UK: Defence - February 2014

Last Updated: 28 February 2014
Article by James Woodward and Stuart Maclean

This bulletin focuses on elements of the paper entitled 'Scotland's Future - Your Guide to an Independent Scotland (also referred to as the 'White Paper').

"Within this [£2.5bn] budget allocation will be significant investment in procurement, which can support key Scottish industries, including the shipbuilding industry."1

"The Scottish Government will take forward the procurement of four new frigates, to be built on the Clyde, preferably through joint procurement with the rest of the UK."2

The Clyde shipyards are the current choice to build the UKs new Type 26 frigate. It is unclear whether the commitment of the Scottish Government to build frigates on the Clyde relates to this programme which would require the commitment of the UK Government to procure its shipbuilding from outside of the UK. In the event of a 'Yes' vote, it remains to be seen if the UK Government would require that such sipbuilding work be diverted from the Clyde to Portsmouth (assuming that Portsmouth would have the relevant capacity). In such a scenario, the question is whether Scotland could build its own frigates independently (noting lead times for design and associated procurement) and, in the event that this was viable, whether such a limited order could ensure the survival of the Clyde shipyards.

"Negotiations on the maintenance of shared capabilities would not include nuclear weapons. The Scottish Government would make early agreement on the speediest safe removal of nuclear weapons a priority. This would be with a view to the removal of Trident within the first term of a Scottish Parliament following independence."3

There are currently 6,700 personnel (military and civilian) employed at Her Majesty's Naval Base Clyde (HMNBC) with a further 1,500 posts to be created by 2022 according to the UK Government. The Scottish Government have stated that their plans to turn HMNBC into a joint forces headquarters and principal Scottish naval base would, following any transitional arrangements, create "a similar amount of military personnel, to be supported by a significant number of civilian personnel." The removal of nuclear weapons from the Clyde and the transformation of it from a submarine base into an all-purpose armed forces headquarters and naval base would undoubtedly take some considerable time with a large degree of uncertainty as to how this would be achieved or where such nuclear weapons and submarines would go. It is unclear during such time at what level employment would continue and what the resultant effect would be on the local economy. "The units of the Scottish Army will carry on the names, identities and traditions of Scotland's regiments, including those lost in the defence reorganisation of 2006."4 There were 6 original Scottish infantry regiments now amalgamated into the Royal Regiment of Scotland plus the Royal Scots Dragoon Guards (Challenger 2 tanks) and the Scots Guards. The initial projection of 3 infantry/marine "units" (size unknown) and no heavy armour does not equate to the Scottish recruited units of the British Army. The Royal Artillery does have two Scottish recruited regiments however recent changes in structure mean that these regiments also recruit on a much wider basis. One is equipped with heavy artillery which is not required in the proposed Scottish Army and the other, although deploying light artillery, is a mobile force deployed on Chinook helicopters which are not included within the assets of the proposed Scottish Army. The extraction of Scottish units from the British Army, does not therefore allow an immediate platform for the proposed Scottish Army and neither would a simple pro rata split of the assets of the British Army. It is therefore likely that there would be a substantial transitional period between independence and the creation of an effective defence force along the lines envisaged by the Scottish Government. This also assumes that the right equipment can be procured within the proposed budget and the right personnel recruited and trained to crew and maintain it. There is no detail on how either of these critical matters would be managed. It is also unclear what effect the disruption of any transitional period would have on the communities which are built around the current forces bases in Scotland.

"The Scottish Government would examine how the terms and conditions of service personnel could be improved, for example through the official representation of services personnel."5

Is this to suggest that in future Scottish Army soldiers would be represented by a union? The Scottish Air Force would initially consist of 12 typhoon jets, 6 hercules transporters and a helicopter squadron. It is not clear what helicopters would be involved. The training of pilots would be outsourced to allies but it is not clear how such complex aircraft as Typhoons would be maintained and supported in such limited numbers.

