Multi-billion-pound companies linked to the provision of the supply of weapons and parts for war planes to Israel have benefitted from over £2m over three years in publicly funded support grants from the Scottish Government economic development agency, the Herald can reveal.
It forms part of a 'shocking' £9m spend by Scottish Enterprise on support grants over the three years with companies linked to the arms industry.
Ministers, who have said they do not fund weapons manufacture, have come under fire over the spend on eight firms which together made billions in profits in their last full financial year.
The £1.636m spend on defence firms linked to supplying Israel, Raytheon, Leonardo and BAE Systems includes £778,725 in grants in 2023/24 alone.
The three international firms have made profits totalling over £13bn in their last full trading year.
The Scottish Peace Network has condemned the spend and called for the Scottish Government to claw back the money that has been given to the hugely profitable firms and to stop any further funding.
The Campaign Against Arms Trade (CAAT) said the "utterly unacceptable" grants should be halted immediately and that a "comprehensive review" is carried out over Scottish Enterprise's public spending policies.
The international human rights organisation Amnesty International has called for the development of "transparent and independently governed ethical policies" to prevent human rights abuses linked to Scottish Enterprise's business relationships.
RTX, the owner of public funding beneficiary Raytheon, is a long-time US defence contractor which has worked on supplying Israel's Iron Dome since 2014. It made a gross profit of just over $12bn (£9.7m) in 2023.
Italian arms giant Leonardo which is linked to making components for F-35 fighter jets, which are used by Israeli forces. It's earnings before interest, taxes, and amortization (EBITA) in 2023 stood at €1.29bn (£1.03bn).
There are concerns that laser targeting systems fitted to F-35 fighter jets are made at Leonardo's Edinburgh factory in Ferry Road.
Defence contractor BAE Systems, which is also linked to making parts for the F-35, made underlying profits before interest and tax of £2.7bn in 2023 amidst the wars in Gaza and Ukraine.
According to Scottish Enterprise, which says it "does not support the manufacture of munitions", the £250,000 given to Raytheon in 2023/24 was for research and development into unidentified products.
It waid that Raytheon will "focus on new markets and customers. This will enable Raytheon to develop the technology for these new products, whilst also allowing the company to embrace advanced manufacturing techniques to ensure products are made in the most effective and sustainable way."
The £150,125 grant given in the same year to Leonardo was also for research and development into an unidentified product.
Scottish Enterprise said it went towards "overall project costs for strategic investment into the diversification and development of civilian markets and products, which will create new jobs, including graduates and apprentices".
BAE Systems's surface ships wing received £369,600 in the year for training aid support to assist with "up-skilling of the workforce consistent with a transformation in new ways of constructing naval ships on the Clyde".
It also went towards developing a business case for "improving productivity" at BAE's operations on the Clyde.
BAE Systems said it is a partner on Lockheed Martin’s global F-35 programme, which includes Israel but does not sell military equipment directly to the country.
A BAE Systems spokesperson said: “As part of a wider £300m commitment to shipbuilding on the Clyde, BAE Systems is investing in a new Applied Shipbuilding Academy. We welcome the additional funding from Scottish Enterprise which will support the ambition to attract, retain and develop the workforce of the future and both help secure the long-term viability of shipbuilding in Glasgow and provide an ongoing valued and significant contribution to the Scottish economy.”
More than 34,000 have been killed in Gaza since October 7, with the majority of victims women and children, including at least six killed by an overnight airstrike on a house in Rafah.
The milestone comes as hope of a ceasefire has faded, while global attention has moved to the exchange of missile and drone strikes between Iran and Israel.
Nearly 77,000 people have also been wounded, according to health authorities under the Hamas-run Gaza government. The figures exclude tens of thousands of dead who are believed to be buried in the bombed-out ruins of homes, shops, shelters and other buildings.
The figures do not differentiate between civilians and Hamas fighters; Israel’s military says it has killed more than 13,000 militants.
The previous First Minister Nicola Sturgeon had repeatedly claimed that the Scottish Government does not fund the manufacture of munitions.
Ministers have previously state that human rights due diligence checks have been rolled out and are part of the Scottish Enterprise application process.
RTX told investors in October the increased US funding for Israel will generate fresh contracts for missiles from the company’s Raytheon division.
RTX chief executive Greg Hayes said admitted it stood to "benefit" from a US Department of Defense's budget increase which would fund the supply of weapons to Israel and the restocking of weapons in Ukraine.
"I think really across the entire Raytheon portfolio, you're going to see a benefit of this restocking," Mr Hayes said on the call. "On top of what we think is going to be an increase in DOD [Department of Defense] top line."
