Rangers, that great British football club, are in Seville tonight for the Europa league final. I hope that the whole House, including the hon. Member for Edinburgh South (Ian Murray), who is an avid Hearts fan, and the right hon. Member for Ross, Skye and Lochaber (Ian Blackford), who is an avid Hibs fan, will join me in wishing them a famous victory.
All areas in Scotland will receive an allocation of UKSPF via a needs-based funding formula. Local leaders are empowered to design their own interventions in line with the levelling up missions. We are determined to boost productivity, pay, jobs and living standards.
Dr Davies
Will my right hon. Friend kindly explain how the allocation of SPF funding in Scotland and across the rest of the UK will help level up those communities more effectively than the previous structural funding?
The UK shared prosperity fund is a central pillar of our ambitious levelling-up agenda for places across Scotland and provides £212 million of new funding for local investment. Local partners have far greater flexibility than before. They can invest in priority areas and target funds where they are needed. Allocations are being made on a needs-based assessment, including a specifically tailored proportion for rural areas in Scotland.
Scotland has been short-changed by the loss of EU funding, leaving a 40% reduction in the funding that we would have received from the EU. It is not only the Scottish Government saying that but the Treasury Committee, the House of Lords Constitution Committee and Bloomberg, so there is clearly no levelling up. What steps has the Secretary of State taken to ensure that Scotland’s shortfall in funding is remedied, and remedied fast?
I seek to correct the hon. Lady: the funding is tapered with UK structural funds. EU structural funds and UK structural funds are tapered. We paid into EU funds, and the EU is still paying into Scotland and the rest of the United Kingdom, but the advantage of Brexit is that we now have control over that money and can decide how we spend it. The amount of money in total has not been reduced in any way.
For years, Ministers have assured organisations in receipt of EU structural funding that the UK shared prosperity fund would maintain that funding after Brexit. Finally, the Government published the details of their shared prosperity fund and, for organisations such as the world-leading European Marine Energy Centre based in Orkney, it was a brutal blow. The Government broke their promise. As a result, EMEC, a site that has tested more marine energy devices than any other in the world, now faces closure. What is the Secretary of State doing to ensure that his Cabinet colleagues keep their promise of matching the funding for EMEC and other Interreg projects in Scotland?
Discussions with EMEC are ongoing between my office, the Department for Business, Energy and Industrial Strategy and the Department for Levelling Up, Housing and Communities. We are making progress, but there is further progress to be made. To that end, I am happy to offer a face-to-face meeting with EMEC.
I have regular discussions with Cabinet colleagues and the Ministry of Defence. The integrated review sets out the Government’s ambitions for defence and foreign policy over the next decade. British armed forces personnel in Scotland play a crucial role in defending the whole of the United Kingdom and our allies, and will continue to do so.
For centuries, Scotland and the rest of the UK have had a united defence stance and military bond. Will my right hon. Friend outline what assessment his Department has made of the direct and indirect impacts, including economic, that Scotland benefits from as a result of being part of the United Kingdom?
The benefits are enormous. Scotland plays a crucial role in the defence of the UK and our NATO allies. The UK strategic bases in Scotland, RAF Lossiemouth and the UK’s nuclear deterrent at Faslane, serve to make the whole of the United Kingdom safer. The economic benefits for Scotland as a result of MOD investment are significant. MOD expenditure with industry and commerce in the last year alone totalled almost £2 billion. Defence investment in Scottish shipbuilding will see order books full until the 2030s. Construction is under way to deliver three cutting edge Type 26 frigates at BAE Systems in Govan, five Type 31 frigates at Babcock in Rosyth, and only this week the MOD awarded a £30 million contract to Babcock in Rosyth to maintain the Royal Navy’s two aircraft carriers, securing 300 jobs for the next 10 years.
The Secretary of State will know that the Scottish Affairs Committee, of which the hon. Member for Hastings and Rye (Sally-Ann Hart) is an assiduous member, is conducting a series of inquiries into defence in Scotland. One of the things the Committee has found in its almost concluded report on the military landscape in Scotland is that only 2.5% of total military spending is spent on Scottish small and medium-sized enterprises. What is the Secretary of State doing to ensure that situation is rectified?
The hon. Gentleman mentions SMEs. The bulk of the spending—literally billions of pounds, worth thousands of jobs—is with British Aerospace and Babcock.
The Secretary of State mentioned the awarding of the contract to Rosyth dockyard, securing 300 jobs in Rosyth, and the frigates and destroyers being built on the Clyde. Does he not agree with me that it is good that at least one of Scotland’s Governments can actually build ships that float?
I think my hon. Friend refers to ferries, and he is absolutely right. I think the ferries float. They just cannot seem to finish them or make them work, or find anything that gets close to resembling a ferry.
During the 2014 independence referendum, the Secretary of State’s Government promised that 12,500 armed forces personnel would be based in Scotland. The current figure is more than 25% below that 2014 promise. With the downward pressure on the armed forces across the board, when will his Government admit that they will never actually meet that target?