The Scottish Navy would initially consist of 2 of the Royal Navy's existing frigates four mine counter vessels, 2 offshore patrol vessels, 4 to 6 patrol boats and auxiliary support ships.

The biggest issue with the transfer of any of the above equipment from the UK is how it would be manned and supported. Would the right qualified individuals to properly man a Royal Navy Frigate transfer on day 1? As mentioned above, the creation of the proposed Scottish Defence Force in the form envisaged by the Scottish Government is subject to many unknowns and potential issues which would undoubtedly lead to a significant and, for the communities involved potentially damaging, transitional period (estimated by the Scottish Government to be 10 years for Faslane). At no point in the white paper is there any reference to what would undoubtedly be significant start-up costs of the Scottish Defence Force. Further, it should be noted that the majority of the procurement, training and logistical support needs of a Scottish Defence Force are unlikely to be sourced from within Scotland and therefore a substantial but unknown portion of any proposed defence budget would be spent in the wider UK or overseas. There is no detail in the White Paper with regard to this.

The decision to remove nuclear weapons from Scotland without any identifiable location in the rest of the UK to house them and support the submarine fleet would undoubtedly put the Scottish Government on a political collision course with close allies. This will have an immediate effect on NATO membership negotiations.

ITAR and List X

Related to the defence sector (as well as any sector dependent upon the use of UK or US restricted technology e.g. aerospace, space, security etc) but not covered in the White Paper is the ability of Scottish companies (or foreign companies operating in Scotland, including post-independence, English, Welsh and Northern Irish companies) to continue their business in an independent Scotland. Such businesses using US restricted technology, are required to operate within the confines of the US International Traffic in Arms Regulations (ITAR) and those contractors working with UK protectively marked materials must satisfy the security requirements for "List X" contractors.

It is unlawful for non-US persons to hold or retransfer certain restricted US technologies or data unless they are appropriately authorised by the US Department of State. The relevant authorisation can take several forms but in all current circumstances has been provided to Scottish based businesses on the basis that the relevant technology or data is to be provided to UK nationals. It is an administrative, civil and criminal offence under US law for any such technology or data to be "retransferred" and this includes making it available to other employees of non-UK nationality. Clearly after independence it is unclear to what extent employees in Scotland would be recognised by the US as UK nationals despite living in a foreign state and to what extent the State Department would consider that the removal of Scotland from the UK would itself constitute a breach of the original US export licence which allowed the technology/data into the UK. What is clear, is that in the absence of amendments by the State Department to the original ITAR export licences and agreements, the recipient individuals and companies in Scotland would be in breach of their ITAR requirements and would potentially face US criminal sanctions. Whether the State Department has the willingness or time to make the relevant changes to allow the continued use of ITAR technology/data in an independent Scotland prior to a date set for independence is unknown, as is the timescale post-independence it may take to resolve this. There are clear political overtones to the making of any of the necessary legal amendments. The absence of such amendments would result in either significant difficulties or the closure of business of any relevant company. Going forward, companies operating in the remainder of the UK may have an advantage over Scottish based businesses due to the UK-US Defence Trade Cooperation Treaty which is, in part, designed to restrict the complex and costly requirements of ITAR compliance for UK businesses.

A similar issue arises in relation to the List X requirements of the UK MOD. Contractors dealing in restricted materials must satisfy these requirements. As an independent Scotland would no longer form part of the UK, it is difficult to understand how they would be able to continue to satisfy List X security requirements. Clearly contractual amendments may be made but again these would be subject to considerable political overtones. The withdrawal of classified information (if that was the outcome) would, as with ITAR, result in either significant difficulties for, or the closure of, business in Scotland for any relevant company.

Footnotes

1 Taken from page 235 of the White Paper: Chapter 6 International Relations and Defence

2 Taken from page 248 of the White Paper: Chapter 6 International Relations and Defence

3 Taken from page 247 of the White Paper

4 Taken from page 237 of the White Paper

5 Taken from page 244 of the White Paper

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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