Since 2014, RTX Corporation has been linked to working with Israeli company Rafael Advanced Defense Systems to help produce Israel's Iron Dome, which detects and shoots down incoming rockets. The US Department of Defense has been funding the Iron Dome since 2011, a few years after Israel first began to deploy it in 2007.
In 2020, RTX Corporation and Rafael Advanced Defense Systems partnered to create a joint venture called Rafael USA, a US-based company that produces both the missile interceptors and launchers that make up Israel's Iron Dome Weapon System, and a new US derivative of the weapons called SkyHunter.
"This will be the first Iron Dome all-up-round facility outside of Israel, and it will help the US Department of Defense and allies across the globe obtain the system for defense of their service members and critical infrastructure," Sam Deneke, RTX's vice president of land warfare and air defense business execution, said at the time.
Sean Clerkin of the Scottish Peace Network which has been tracking the Scottish Enterprise spend said: "It is unacceptable that the Scottish Government has given money to arms companies who are contributing to the genocide against the Palestinian people in Gaza by supplying parts and components of weapons of death that are sold to Israel.
"We are calling on the Scottish Government to demand a clawback of the money give and also to stop giving any further future funding of taxpayers money to arms manufacturers.
"It is time the Scottish Government stopped subsidising the military-industrial complex and instead gave all its resources towards supporting the welfare state that nurtures and cherishes human life.
Video: Palestine Action Scotland said they 'shut down' the Edinburgh factory of Leonardo UK, occupying the roof of the site in a protest last year.
Emma Cockburn, Scotland co-ordinator for the the Campaign Against Arms Trade (CAAT) added: "It is utterly unacceptable that the Scottish Government are proceeding with 'business as usual', and we see another year pass where arms companies that profit from death and destruction are lining their pockets from the public purse.
"Despite over 30,000 Palestinians murdered and three-quarters of a billion pounds in profit for arms companies like Raytheon and Leonardo later, Scottish Enterprise still refuses to shift their priorities even an inch. We have been calling for a complete overhaul of the so-called 'human rights due diligence checks'.
"Yet here is another prime example of how the whole public funding system via Scottish Enterprise and its partner bodies desperately needs a comprehensive review.
"The Scottish Government cannot pretend that the supposed 'training and R&D' grants do not uphold the warmongering these companies hold at their core, and ultimately, it is the same shareholders who profit from the F-35 warplane sales or the thousands of smart guided bombs sold to Israel or Saudi Arabia.
"We need to see an immediate suspension of this funding pipeline, a total review of how public funding has been funnelled in this way, and the implementation of fit-for-purpose due diligence checks."
Scottish Enterprise support said the financial support was for projects on Scottish sites and does not include assistance for any projects that are related to the development of munitions or weaponry.
They insisted that the funds are mainly designed to help those Scottish sites to diversify into civilian markets and "differentiate from other potential sites within a parent company’s operation".
Neil Cowan, the new Scotland programme director at Amnesty International added: “Israeli forces continue to commit war crimes and possible genocide in Gaza, with indiscriminate attacks killing and injuring vast numbers of Palestinian civilians. These attacks have taken place in the context of Israeli’s ongoing system of apartheid against Palestinians.
“Any sale of arms or their components to Israel risks facilitating the ongoing horrors that are unfolding, as well as reinforcing Israel’s system of oppression and domination. Scottish Enterprise's due diligence process has been criticised repeatedly and Amnesty has called for the development of transparent and independently governed ethical policies to prevent human rights abuses linked to its business relationships. Alongside the Scottish Government, Scottish Enterprise must give urgent assurances that no Scottish public funding is supporting the development or manufacture of weapons used to commit human rights violations, including war crimes in Gaza.”
A Scottish Enterprise spokesperson said: “The defence companies we work with employ tens of thousands of people across Scotland. Our aim is to help make their Scottish operations as economically sustainable as possible and to support their continued diversification into civilian markets, with a view to sustaining and growing employment.
“Decisions to assist companies are based on the economic potential of proposed projects, all of which are delivered in line with the economic and social impacts contractually agreed with the company. Scottish Enterprise’s funding does not support the development or manufacture of munitions.”
Scottish Enterprise said it was a ‘gap’ funder, only ever providing a minority percentage contribution to overall project costs.
Scottish Enterprise was asked why it is that companies that make billions in profits were able to access this public spend but did not directly respond.
A Scottish Government spokesman added: "Support for defence sector companies is primarily focused on helping firms to diversify their activities and technologies, ensuring Scotland continues to benefit from significant economic returns and thousands of jobs in the sector.
“Our enterprise agencies have appropriate safeguards in place to ensure that any funding provided is used only for the specific purpose intended and that human rights due diligence checks are central to the application process.”
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