That this House has considered the impact of the Spending Review 2025 on Scotland.
It is a pleasure to serve under your chairmanship, Sir John. On behalf of the Scottish contingent, I would like to thank the weather for finally breaking slightly, so that we can enjoy these much more suitable conditions—something else delivered by a Labour Government.
It is a privilege to discuss today the implications of the recent UK Government spending review for Scotland—a review that marks a pivotal moment for our country, offering both opportunities and challenges that we must confront with clarity and resolve. Let me begin by acknowledging some of the significant investments that were announced in the spending review and associated announcements. The allocation of £25 million for the Forth green freeport, which includes Rosyth in my constituency, is a welcome development and an investment that has the potential to transform the local economy, create jobs and position Scotland at the forefront of green innovation. I commend the Government for recognising the strategic importance of that initiative. In addition, the provision of £234 million in local funds to bring investment to communities across Scotland is a vital step forward.
I congratulate the hon. Gentleman on all he does in this place; he is making an excellent name for himself when it comes to working for his constituents. Although the new growth fund that will invest in deprived communities across the United Kingdom is welcome, the Scottish funding from it will be the same overall level in cash terms as under the UK shared prosperity fund for 2025-26. There are regions and locations in Scotland and Northern Ireland that have been historically underfunded, and therefore equality of spending will not bring about equality of outcome. Does he agree that the Minister, who is an honourable lady, must look at this and ensure that the Government’s goal is equality of outcome? It must be the same for everybody.
I think the Government are already moving towards a focus on outcomes for budgeting, and I would like to see more of that.
As my constituency contains a large number of former coalfields, I have been working closely with colleagues on the replacement of the shared prosperity fund and how we can ensure that it delivers skills and investment for young people and opportunities in all parts of the United Kingdom. I can assure the Minister that I will be working with local stakeholders in Dunfermline and Dollar to ensure that our area secures a fair share of the funding that has been allocated for the many great projects that stand to deliver real benefits to my constituents.
Over the next three years, this Labour Government will provide the Scottish Government with an additional £9.1 billion for Scottish public services. That is the largest settlement in real terms since devolution began, and a historic opportunity for the Scottish Government to invest in the NHS, police, housing and schools—services that are the bedrock of our society, yet are the root cause of much of the correspondence I receive from constituents who are being failed by the current Scottish Government in Holyrood.
One year on from a housing emergency being declared, house building is down in Scotland, and 10,000 children remain in temporary accommodation, with no home to call their own. Indeed, as a former Fife councillor, I know that Fife council is still in the unenviable position of knowing that it breaks the law every single day when it comes to housing, because of the salami-slicing of local government budgets by the Scottish Government. That the SNP Scottish Government knowingly preside over such a situation is unfathomable, having taken their eye off multiple balls during their disastrous time in power.
I must also express my concern that, no matter how much funding is made available, the Government in Holyrood continue to fall back on a familiar pattern of whingeing and wasting. We have seen this time and again, from the mismanagement of ferry contracts to the establishment of overseas embassies that serve little practical purpose beyond a vanity project and a residence for the Minister to have a very nice time on holidays funded by the public purse.
The Scottish Conservatives have suggested that we should be prioritising Scottish-based students for medical places at university, because they are much more likely to stay in the UK and therefore contribute to our workforce. Would the hon. Gentleman support that to help the backlog and health services in Scotland?
We have actually seen announcements from the UK Health Secretary about prioritising UK students.
In my constituency, a new GP surgery in Kincardine has been promised for well over a decade, but is still awaiting Government funding. That village in the west of my constituency is growing, and its current GP surgery, which is little more than a cottage that used to be a police station, has been there for more than 120 years.
On digitisation, there has been better news in Scotland in the past couple of weeks. The NHS Scotland digital app will launch later this year; however, it will work only in dermatology and one NHS board. I am sure I could make jokes about rash decisions and the SNP getting under people’s skin, but these critical issues are having a real impact across the country. There is a real risk that as football clubs across Scotland begin pre-season training, the Cabinet Secretary for Health and Social Care might stop visiting hospitals and go back to last season’s failed tactics of being driven to the pub and between football grounds.
The spending review, driven by the UK Labour Government, rightly puts faith in our young people and the future. It includes investment in AI and the nuclear and defence sectors, alongside £1.2 billion for training and apprenticeships, designed to equip the next generation with skills and give them the opportunities they deserve. Yet in my constituency, Fife college has warned of cuts to courses and campus closures due to the mismanagement of the Scottish budget by the SNP. That is a betrayal of our young people’s potential, and takes money away from the working class kids of Fife to prop up its own failures in higher and further education elsewhere in the country.
