September 9, 2014 / 9:12 AM / 3 years ago

Thales warns on UK investment if Scotland backs independence

The logo of French defence and electronics group Thales is seen at the company's headquarters in Neuilly, near Paris, May 20, 2008.Charles Platiau

BORDEAUX France (Reuters) - The head of one of Britain's largest defence suppliers, France's Thales (TCFP.PA), has voiced concerns over jobs and investment if Scotland votes to leave the United Kingdom.

Speaking to Reuters as polls showed a surge in support for Scottish independence, nine days away from a referendum, Thales Chief Executive Jean-Bernard Levy said a 'yes' vote would create uncertainty over investments on both sides of the border.

"It is very difficult to make any sort of predictions, (but) it is clear that if it is cut off from Scotland, the rest of Great Britain will have fewer resources to devote to defence and this will inevitably lead us to re-examine our industrial framework," he told Reuters.

"There would be questions over the capabilities we keep in the UK and there would also be questions over the facilities we maintain in Scotland," he said.

Thales is Britain's second-largest defence contractor, with 7,500 employees.

In Scotland, its facilities include a Thales Optronics facility employing around 500 people at Govan, Glasgow, which makes submarine periscopes for the Royal Navy.

British financial markets tumbled on Monday after an opinion poll showed for the first time this year that Scots may vote for independence in the referendum next week.

On Tuesday, a separate poll showed the rival campaigns running neck-and-neck, with a surge in support for those who wish to break away from the UK.

Levy was speaking on the sidelines of a French parliamentary defence conference in southwest France, where the prospect of a break-up of France's closest military partner vied for attention alongside instability in Ukraine and tight Western defence budgets.

"It is a major uncertainty. It would inevitably mean a freeze in investments, and we would have to reflect before making further investments in the light of the shrinking of the UK," Levy said.

"I am also aware that this is very theoretical and we will have to see the results of the referendum. But what's clear is that a group like Thales aims to have as its base for investment countries with ambitions and an amputated Britain without Scotland would create questions for us," Levy said.

Scottish nationalists say they will ask Britain to remove its nuclear weapons if Scots vote for independence. They say they would maintain appropriate defence forces and seek to join NATO.

Britain says it has no contingency plans for Scottish independence as it believes Scots will vote to keep the union, though the future of Britain’s Faslane naval base in Scotland would be thrown into question. Britain has four nuclear submarines carrying Trident nuclear warheads operating out of Faslane, western Scotland.

The possibility of Scottish independence has triggered anxiety among countries facing their own nationalist movements, such as France, Italy and Spain, and reminded defence and security experts of the identity crisis facing some of its own members as Europe wrestles with the Ukraine crisis.

"I think there could be agreements (with Scotland), of course, but I am more concerned about the wider questioning of frontiers and existing states," Patricia Adam, head of the French National Assembly's Defence Committee, told Reuters.

"The idea that this can happen in Europe in regions like Scotland - even though it isn't at all the same context - demonstrates that frontiers are exploding and this is worrying."

Additional reporting by Guy Faulconbridge, Editing by Dominic Evans

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