Scottish Affairs Committee
Oral evidence: Securing Scotland’s future: Defence skills and jobs, HC 165
Tuesday 9 June 2026
Ordered by the House of Commons to be published on 9 June 2026.
Watch the meeting
Members present: Patricia Ferguson (Chair); Maureen Burke; Harriet Cross; Dave Doogan; Lillian Jones; Mr Angus MacDonald; Douglas McAllister; Kirsteen Sullivan.
Questions 134 - 160
Witness
I: The Rt Hon. the Lord Robertson of Port Ellen KT.
Witness: Lord Robertson of Port Ellen.
Q134 Chair: Welcome to this meeting of the Scottish Affairs Select Committee, where we are looking at defence. We are delighted to have Lord Robertson of Port Ellen, to give him his full title, with us this afternoon to help us with that.
Can I ask you first about the strategic defence review, Lord Robertson? You co-authored that, as we know, and that sets out the plans for defence and the ambition that it should act as an engine for growth. To what extent is that ambition achievable in Scotland? What are the main barriers to that ambition?
Lord Robertson of Port Ellen: I was asked to come and lead this independent review. The primary role of the strategic defence review was basically to see how we could make the country safe and how we could build war readiness as a deterrent against any potential adversary or peer adversary. We thought it might take 10 years to develop.
It was a transformative review designed essentially to do that, but at the same time, we recognised that defence is inevitably a growth engine. The more that is invested in it, the more can be produced. As it stands at the moment, there are huge numbers of jobs. About half a million jobs in the country as a whole are involved with the defence industry, and indeed the supply chain.
In Scotland, where you have centres like Faslane, Thales, Leonardo and plenty of others in the community, clearly there are opportunities here for both building defence and building deterrence, which is crucial, but at the same time harvesting a degree of growth.
For example, I just found a statistic the other day about one of the companies, Leonardo. It used to be called Finmeccanica and now it is called Leonardo. Across the United Kingdom, Leonardo works with nearly 1,700 suppliers, 75% of which are SMEs. That is just one company, and it is a very important company in the Scottish economy on the outskirts of Edinburgh. It has gone through a whole variety of ownerships, but it is essentially doing the same thing, which is building advanced radars for aircraft and advanced avionics.
The primary job of our defence review was to look at every aspect of defence. We did that, and we put out a series of questions, as you do in the Committee, to society as a whole, to think-tanks and to academic life. We got 9,000 responses; some of them were quite weighty ones as well. We used artificial intelligence to sort it out; otherwise, we would still be reading the stuff today. Then we had an unprecedented consultation as well, with a review and challenge process, with experts brought in. About 150 experts were all brought in to look at all of the material that we had.
The idea was that, in this country, we have to very quickly rebuild war readiness in order to be able to deter the kind of peer competitor that we are now seeing in reality on the other side of Europe. At the same time as building that, growth comes from it. Ronald Reagan famously made huge investments in the defence and technical industry in the United States, which kickstarted Silicon Valley and a whole series of growth projects.
There are two elements here. One is building war readiness in order to prevent war, but at the same time it is building the economy, and especially the supply chain, in order to create jobs and growth as well.
Q135 Chair: Obviously, this is the Scottish Affairs Committee, so we are particularly interested in what is happening in Scotland. I am conscious that the defence review mentions Scotland twice, and not really on its own. I wondered whether that review gives sufficient recognition to Scotland’s industrial and strategic role in the UK and in the defence sector particularly.
Lord Robertson of Port Ellen: As you can imagine, I was the lead reviewer, so Scotland is not going to be ignored. The potential for Scotland is unlikely to be ignored as long as I am the lead reviewer.
We are talking about the defence of the United Kingdom, so there is an inevitability about the way in which we look at the whole of the landscape, but in section 4.2 of the review we talk about the engine of growth and the way of reforming our procurement policies in order to create it. That was then followed by the defence industrial strategy. In that context, there is much more in the way of comment about the growth areas that the Government see as being part of it.
The strategic defence review is dealing with basically reordering, reorganising and transforming the way we do defence. The industrial policy followed that. That is a government statement, and it might be that later this week we will get the defence investment plan that will put even more flesh on the bones.
We used the example in the defence review of the area around Barrow. I know it is not in Scotland, but it is north of the home counties. They happen to be manufacturing submarines in Barrow as well; it is seen as being part of a pilot project. In fact, the chair of the Barrow development corporation or initiative is Lord Simon Case, who used to be Cabinet Secretary. We used that as an example of an area where there is a lot of defence activity going on that can actually be expanded and grow as well.
