Scotland Bans Arms Firms Supplying IDF from Receiving Financial Support

Published: 04 September 2025 | The English Chronicle Desk

The Scottish government has announced a ban on arms companies that supply the Israel Defense Forces (IDF) from receiving financial aid, marking one of the most significant policy shifts in the devolved administration’s trade and investment strategy. The move comes against the backdrop of mounting international concern over the humanitarian crisis in Gaza, with First Minister John Swinney describing the situation as a “catastrophe” and calling for urgent global action.

Addressing the Scottish parliament, Swinney said that defence contractors seeking grants, loans, or investment from public funds would now be required to prove that their products would not be used by the IDF. “The scale of suffering [in Gaza] is unimaginable,” he said. “Nobody can ignore it. We must confront this crisis with urgency, compassion and an unwavering commitment to accountability.”

The decision also includes a freeze on support for non-military trade with Israel. Swinney confirmed that he had instructed government agencies, including Scottish Enterprise and the Scottish National Investment Bank, to halt any new financial support for companies whose products were linked to the IDF. The policy shift follows his appeal for the UK government to back the genocide case against Israel at the International Court of Justice, a call that has stirred debate across Westminster.

Investigations by the Ferret website revealed that since January 2022, Scottish Enterprise has awarded at least £2.75 million to defence companies such as Raytheon, Thales, and Leonardo—all of which manufacture equipment used by the IDF, including guided missiles, drones, and parts for the F-35 fighter jet. Swinney’s intervention is designed to bring an end to such funding.

Critics of Israel’s military actions welcomed the announcement. Jamie Livingston, head of Oxfam in Scotland, urged Westminster to follow suit, warning that “Gaza is being turned into a graveyard before our eyes. History will ask if leaders did everything they could to stop it. The first minister has committed to act; Westminster must do the same.”

However, the policy has already attracted criticism and accusations of inconsistency. While the ban targets companies supplying Israel, Swinney also announced the lifting of restrictions on financing firms that provide munitions to Ukraine. UK government sources argued that this dual approach risked confusion, given that some companies supply both Ukraine and Israel. A Whitehall official described the policy as “all over the place,” highlighting firms such as BAE Systems, which supplies equipment across multiple defence programmes and employs thousands of workers in Scotland.

The tension is further underscored by Scotland’s economic reliance on defence contracts. Earlier this year, BAE Systems secured a central role in a record £10 billion deal with Norway to build at least five new Type 26 frigates, safeguarding 2,000 jobs at shipyards along the River Clyde. In June, Scottish Enterprise committed £9.22 million to fund a new BAE training academy, which will create hundreds of jobs. Swinney acknowledged the delicate balance, confirming that apprenticeship programmes at defence firms would remain unaffected by the new restrictions.

The UK government, for its part, insisted it had already tightened controls on military exports to Israel. A spokesperson said: “We have suspended licences for exports of military equipment to the IDF that might be used in operations in Gaza, subject to the special measures in place for exports to the global F-35 programme, based on our assessment that these could be used to commit or facilitate serious violations of international humanitarian law. We will work with our allies and those in the region on a meaningful process towards a two-state solution and continue to do what we can to support the foundations of Palestinian statehood.”

Swinney’s announcement signals Scotland’s growing willingness to assert an independent stance on international issues, even as critics question the practical implications for its economy and defence industry. With pressure mounting across Europe and beyond for governments to reassess their role in conflicts abroad, Scotland’s policy shift may become a touchstone in the wider debate over ethics, trade, and the arms industry.