Scottish independence: BAE Systems says Union 'offers stability'

BAE Systems employs hundreds at its Govan shipyard on the Clyde

BAE Systems has said continued union between Scotland and the rest of the UK offers "greater certainty and stability" for its business.

The defence firm offered its opinion in its annual report.

BAE employs about 3,000 workers on the Clyde and is helping to construct two new Royal Navy aircraft carriers.

The Scottish government said the country's shipyards would be able to bid for any MoD contracts that were put out to tender after independence.

BAE chief executive Ian King said he believed "the decision on independence from the UK is a matter for the people of Scotland".

Mr King continued: "BAE Systems has significant interests and employees in Scotland, and it is clear that continued union offers greater certainty and stability for our business.

"In the event that Scotland voted to become independent, we would need to discuss the way forward with the Ministry of Defence and UK government, and work with them to deliver the best solution in those circumstances."

The company recently agreed to begin advance work on three new Royal Navy offshore patrol vessels (OPVs) after the Ministry of Defence signed a £20m parts contract.

They will be built at BAE Systems' two Glasgow shipyards at Govan and Scotstoun.

A spokesman for Deputy First Minister Nicola Sturgeon said the Clyde "is the only credible place in these islands with the capacity to build these ships."

The spokesman added: "Scotland's shipyards have the expertise to secure UK and worldwide orders - and following independence there will also be orders for the Scottish Defence Force.

"Scottish companies will also be able to bid for any MoD contracts that are put out to competitive tender. The MoD places contracts with companies in Korea - so there is no reason that it could not do so with companies in Scotland."

He said defence companies were used to working within "changing international parameters" and would continue to do so if Scotland backed independence.

But a spokesman for the Better Together campaign to keep Scotland in the UK described BAE's comments as an "important intervention" from one of the country's biggest employers.

He said: "The defence industry employs thousands of people in Scotland because we are part of the UK. If we walk away from the UK then we walk away from the UK investment that sustains the jobs of so many communities throughout Scotland.

"The UK government has never built a warship outside of the UK. The idea that we could leave the UK but UK warships would continue to be built here simply isn't credible."