We did not deal with Scotland in our report; we dealt with Barrow as an exemplar of where it might be, but the defence industrial strategy goes into much more detail about the way in which these centres of defence can be promoted into giving an overall growth position.
I know for myself how important defence is to Scotland and how many skills are involved in the various companies that are involved in it. It clearly was going to be another example of where a lot can be done in order to produce growth and, at the same time, rebuild the deterrent effect that we wanted.
Q136 Lillian Jones: Lord Robertson, within this strategic defence review there were 62 recommendations. I am wondering if there were any specifically for Scotland. Could you name them, and are they being progressed?
Lord Robertson of Port Ellen: No, there were not any in the review. As I say, there are two aspects here. One is the review itself, which is designed to transform the way that we do defence. The 62 recommendations cover pretty well everything that we have to do. It has to do with the integrated force, the people policy, the training policy and the way we educate, as well as reforming and reorganising the procurement process in order to pick up and harvest new ideas and innovation that will come along.
We did our job. That was our job, and the Government then followed up with the defence industrial strategy, and they will follow up with the defence investment plan in order to do that. Scotland will be dealt with much more in terms of the defence industrial strategy than it would be with us reorganising the way in which we do defence.
Q137 Harriet Cross: In the strategic defence review, there was a section on maritime security, particularly cables and pipelines. Over the weekend, there was a report out saying that the Navy now spends a third of its time particularly focusing on Russian threats. How protected or otherwise do you feel the UK is? Particularly from Scotland’s context, where a lot of these come in to land, do you think Scotland is particularly exposed to these threats or would the impact of that be a UK-wide threat and not necessarily a localised one?
Lord Robertson of Port Ellen: We are very vulnerable as a nation as a whole but, as you rightly say, a lot of the undersea cables land in Scotland, which makes us particularly vulnerable to that, and 99% of all the data that we use in this country comes in undersea cables. That really is quite a considerable vulnerability and sensitivity. We know that Russia and other malign actors are mapping these undersea cables. They are putting sensors on the seabed as well in order to track what is going on.
Therefore, it makes it much more important that, in Scotland and other parts of the country, we are aware of these vulnerabilities. Critical national infrastructure in the nation as a whole is on a knife edge. Our electricity supply, our telecoms and our water supply are all on a knife edge, because over the years we have gone for just in time and all of these fancy management things that proved to be so open to abuse during the pandemic. Some of these undersea cables are quite old, but a lot of them are very new and only recently down there. We cannot underestimate the fact that they provide communications with the rest of the world.
In that respect, Scotland has a particular role to play. We have more coastline than the rest of the country. I used to live in Dunoon in Argyll. The coastline of Argyll is the equivalent of the distance from Glasgow to New York. It is one of the most useless statistics that I have learned in my life, but there you go.
Chair: It is an interesting one. I am sure at least one of us will throw it out somewhere in the future.
Q138 Dave Doogan: Lord Robertson, you said that defence spending increases are urgent. You have said that in crystal clear terms. You have said that delivery of those increases in expenditure for defence have been too slow. How does that affect primes and their subcontractors in Scotland? This money is going into orders for further equipment once it becomes available. How does this enduring delay affect defence manufacturers in Scotland?
Lord Robertson of Port Ellen: There has been a bit of a delay. It is only a year and a week since the strategic defence review was published. There has been a delay in the publication of the defence investment plan. In the great scope of things, that is not huge, but it has had an effect on the defence industry. There is no doubt about that.
While I was sitting in the corridor, a defence manufacturer came along just to say that they need the clarity that comes from the defence investment plan and the way in which we are doing it. That will come and that will happen, but what industry wants and what it says in the review is a constant drumbeat of orders that are there.
From the point of view of the military, it is not good if you stop using something. Let us say the C-17; that is the huge transport plane that Boeing manufactured. In my time, the British MOD rented the first ones and bought eventually. Boeing does not produce C-17s anymore because nobody was ordering them, so they stopped ordering them. Then the world changes, and now we are in a completely different world with what is going on, especially in the Middle East but also in Ukraine.
From the point of view of the military, you have to make sure that there are going to be supplies and stocks that are available when the circumstances change. Also, the industry itself needs to have that regularity of orders, or else they stop producing as well.
Q139 Dave Doogan: I am sure that, in all reality, that is not lost on officials within the MOD. I know for a fact that it is not lost on Ministers in the Department as well. The Government are trying very hard to close the £28 billion gap. What would your assessment be of how they are going about that? Do you think that they are going about it the right way? Are they making sufficient progress at sufficient pace to get that money in position to generate the very orders that you were just talking about?