While the UK Labour Government are investing in regional transport across England, in Scotland rail fares have increased three times since March 2024 and we have lost 1,400 bus routes since the SNP came to power—something my constituents feel strongly and keenly because of the rural nature of the constituency, including Dollar, Muckhart and the west Fife villages. That is not progress but regression, and is particularly challenging for the rural parts of my constituency.
Order. I hope the hon. Gentleman will tailor his critique of the SNP Government to the spending review. I appreciate the thrust of his remarks, but he will understand my advice.
Thank you, Sir John. I will of course take that on board. You will glad to hear what I am coming to next.
Economically, however, we have seen the SNP’s failure to take responsibility for the Scottish economy, as confirmed by the Scottish Fiscal Commission. That has cost the country about £1 billion and left it unable to keep pace with UK economic growth. Yet all we hear, after 19 years in power, is that it is someone else’s fault. We have also seen the proposed closure of Alexander Dennis in Larbert and Camelon, with the potential loss of 400 jobs. The chief executive stated:
“the Scottish Government has little regard for domestic bus manufacturing jobs in Scotland”.
I now turn to the actions that I believe the UK Government can take, following the spending review, to support economic growth and other aspects in Scotland. As an island nation, we depend on maritime and aviation infrastructure. There are promising opportunities in Fife for the development of sustainable aviation fuels and their maritime equivalent. Those sectors were a priority in the spending review, so money was set aside to support them, and legislation on this matter is currently passing through the House. I urge the Government to support investment in those key sectors.
The spending review also stated that aviation infrastructure must be improved. One practical step that we can take is to finalise a US visa pre-agreement clearance at Edinburgh airport, where I understand there have been negotiations between the Foreign, Commonwealth and Development Office and the US State Department. Will the Minister prioritise that issue and do everything she can to make it a reality?
While on the subject of transport I must raise again the matter of a direct passenger ferry route between Rosyth and Dunkirk. Despite the genuine best efforts of my SNP predecessor, who worked incredibly hard on this issue, progress has been stymied by legal complications regarding border control posts. However, it is estimated that such a route could carry 79,000 passengers annually and bring an additional £11.5 million to the Scottish economy, and on the freight side remove 8.2 million km of freight traffic from UK roads, significantly reducing carbon emissions.
It is a pleasure to serve under your chairmanship, Sir John. I congratulate the hon. Member for Dunfermline and Dollar (Graeme Downie) on a thorough and well thought-out speech.
Before I go any further, I should state my credentials as a devolutionist. My name is on the claim of right for Scotland, signed all those years ago in Edinburgh. I was a founding member of the Scottish Parliament and served on the Scottish Constitutional Convention before that. I believe in devolution and had the honour to serve as a Member of the Scottish Parliament for much of my present constituency for some 12 years. Looking back on those days—my goodness me—what would we have done with £9.1 billion? It would have been an absolute godsend.
What my constituents have great trouble understanding is how the money seems to go in one end of the pipe but not come out the other. I have probably bored this place endlessly about maternity services in the far north of Scotland but, for old times’ sake, I am going to do it again. We used to enjoy a consultant-led maternity service based in Wick, in Caithness, and mums could give birth locally. It was then proposed, during my time in the Scottish Parliament, that that would be taken away and done from Inverness. We saw that one off, however; the then Labour-Liberal Scottish Executive changed their mind and left the service local.
As everyone knows, because I have said it so many times, more recently that change has come to pass and we no longer have a maternity service based in Caithness, in the north of Scotland. Mothers have to take a more than 200-mile round trip to give birth, even in the middle of winter, when the A9 blocks at the Ord of Caithness. You have to be joking! In one harrowing case a mother bearing twins was on her way from Caithness to Inverness and gave birth to the first child in Golspie and the second in Inverness.
The hon. Member, as usual, makes a powerful case for his constituency, but I am surprised that he is repeating the Labour figure of £9.1 billion, which has already been heavily criticised by the Fraser of Allander Institute. Did Labour get it wrong or did the Fraser of Allander Institute get it wrong? I just want clarification on that point of fact. I would hate for the hon. Member to be using dodgy Labour figures.
I would hate to mislead hon. Members, but nevertheless, the perception remains that lots of money is going in one end and not coming out the other in different parts of Scotland. That is a dangerous perception, to say the least.
The hon. Member for Arbroath and Broughty Ferry (Stephen Gethins) is known to be fair-minded. I hope that he will take back to Holyrood what I think will be the nature of this debate and reflect it there in an honourable and fair way. These are genuine worries. I did not sign the claim of right for Scotland on a whim; I signed it because I believed it back then. I really do want to see the Scottish Parliament and Scottish Government thrive, and I hope that in years to come we will see things being done rather differently.
