Scotland's first miinister Alex Salmond
Scotland's first miinister Alex Salmond

Senior figures at the Ministry of Defence are putting pressure on defence companies to intervene in the Scottish independence debate, urging executives to highlight potential job losses and disruption if Scotland splits from the UK.

One of the MoD’s most senior officials told the Financial Times that a vote for independence raised “huge questions” for Scotland’s £1.8bn defence industry, calling for companies to enter the debate.

Philip Dunne, minister for defence equipment, said: “I would like to see the defence industry in Scotland being a bit more upfront in explaining their concerns to their workforce and the people in Scotland and I urge them to do that at every opportunity.”

His intervention came after several senior defence executives told the FT that they were being urged by ministers and other senior officials to highlight the negative consequences of a yes vote for Scotland’s defence sector, which supports up to 15,000 jobs, in the run-up to September’s referendum.

The UK government decision to put pressure on companies to speak out against independence suggests deepening anxiety about the result of Scotland’s referendum in September on whether to leave the UK. While polls consistently show nationalists well short of a majority, they also suggest that support for independence has grown.

On Tuesday, BP chief executive Bob Dudley became the highest profile business leader to warn of the consequences of a split, saying the North Sea oil industry faced “big uncertainties”, particularly on future currency questions.

The future of Scotland’s £1.8bn defence sector is an important referendum battleground, with London warning that leaving the UK could cost thousands of jobs but the Scottish government says it expects cross-border procurement to keep the sector secure after independence.

A spokesperson for Alex Salmond, Scotland’s first minister, said: “These are damning revelations about the behaviour of UK ministers, who now have very serious questions to answer about what appear to be attempts to intimidate and bully leading companies which depend on MoD orders and contracts.”

The spokesperson said: “Independence will offer great opportunities for companies in all sectors and it is to the credit of the companies involved here that they resisted the pressure they were put under by Tory and Lib Dem ministers.”

One senior defence executive said UK officials were making “deft use of the dark arts” in pushing the industry to speak out on independence. “Government ministers have been quite energetically telling us, both openly and quietly, that it is important this information is out there,” the executive said.

Another defence executive said: “The cabinet would like us to be more vocal [in saying] that this would be a bad thing.”

The defence industry has so far resisted pressure to engage in the independence debate.

But some senior defence executives at companies with a presence in Scotland said independence would cause trouble for their operations, especially those involving the supply of sensitive equipment to the MoD.

“My concern is that if I am building a next-generation piece of defence equipment, will the UK government put money into it if it is in Scotland?” one executive said.

The defence industry generates annual sales of £1.8bn in Scotland, according to the Scottish affairs committee and the industry supports 12,000-15,000 jobs, directly and indirectly, through prime contractors, such as BAE Systems, Raytheon, Rolls-Royce, Thales, Selex Galileo and Babcock Marine and a long tail of smaller suppliers.

BAE announced in November that it would consolidate its naval shipbuilding at two Scottish yards on the Clyde, closing its only yard in England for building new naval vessels.

Scottish National party leaders say that after independence they would expect to continue developing and buying new warships jointly with the remaining UK, starting with the planned acquisition of Type 26 frigates.

However, UK ministers have said there is no guarantee that the Type 26s would be built in Scotland if it voted to leave the UK in September.

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