Lord Robertson of Port Ellen: We will see maybe later this week. I do not know whether the defence investment plan is going to be produced this week, but judging by the number of requests that I have for press interviews at the end of the week, it tends to suggest that somebody thinks it is going to happen on Thursday of this week. We will see at that point how much the Government are able to devote to defence.
The £28 billion that you talked about appears to be a figure that some of the chiefs believe is what is lacking in order to fully fulfil what the country needs at the moment and what the defence review suggests. There are other figures around of £18 billion or £15 billion; we will see. All of that will have a knock-on effect on the industry as well, from the primes right down through the supply chain.
There has been a bit of hiatus as this Government have had to find money. The Scottish Government will eventually have to balance the books as well. In fact, it is obliged to balance the books, and it will have to have some tough choices and trade-offs that will be required to be made. That has taken a bit of time. In my view, it has taken too long, but maybe by the end of the week we will find out what the conclusion is.
Q140 Dave Doogan: Those are the fiscal considerations, but what about the strategic considerations? This difficulty that the UK is having funding its defence ambitions will of course not be lost on those who would seek to do us harm.
Lord Robertson of Port Ellen: No. They are watching very carefully. We made the estimation in the defence review that we would not have to face a peer competitor in a military conflict for a decade. Now NATO says that we could be facing an armed attack on the alliance by the end of the decade. The end of the decade is only three years away, so the timescales have been reduced. Our review was designed to allow for acceleration and amplification depending on the circumstances and the money that was available at the time.
There is a whole series of things that need to be done. It is all very well talking about money. Money is only one aspect. You can say, “Right, we are going to spend X amount of money”, but if you do not have the skilled manpower, the tooling, the cranes and the industrial capability, you can have all the money available to you and you still cannot translate that into the actual defence equipment.
One of the things that we pointed out about Barrow and the Barrow experience is that we have to produce a pipeline of trained people. Welders are the key element, especially in shipbuilding but in most fabrications, and that is an aspect in Scotland where there is a serious shortage of welders. I do not want to make any particular political point, but the previous attitude of the Scottish Government, which said that they were not going to support any activity to do with munitions, was very shortsighted, given the value of the defence industry in Scotland. The welding academy that was floated as a Scottish national resource is something that should have had full backing from the Scottish Administration.
Q141 Dave Doogan: We might take a different view on that, but I totally accept the thrust of what you are saying. I am glad that you acknowledge that that was a former position.
Lord Robertson of Port Ellen: I hope it was. There are indications that the policy was changing as well.
The country has to be defended. The reality is that the threat to our liberty, our freedom and our way of life is no longer theoretical. It may have been during the period of the cold war when the Soviet Union was there, but we see vividly every day in reality what is happening in the streets of eastern Ukraine. The country needs to be defended.
I have constantly made the speech. Occasionally, I make it in the House of Lords, which is like speaking off the record, it has to be said. I spoke the week before last, saying that we are underprepared, underinsured and under attack, and the country is not safe. That is the simple message of our defence review. Therefore, if we are going to be safe and we are going to have the warfighting readiness that alone will stop anybody from attacking us and any aggression against us, we need to move and we need to move fast.
The side-by-side effect will be growth, because that investment will also produce jobs and dividends. The main thing is to make sure that the country is safe. Therefore all of us, whoever we are, whether devolved Administrations or local councils, or even local education authorities and schools, have to recognise that it is a whole-of-Government and a whole-of-nation approach.
People should look at Finland. Finland is the ideal example, next door to Russia, where everybody knows their role. Every single individual knows their role. Every organisation and every company knows what they need to do. We need to do that as well, because we are very vulnerable and we are under attack.
Q142 Lillian Jones: Lord Robertson, you said that we are underprepared, underinsured and under attack, and you mentioned Finland. Do you believe that UK society is clueless in terms of how underprepared, underinsured and under attack we are, given the threats in the North Atlantic? Also, we can say that our frontline is in Ukraine. What happens if Ukraine falls? Does the normal person in the street understand that?
Lord Robertson of Port Ellen: I would not say “ignorant”; I would say “uninformed”, which is why, when we published the report, the Prime Minister promised to have a national conversation about defence and security. I am told, unofficially, that there is a plan to do a national conversation, which will come after the defence investment plan comes out. We all have an obligation to do that. It has to be led from the top. It has to be led by the Government, but we all have a role to play.