It is a privilege to serve under your chairmanship, Sir John. I commend my hon. Friend the Member for Dunfermline and Dollar (Graeme Downie) for securing this important debate and for his speech highlighting what a Labour Government in Westminster can mean for our constituents in Scotland.
The spending review delivers a major boost to Scotland. Over the next three years, the Scottish Government will receive £9.1 billion of funding. That marks the largest real-terms settlement since devolution began. Labour has ended austerity in Scotland. These are not just numbers; this funding is an opportunity for real change. It must be used to strengthen the services people rely on every day: our NHS, schools, police and housing. It is now down to the Scottish Government to deliver on those matters with this funding from the UK Labour Government.
I also welcome the spending review’s creation of and support for four investment zones and green freeports, in the north-east, in Inverness and Cromarty Firth, at Forth Green and, most importantly to me, in the Glasgow city region. That includes £160 million each over 10 years. The Glasgow investment zone will focus on advanced manufacturing, a future growth sector that the city is well placed to lead, with its world-class universities and a strong pool of talent in the region. The investment zone will be focused on sites in Renfrewshire, alongside existing innovation districts and underdeveloped sites near critical infrastructure around Glasgow airport. Local partners expect it to generate at least £1.7 billion of investment and up to 18,000 full-time equivalent jobs over 10 years, and boost the region’s research and innovation economy.
In recent years, we have seen the benefits of further devolving power and funding to city regions across the UK, with the ability at local level to create and tailor policies to better serve our communities. In Scotland, however, devolution appears to have stalled at Holyrood. There is little appetite to pass power and more funding to the Glasgow city region and other communities across Scotland. I hope that the Minister will indicate that the UK Government would support further devolution to the Glasgow city region, and I hope that the Scottish Government move quickly to achieve that.
It is a pleasure to be with you this morning, Sir John. I congratulate the hon. Member for Dunfermline and Dollar (Graeme Downie) on securing the debate and on making the points that he made.
The hon. Member, like other Labour Members, in particular, seems to like talking about the Scottish Government, who are not answerable to this place, rather than the UK Government, who are. To be fair, I am not surprised. We saw after last night’s debacle that they would rather talk about anything but the Labour Government, who have delivered very little over the past year apart from chaos and a continuation of failed Conservative policies—not much change there.
The fact is that this place still has a profound impact on the Scottish Parliament. It is where the majority of its budget comes from and it has a huge impact on the policies that can be pursued in the Scottish Parliament, as the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) will be well aware as a founding member of that institution, which he rightly highlighted. Scotland is still hampered by migration policies and the hostile environment, as we have witnessed recently at the University of Dundee, whose losses are overwhelmingly attributable to the drop in international students as a direct result of those policies.
I thank the hon. Member so much for giving way so gladly. I have visited universities recently, too, and they also point to the real-terms cut in funding from the Scottish Government having a real impact on their budgets. In the interests of fairness, will he reflect on that too?
I will gladly reflect on that, but I make the point to the hon. Lady—let us take universities as an example—that at the University of Dundee, the difference between Scottish and English fee income would not even have covered the national insurance increase, and that increase was further dwarfed by the reduction in international student income. Under the Conservative Government, universities had been encouraged to go out and recruit internationally, and they were joined in that venture by Ministers before the Conservatives changed their mind.
I am sure that we will all agree that the internationalisation of our universities has been a positive thing. I refer to my entry in the Register of Members’ Financial Interests: it has been a privilege to work at the University of St Andrews, where internationalisation enhances both the learning process and the research, making us all better off in the process. However, the changes to migration policy had so great an impact—I am sure that the hon. Member for Gordon and Buchan (Harriet Cross) will agree with me about this—that I asked the Home Secretary to come to Dundee and visit the institution, just to see and learn. She refused. Perhaps the Minister could encourage another Home Office Minister to visit.
I touched earlier on national insurance increases, which are hobbling businesses and therefore growth. Those have a particular impact on small businesses, which cannot expand or recruit. That has been raised not just by me and my SNP colleagues, but by other colleagues in the House. Even though Labour MPs want to do anything but talk about a Labour Government —that is quite telling in its own right—the increases have an impact, and the Labour Government deserve to be held to account.
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This morning I looked over the caseload in my office, and a third of cases received are from people with problems relating to devolved policy areas. So fed up are the people of Dunfermline and Dollar by the myriad failures of the SNP that they know the best place to come for help is Scottish Labour MPs and a UK Labour Government. This morning, we learned that more Scottish public money will be spent on defending the former chief executive of the SNP in a court case about a caravan found in my constituency.
