An Italian arms multinational with sales worth nearly £7 billion in 2015 has received more than £6 million of taxpayers’ money over the last five years from the Scottish Government, The Ferret can reveal.
Leonardo MW Limited – formerly Finmeccanica – is the ninth largest arms company in the world whose products include missiles, drones, military helicopters and warplanes.
The arms giant generates revenues of £2.3bn for the UK’s economy and employs 7,100 people across the UK.
This includes nearly 2,000 people at a site in Crewe Toll, Edinburgh, designing and producing high-tech products based on airborne radar, advanced lasers and electro-optic systems.
But critics of the arms trade in Scotland say public money should not be given to an “obscenely wealthy” industry that has “routinely armed human rights abusers all over the world”.
In a reply to a freedom of information request by The Ferret, Scottish Enterprise (SE) released details of its grants to arms companies based in Scotland over the last five years.
SE is Scotland’s main economic development agency and a non-departmental public body of the Scottish Government.
Its response revealed that Leonardo MW Ltd has been awarded £6,100,000 for “consolidated R & D projects”. But the agency refused to provide further details, advising us to submit a further freedom of information request.
“This industry is obscenely wealthy and needs no encouragement, let alone public financial support.” John Finnie, Green MSP
According to CAAT, Rolls Royce is the 17th largest arms firm in the world, making aircraft engines for the military, naval engines and cores for nuclear submarines.
Lockheed Martin received £176,615 for “business improvement”, “innovation” “marketing” and “organisational development”.
Raytheon Systems Ltd – a US arms firm with a factory in Glenrothes that makes laser guided systems for smart bombs used in Gaza and Yemen – was awarded £47,761 for “strategic development” and “marketing”.
Raytheon has been linked to alleged war crimes in Yemen amid accusations of indiscriminate bombings by a coalition led by Saudi-Arabia fighting Iranian-backed Houthi rebels.
It recently ran into criticism when it emerged it was running workshops for Fife school children, where pupils were encouraged to make drones.
Campaign Against Arms Trade (CAAT) urged the Scottish Government to stop funding firms profiting from war. When it was Finmeccanica, Leonardo sold arms to nations with poor human rights records including Algeria, Libya and Turkey, the group said.
CAAT also said Leonardo made a deal worth €300 million in 2009 for border security to stop migrants coming into Libya on route to Italy.
“The deal included radars and other surveillance systems, a command, control & communications system and the training of staff ,” CAAT said on its website, quoting defence newsletters.
“Human Rights Watch has documented abuse of immigrants detained by border guards in Libya in recent years as well as Libyan border patrol boats firing on civilian boats in 2010.”
CAAT’s Andrew Smith argued the Scottish Government had “rightly condemned Westminster for arming and supporting human rights abusing regimes”, but was handing public money to companies responsible for the arms sales.
He added: “Leonardo, BAE and Raytheon have routinely armed human rights abusers all over the world, they are among the last companies that should be getting government money.”
Green MSP John Finnie said that public money should not be used to “support the design, manufacture or sale of arms”.
He added: “This industry is obscenely wealthy and needs no encouragement, let alone public financial support.”
“We support businesses across Scotland, including those operating in the aerospace, defence & marine industries (ADM) in areas such as innovation support, workplace efficiencies and training." Scottish Enterprise
However, Scottish Enterprise defended its grants. “We support businesses across Scotland, including those operating in the aerospace, defence & marine industries (ADM) in areas such as innovation support, workplace efficiencies and training,” said a spokesperson.
“All ADM projects supported by SE show significant economic impact in return for funding, particularly in the safeguarding and creation of new jobs.”
ADS – which supports the UK’s defence sector – told The Ferret that businesses in the UK’s defence and security sectors make a “vital contribution to keeping our country safe”, as well as delivering more than 240,000 jobs and £10bn in exports.
Leonardo MW declined to comment but the firm’s website provides information on the company.
It said: “Headquartered in Italy, Leonardo has over 45,600 employees. With its offices and industrial plants, the company is present in 180 sites worldwide, with a significant industrial presence in four domestic markets (Italy, the UK, the U.S. and Poland) as well as strategic partnerships in the most important high potential international markets.”
The website continued: “Leonardo employs around 7,000 people throughout the UK, 67 per cent of whom hold highly skilled positions. We are one of the largest employers of engineering apprentices and graduates in the UK, with some 415 people on undergraduate, graduate and apprentice training programmes.”
A spokesperson for Rolls Royce said: “The support we received from SE was for our aerospace supply chain unit in Inchinnan, which makes parts for a wide range of our aircraft engines and services them.
“While it is for SE to explain to you why they award their grants to the companies that they do, I would say that our facility in Inchinnan employs over 800 highly skilled people and supports jobs in the surrounding area.
“We’re not an arms company, we make engines and I would stress that Rolls-Royce fully complies with Government export control laws and regulations. We made a reported pretax loss of £4.6bn in 2016.”
Photo thanks to Campaign Against Arms Trade. It shows an AW159 Wildcat helicopter, whose recent buyers include South Korea and the Philippines.
This story was updated at 15.30 on Oct 17th 2017 in order to add a response from Rolls Royce.