I use the example of a speech I gave in Wigtown last October; it was in October or November last year. Wigtown in the south-west of Scotland had a book festival, and I was invited to come and speak. I was there on a very windy, blustery night in a church; 400 people had paid money to come and hear me speak. I pointed out to the 400 people who were there, “How many of you have candles at home? How many of you have a live torch in every room in the house? How many of you have a wind-up radio? Otherwise, how are you going to know what is going on outside? How many of you have cash? Without electricity, the ATMs will not work”.
Anyway, I got the usual ribald comments in the weeks after that—“I bought my candles” and the rest of it—but the point that I make is that that was on the Friday night. By the Tuesday, there were still 25,000 households in Scotland without power that had had to survive from Friday until the Tuesday without power. They were actually listening to what I was saying.
In September of last year, Spain and Portugal had an outage. They called it “the outage”. Nobody knows why it happened. It was supposed to be a surplus of renewable energy, but suddenly the traffic lights went out. The ATMs closed down. People could not tap money at all. We had a vivid example of what can happen.
The whole-of-nation approach is not simply about a military emergency, which might come. It is about being nationally prepared and nationally resilient as well. Resilience in the community is going to be important.
As I said in the debate in the Lords, when the lights go out, the traffic lights stop, the hospitals close and the data centres stop because the air conditioning has gone off, the public are going to say to all of us, “Why did you not do something about it?”, when we know how fragile the critical national infrastructure is.
It is imperative that we get the message over to people that the danger is not some sort of Russian tank coming across North Germany. It can be much closer to home and it can be much more real for people. Down the line, it could mean what the poor people of eastern Ukraine are now suffering. They were ordinary people in ordinary streets until they suddenly were not. They are under Russian occupation today.
Q143 Douglas McAllister: Lord Robertson, can I bring you back to the delayed defence investment plan? By any view, it has been significantly delayed. We had all anticipated that that would be published by November last year, so it is significantly delayed. There is a suggestion that perhaps we will see that towards the end of this week, Lord Robertson.
One company, Aeralis, cited the delay in that publication as one of the contributing factors as to why it collapsed. You have touched on the risks of that in your evidence earlier. The industry really requires that certainty of orders; you described it as that drumbeat of orders. What other risks are posed by the delay?
Perhaps more significantly, you have been there; you have been the Defence Minister. Using your wealth of experience, why do you think it was delayed? What have been the barriers to releasing this beyond the UK Government saying, “We have to get this right”?
Lord Robertson of Port Ellen: It is an argument with the Treasury. I had it. It is not unusual. Even local authorities have somebody who is in charge of finance, and they are usually pretty tough. The Scottish Government have got it just now, and they are going to have it even more in the future.
There is no doubt at all that the Treasury has held back. It has a particular view about defence wasting money and not contributing to growth in the economy. This is not new. That has to be overcome. We had a very senior Treasury official as part of our team, so we tried to make sure that we had covered most of the areas. It is really a question for Ministers rather than for an ex-Minister to answer, because I regret as much as anybody the fact that we do not have the decision ultimately as to what the money is going to be.
Out of that will come a whole series of other changes that will take place, and therefore the building of the three munitions factories that John Healey promised when the review came out, the extra submarines that will be built at Barrow, and some of them for the Australians under the AUKUS agreement. A lot of things will follow on from the defence investment plan.
I had to deal with Gordon Brown in my day. I know that this is televised; I do not know whether anybody ever watches these Select Committees, although I did meet two guys in Bowmore in Islay a couple of weeks ago who watch them all the time. I had a big argument with Gordon Brown at the time. We did our strategic defence review in 1998, and he tried to get money from my budget. John Reid, John Spellar and I went to see Tony Blair and said that we would resign if that money was taken out of our budget at that time, so we kept the money in the budget. I know that Gordon Brown is also now saying that more should be spent on defence. I pointed out to him what he did to me and he said, “That was then; this is now”. We shall see.
I agree with you that the delay is not good for defence and the defence industry but, in the great scope of things, a year’s delay is not the worst possible thing. It looks as though we are now getting to a conclusion.
Q144 Douglas McAllister: Who do you think has won the argument, then, between John Healey and Rachel Reeves?
Lord Robertson of Port Ellen: We will find out when the defence investment plan is published. My guess would be that there will be a compromise along the line.
Douglas McAllister: It will be a classic compromise.
Lord Robertson of Port Ellen: Presumably the Prime Minister, as First Lord of the Treasury, will have had the final say.
