U.K. Lawmakers Say Independent Scotland Threatens Defense Jobs

Scotland could put as many as 15,000 defense-industry jobs in jeopardy if it chooses to break with the U.K., according to a report by lawmakers.

“The impact of separation upon the Scottish defense industry will be substantial and distinctly negative,” the House of Commons’ cross-party Scottish Affairs Committee said in a report published today. “We have been unable to identify any defense supplier or product which will benefit from separation and a large number which will suffer.”

The report comes a week after U.K. Prime Minister David Cameron traveled north of the border to emphasize the benefits of defense jobs before a vote in late 2014 on whether Scotland should become independent from the rest of Britain. The Scottish National Party, which is campaigning for a split, called the report propaganda for those opposing independence.

The defense industry contributes as much as 2 billion pounds ($3.07 billion) a year to the Scottish economy, the report said. That would be at risk because the research budget for an independent Scotland would be less than 10 percent of the U.K.’s 400 million pounds and the 2.5 billion-pound defense budget would represent 6.5 percent of the U.K.’s, according to the report.

Companies in Scotland could lose exclusive contracts with the U.K.’s armed forces and access to secret technology if separation occurred, shrinking the market, the report said.

BAE Systems Plc (BA/) and Thales SA (HO) were among companies visited by lawmakers compiling the report. Britain’s submarine-based nuclear arsenal is also based in the west of Scotland.

The Scottish National Party said the report omitted key evidence. Scottish taxpayers now contribute more to the U.K.’s defense budget than they get back and Scotland has been particularly hurt by U.K. defense cuts, Angus Robertson, the SNP’s defense spokesman, said in a statement.

To contact the reporter on this story: Simon Kennedy London at Skennedy4@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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