the assets in scotland i.e the subs and hardware but not faslane itself which is scottish territory that`s like saying we would own 9.9% of plymouth e.t.c.

  • Gordon maybe you could include this link in your article?

    http://www.publications.parliament.uk/pa/cm201011/cmselect/cmdfence/writev/761/m29.htm

    2. UK DEFENCE SPENDING IN NATIONS AND REGIONS

    2.2 Defence Spending in Scotland

    The UK Ministry of Defence has confirmed in a series of Parliamentary Answers [1] that there is a significant and widening structural defence under spend in Scotland. This is the gap between Scotland’s population share of spending and the amount actually spent in Scotland:

    · The under spend in Scotland increased from £749m in 2002-03 to £1.259bn in 2007-2008, which represents a 68% increase in 6 years.

    · Between 2002-2008 the under spend in Scotland has totalled a mammoth £5.622bn

    · During 2005-2008 there was a drastic real terms year on year decline in defence spending in Scotland – in total the last UK Government slashed defence spending by £150m in these years.

  • An excellent post. I for one would feel safer in an independent Scotland, with a dedicated navy and air force that I knew were patrolling around Scotland. What we have now is the odd ship taking a day to reach a patrol situation in the North, such as the 2011 Russian Aircraft Carrier sheltering from a storm. Since there is no way British nukes can be fired without US approval, they do not fulfill any rapid response need. Much of our dwindling fleet of ships and planes are diverted to places near the Gulf, where the majority of both Brits and Scots don’t see a need.

    It has long been my understanding that the first role of government is to ensure “defense of the Realm”. This means not spreading resources too thinly, or using up expensive smart bombs in dubious flash points in the middle east. We are too poor these days to act as a world player for peace. Instead Scotland has the opportunity to set an example for the UK that things will be just fine without nukes, as long as conventional forces are maintained, and used wisely in accordance with the wishes of the majority. We have plenty battle honours and a long military tradition that is the envy of the world, and a good spread of airfield and port facilities to do the job. As for the army, I don’t think anyone would doubt Scotland has the required regiments.

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