Chair: This makes me think your memoirs are going to be good, Lord Robertson.
Q145 Lillian Jones: Lord Robertson, what would you like to see included in the defence investment plan?
Lord Robertson of Port Ellen: I would like to see extra money for a lot of the things that are out of sight in defence. There is a measurement that some people have about the number of planes, tanks and ships that we have, but they are only the top level. As the air marshal, your special adviser, will tell you, you cannot get your jet planes to fly simply with a pilot. There is a tail of logistics that is involved in supplying all of the equipment in order to make sure that the planes fly, the ships sail and the tanks move. Why is it today that we have eight attack submarines and none of them apparently is at sea? That has to do with 14 years, basically, of neglect of the supply chain and the infrastructure that is involved.
We need to invest in training. We need to invest in logistics and what is called combat support and combat service support. We had a big section in the report about medics. If we were involved in a war like the war in Ukraine, we could not take casualties, because we do not have the capability at the moment.
There is a rebuilding going on. The 62 recommendations in our review are now being implemented bit by bit. Quite a substantial number of them are already being implemented. One of them is on the defence medical side. Consider the number of casualties that Russia and Ukraine are facing at the present moment. These are nightmare figures. Sometimes 1,000 people are killed or seriously injured every day there. You need to have that military medical back-up capability in order to be able to deal with that kind of thing.
I would hope that we would be able to plough a degree of money into a lot of that background material. It will not appear in the big-ticket items, but it is essential for making sure that the planes fly and the ships sail.
When I was appointed to be the lead reviewer, my nephew sent me an email saying, “More ships, more tanks, more planes. Job done”. A lot of people in the country think that that is what we are lacking. Actually, it is the means of making sure that all of them work. That is what the defence review says, eloquently and in detail.
I ask you to read it. It is worth reading and it is readable, unlike most Ministry of Defence publications filled with acronyms and technicalities. We designed this review to be read by normal and non-expert people as well.
Q146 Chair: Lord Robertson, the Stockholm International Peace Research Institute, as I understand it, has suggested that UK military spending fell by 2% between 2024 and 2025. That being a given, what opportunities do you see for Scotland in the current defence environment, given that decrease in real terms?
Lord Robertson of Port Ellen: Since the present Government came into power, they have increased defence expenditure by the biggest amount since the cold war. That may not represent a huge amount because budgets were going down all of that time, but they have increased it and have now pledged that, by next year, we will be on 2.6% of GNP. That is quite a substantial increase on the 2.3% that we have at the present moment.
All of the Governments in NATO are committed to going up to 3.5% by 2035. That is almost meaningless when you talk about percentages of GNP, but it is about £30 billion extra on top of the £70 billion that is presently spent on defence. These are eyewatering figures that the country will have to spend if it is going to get up to the standard that NATO has agreed and that all of the Prime Ministers and Presidents agreed at the Hague summit.
Q147 Chair: There is a phrase that our current defence funding is being somehow used as an overdraft to cover existing financial shortfalls rather than to improve military capability. Is that one that you would agree with?
Lord Robertson of Port Ellen: There are certain things that need to be done in order to repair the neglect of previous years, but there are also new aspects. The defence review goes into that in some detail. We have to learn the lessons that are being learned painfully every day in Ukraine. Network-centric defence is going to be the way forward. The creation of these networks will involve overhead drones, undersea drones, military aircraft and missiles. All of these need to be brought together inside a digital targeting web, bringing together all four services.
John Healey has been involved in defence reform, which is creating a new organisation that will then deliver the strategic defence review. For example, the Chief of the Defence Staff is now in charge of the budget of the Ministry of Defence. That was not something that happened before. I was not entirely aware of that myself when I was Defence Secretary, but he is basically the chairman of the chiefs and not the actual overlord, whereas now that is the case. Air Chief Marshal Knighton is now in charge of the totality of the military budget and can allocate it depending upon the priorities that he believes in.
There are new aspects of defence where we are going to have to invest if we are going to be ready for the future. Drones were an idea in the back of somebody’s mind in my day in the Ministry of Defence. They are now fully central. Last weekend, drones from Ukraine humiliated Vladimir Putin in his home city of St Petersburg. A quite remarkable and dramatic attack there brought home the war to the most northern part of the Russian Federation. It was drones that did that. We now have to fit into that. Although drones are not the totality of the answer, we have to make the investment in that as well.
Q148 Chair: Former Air Marshal Edward Stringer made an assessment where he said that there was a gap between saying and doing, or between the Government’s defence commitments and the actual delivery. Is that an assessment you would agree with?
Lord Robertson of Port Ellen: I know Ed Stringer well and I read the document before he published it. There is a lot in it. As a country, we talk a big game and we do not deliver as much as we sometimes say.
I recently got a lot of publicity for saying there was a corrosive complacency. The Financial Times said that I was directing it at the Government, but I was directing it at all of the parties. My first meeting with the Liberal Democrats was last week, when I wrote the letter offering a briefing last December. Only today I got the reply from Reform UK saying that they were more than willing to do it. I have yet to write to the SNP.
Dave Doogan: We will take it up.
Lord Robertson of Port Ellen: I am sure you will. There is a degree of complacency around with all of this. Hopefully now, at this stage, we are going to move forward from that, both with the defence investment plan and a national conversation. We might manage to wake up the country to what needs to be done.
Chair: Thank you. On that note, we have a supplementary question from Dave Doogan.
Q149 Dave Doogan: The Government take credit for the largest increase in defence spending since the end of the cold war, and perhaps with some objective merit. It is a fact, but in terms of the threat horizon, there is a reason budgets were falling at the end of the cold war. A much more cogent comparison would be before the end of the cold war and during the cold war, when we were facing significant threats from a well-equipped adversary. In those environments, defence budgets were regularly and sometimes substantially in excess of 5% of GDP.
There is only limited comfort, is there not, in celebrating that this is the largest increase in defence expenditure since the end of the cold war, because that is much less relevant than prior to the end of the cold war, in terms of the cost of defending our liberty?
Lord Robertson of Port Ellen: It might be, but we went through a period that people say was a holiday from history. We thought that the end of the cold war brought about a new relationship.
Q150 Dave Doogan: That was Francis Fukuyama.
Lord Robertson of Port Ellen: Yes. Saying that it was an end to history was exaggerating the point.
Anyway, at that time I dealt with Vladimir Putin. I met him nine times during my time as Secretary General and I got on extremely well with him. We formed a bond. I chaired the NATO-Russia Council with 20 Presidents and Prime Ministers sitting around the table, including Vladimir Putin, George W Bush, President Chirac and Tony Blair. It was a day when even Vladimir Putin cracked a joke around the table. We thought it was the opening of a new dawn, but we were to be sadly disappointed, because Vladimir Putin changed during the period after that into something very different and somebody hostile to the peace and security that he was talking about.
We were all resting on our laurels at that time. Now we have a wake-up call and we have to do something about it. I cannot help but say that there are some political parties who do not believe in defence at all. That has created a degree of animosity towards the armed forces and towards recruitment in society as a whole. There are elements in my party who are pacifists by nature and have a different view to the one that I have taken. Your party, in its hostility to Trident and to the independent nuclear deterrent, which is something that moves the needle inside the Kremlin, has not helped with the general debate about it either.
We have to adapt to the new world. That is what the strategic defence review does. We did so much research and interrogation, and so much in the way of consultation. We believe that this is the model to intimidate our enemies, inspire our friends and make the country much better than it is. It is locking industry into what the military and political thinking is, and then making the country a lot safer than it is just now.
Q151 Mr MacDonald: This seems rather a petty question compared to the potential national emergency of our defence. We learned earlier on in this inquiry that the south-west of England gets a substantially larger amount of defence spend than the rest of the UK. Scotland only gets two-thirds of its proportional spend of the defence spend. We understand that SMEs in Britain, and indeed in Scotland, do not get anything like as much spend as they could do. It is kept together by the major companies. I understand that in the United States they have a specific requirement for the major defence companies to spend with local and smaller companies. Do you think we could utilise our SMEs much better in our defence sector?
Lord Robertson of Port Ellen: Defence should not be seen as a geographic bonus. The American system, which is known as pork barrel politics, earmarking and the rest of it, means that they have an overinflated defence budget as a consequence of that. Many experts will tell you that America needs to be slimmed down. It needs to do the kind of review that we have just done, and then to carry it out.
We have to see defence as a whole-of-country approach to things. Scotland does well in some areas and less well in other areas. The Army has tended to be based south of the border, but we have the main nuclear and submarine base at Faslane. We have a lot of other things. Air Vice-Marshal Paterson will tell you about the north of Scotland and the Moray coast, and the jobs and wealth generated by the air force in that area, and Leuchars and the rest of it as well.
We need to look at it not just in a regional way. The defence industrial plan says that we can build these clusters. Barrow went from a labour force of 4,000 at the lowest point of submarine production up to something like 17,000 people now employed in the shipyard itself, never mind in the surrounding areas. These clusters can be magnified and multiplied in various parts of the country.
Mr MacDonald: I just do not think that there is any defence manufacturing that happens north of the central belt. In my opinion, it would make an enormous difference to parts of Scotland that are pretty unviable commercially. That does not need an answer.
Q152 Harriet Cross: Private investment is obviously just as important as public investment. The Government are keen to leverage as much of this as possible. How do you see that going? Are there opportunities to get more private investment in? Do you have an estimation of the figures we would be looking at? From my understanding from the SDR, it was about £28 billion that we were looking for. The DIP is proposing somewhere between £15 billion and £18 billion. It is a big chunk of private investment that we are going to have to look to get in.
Lord Robertson of Port Ellen: Some of the areas, such as infrastructure, which has been neglected for a very long period of time, need private investment. Therefore, providing a mechanism that will allow private investors to come into the defence field with the collateral of Government behind it is clearly a priority. Whatever is in the defence investment plan is to do with public money or government money, but it can be used to leverage a lot of other private capital that is out there.
Some of the funds that we are talking about are wanting to invest in defence. It is a sad by-product of the troubled world that we live in that defence companies now see opportunities that they did not see before; that is part of the reality of the conflict that is now spreading in the world today. They are talking about trillions of pounds of potential investment. I recently met some bankers. I will not mention who they are, but they have $1.5 trillion to invest in defence and want projects that can help that. My colleague Richard Barrons, who after the review has been heavily involved with the City of London, has been producing for John Healey a plan of how the private sector can be involved in it.
It was pointed out to me recently that the Battle of Waterloo, which we won, if you remember, was paid for by advances made by the City of London. It was almost a hire purchase. The Duke of Wellington was campaigning at that time. The model is not new. The gilt market was created at that time in order to lend money in order to fight these wars. In modern days, there are opportunities for the private sector to get involved in defence, and it should be encouraged to do so.
Q153 Harriet Cross: Finally, are there any limitations or concerns about relying on private funding for defence?
Lord Robertson of Port Ellen: No, as long as what it is used for is not impinging upon military effectiveness. One of the things I did when I was Defence Secretary, carried out by John Reid under me, was to create the new senior command and staff college at Shrivenham. That was built privately, through a private-public partnership. It was done on time and on budget. In fact, I came to see it when I was Secretary General of NATO, and they would not allow me on the site because the deadline for completing it was going to be affected by too many VIP Ministers coming there.
That defence college, teaching all of the most senior military, is privately owned but operated by the Army. Even the teaching was contracted out to Cranfield University. That allowed the military to simply focus on what they needed to focus on as part of military effectiveness. There is no reason why we cannot separate out ownership of capabilities from the operational side of things.
Q154 Mr MacDonald: Lord Robertson, it has been proposed, not least by my party, that they should issue £20 billion of defence bonds as a way of funding defence. Do you think that is viable?
Lord Robertson of Port Ellen: The problem with defence bonds is that they come out of borrowing as well. As I was reminded this morning by somebody, we spend £120 billion a year on interest on our borrowings. The Chancellor’s view is that defence bonds, which might be quite a good idea, also add to the borrowing requirement and therefore the repayment as well.
Other people thought about it before the Liberal Democrats, but I listened to the leader of your party last week and he made a very eloquent case. If he persuades the Treasury, so much the better.
Q155 Dave Doogan: Lord Robertson, I just wanted to get your take on this. You are, of course, right that it is an ancient historical practice that regimes will borrow to fund wars. That is not new, but your lenders will take a look at your fundamentals before they make that decision to lend.
We have a difficult situation just now, as a function of that £120 billion annually is that we are hovering around 100% debt to GDP, which is a challenging place to be if you are looking for another big swathe of borrowing to fund some sort of military or defence crisis. Is that not yet another symptom of a failure to take a whole-system approach to defence? Keeping more manageable levels of sovereign debt is not just good fiscal housekeeping; it is essential to our defence in time of need.
Lord Robertson of Port Ellen: The chairman before last of the Joint Chiefs of Staff in America said that the biggest threat to American security was the national debt. Of course, it has ballooned under the present President as well.
Yes, we need to keep it under control, but it depends on the underlying strength of your economy in order to be able to do things and to manage the debt burden. The Chancellor of the Exchequer and her predecessors have been able to do that up to now, but we have an unprecedented challenge at the moment in terms of national security, and we have to rise to that. That is where, as you say, the all-of-country approach is going to be crucially important. We need to harness every aspect of our society in order to make the country a lot safer than it is just now.
Q156 Maureen Burke: Lord Robertson, which areas of the defence industrial strategy have the UK Government delivered most effectively so far? Can you tell me where delivery has fallen short so far? What should the Government focus on next to address those gaps?
Lord Robertson of Port Ellen: I am not really the one to answer that question. You need to ask Ministers of the Crown; I am an ex-Minister. We did a review. Some of the things that were announced on the day in Glasgow were additional to what we had said. They followed on from what we had recommended. The extra munition factories and the question about the additional submarines were all there. The defence industrial plan is, of course, a supplement to what we did.
You would need to ask the Government. They proclaim that they have signed 1,700 contracts in the last year. Some of them are very big. The helicopter contract in Yeovil will be huge. The elements involved with GCAP, the sixth-generation fighter jet, are very substantial, but there are other ones that will be quite small. You should probably ask Government Ministers to answer that question rather than me.
Q157 Kirsteen Sullivan: Lord Robertson, you mentioned earlier that there has been a long-running issue around skills gaps and skills shortages in the defence sector. Clearly, there is huge ambition to bolster national security through defence, but do you think that we are potentially going to be in a situation where we are making huge commitments around defence without the workforce needed to meet those commitments?
Lord Robertson of Port Ellen: That is one of the problems. The bottlenecks will come with the skilled labour. John Healey is making a speech today at the GMB conference, pointing out that, by and large, defence expenditure is going to be spent on British jobs and British companies. That is a worthy objective, and I certainly agree with it, but it can only take place if the skilled labour force is actually available. At a time when artificial intelligence appears to be ruining an awful lot of other jobs, or demolishing them, maybe we should be telling people to get engaged and involved in this area.
If there are politicians around who denigrate the defence industry and make out that in some ways it is dirty or immoral, that does not exactly help with the supply of skilled labour that is going to be absolutely crucial if we develop the proper defence of this country. When I was sitting outside in the hall there was a gentleman, a senior executive of a company that has been the butt of large numbers of demonstrations by pro-Palestinian lobbyists who have been demonstrating about it. There are headwinds that are preventing the defence industry from recruiting and training the kind of people who will be required for the future and who would get really good jobs as a consequence.
Q158 Kirsteen Sullivan: Yes, indeed. We have heard evidence previously to that effect, Lord Robertson. How realistic do you think the Government’s plans are at the moment, given the workforce crisis that was identified as part of the strategic defence review?
Lord Robertson of Port Ellen: They are moving on elements in the defence review. The number of cadets in the three services has dramatically increased. That was a way in which we could reach out into society and also bring in the talented young people—the drone operators, the Xbox operators—who are going to be valuable for the future. There is an attempt to do that. As more of the review is implemented, more of that will happen.
Q159 Kirsteen Sullivan: If I can go on to ask you about the skills element—you will be aware that that is devolved—what role do you think that the UK Government should play in co-ordinating defence spending with skills policy in Scotland? You might also be aware of the offer that the UK Government made to the Scottish Government for £10 million of the defence growth deal funding to be used to create two defence technical excellence colleges, if the Scottish Government can provide matched funding. I just wanted your thoughts on that and how those colleges could be used to address some of the skills gaps.
Lord Robertson of Port Ellen: We need to do it for the defence of the country, but also in order to create the well-paid jobs that are going to be involved in that. It is a worthy objective to say that specialised colleges should be created in order that we can move into that high-tech area. In Ukraine we are seeing the ability to innovate on the spot, very quickly indeed, with drone manufacture and combatting electronic warfare. All of these things are being done. The more we can do in terms of education of our young people, especially in Scotland today, the better it will be for them and for the country, as well as for the defence of the nation.
Q160 Kirsteen Sullivan: What do you think that the UK Government could do most quickly to unlock investment in skills in Scotland?
Lord Robertson of Port Ellen: Implementing our review would be one good way of doing it. The defence and industrial policy has some good ideas involved in that. We looked at procurement, which has always been a problem in defence, with contracts that go on forever and do not produce the goods. The average was a six-year time gap between an idea being launched and the contract being paid. That is ludicrous in a world where things are moving so fast and so dramatically. We need to be able to move at that speed and make sure that Government are directing their attention to making sure that these skills are there and the training is right.
Chair: Lord Robertson, thank you very much for your contribution this afternoon. It has been extremely helpful to us. I have no doubt we will be reflecting some of your points back when we meet the Minister in a few weeks’ time. Thank you very much for your time this afternoon and for your contribution.