In England, the UK Labour Government have recruited more than 1,500 GPs since 1 October thanks to Government action and the digitisation of the health service in England progressing more quickly. Meanwhile, in this place I have had to raise issues including access for little boys to timely medical help for Duchenne muscular dystrophy, a lack of local dentists, and care and support for those with Parkinson’s. I am also aware of the case of Vicki Tocher, a constituent of mine who has been battling for almost a year to get her eight-year-old son, Issac, in front of doctors after he suffered a traumatic brain injury while at school.
In Scotland we see delays to national treatment centres. One in six Scots is on an NHS waiting list, there are 50,000 fewer operations than before the pandemic, and a record number have been forced to turn to private healthcare. In February, the Royal College of Emergency Medicine said that the number of patients waiting more than 12 hours in A&E in Scotland is 99 times higher than it was 14 years ago.
Moreover, the ideological objection in Scotland to nuclear power and the refusal to embrace new small modular reactors will cost Scotland dearly. We are losing out on jobs, investment and the opportunity to secure our energy future. That is not just short-sighted but a dereliction of duty.
To meet the target of launching the service by spring 2026, we must resolve the legal issues swiftly. There are strong indications that the Scottish Government can act in the short term, but I think there is genuine legal confusion. I have written to the Secretary of State just this week to ask if he will work with Scottish Ministers on a legal assurance letter that would guarantee the issue will be investigated in time to solve the problem for 2026. Will the Minister pursue that with the Secretary of State as a matter of urgency?
Finally, I turn to defence. The spending review confirmed that defence spending will rise to 2.6% of GDP from 2027, with an ambition to reach 3% in the next Parliament. We have seen announcements this week around the NATO summit that defence spending will rise even more, which I fully support. This aligns with the strategic defence review and underscores the Government’s commitment to national security.
Scotland viewed on a globe rather than a flat map is a frontline nation in defence of NATO’s northern flank. From the high north, Russian ships and submarines pose a threat to NATO merchant shipping and critical underwater cables in the Atlantic. Both the strategic defence review and the spending review rightly highlight the need to strengthen NATO’s deterrence in northern Europe and the high north. NATO Secretary-General Mark Rutte has also emphasised the importance of an expanded role for NATO in that region.
It is a source of great pride for me that Scotland’s highly skilled defence workforce is at the forefront of meeting the UK’s defence needs, including building and launching new Type 31 frigates from Rosyth in my constituency. The Minister for Defence Procurement and Industry, the right hon. Member for Liverpool Garston (Maria Eagle), has confirmed the importance of export orders for this ship. Can the Minister to assist me in any way possible to support the workforce and secure orders for both export and the Royal Navy of this versatile ship?
Thankfully, defence is mainly reserved to Westminster. However, the total failure of the Scottish Government on devolved matters such as skills and infrastructure has directly impacted the defence sector, our armed forces and the ability of the spending review to meet its goals, along with the strategic defence review. We have the farcical position that senior people in the SNP say that it is party policy that public money should not be spent on military equipment, denying young people the chance to become welders—a skill much sought after across a range of sectors. Even more ridiculously, the SNP has responded to a request for medical aid from Ukraine by dictating that aid could not be used on military casualties—a preposterous view that is utterly detached from reality. Millions of pounds are wasted on embassies, but the SNP cannot even handle a simple request from an ally.
The spending review has unlocked the start of long-term plans in other Departments, which can also support the wider defence industry in Scotland, securing jobs and investment. This week, the Secretary of State for Business and Trade spoke about the prospect of a defence growth fund in Scotland. What discussions has the Minister had with her colleagues about that fund? How is she ensuring that it will include a broad partnership in Scotland, including in areas such as skills, so that young people in my constituency can benefit from the necessary increase in defence spending?
The UK Government’s spending review offers Scotland a path forward—one of investment, opportunity and renewal. To realise this potential, we must first confront the failures of the SNP Government and demand better for our constituents. We must ensure that every pound allocated is spent wisely, that every opportunity is seized and that every Scot has the opportunity to thrive in future.
During my time in the Scottish Parliament, we made the argument to Ministers and there was a change of heart. No matter what I and the people of Caithness say now, we cannot get the Scottish Government to change their mind, yet we see all the money going in. As soon as I heard about the £9.1 billion, I said on the record that I sincerely hoped some of the money would go in the direction it ought to, to give mums and babies the same rights as in other parts of Scotland.
Another grouse is that Highlands and Islands Enterprise, the successor body to the Highlands and Islands Development Board, which was set up by Harold Wilson’s Government in the 1960s, is financially a shadow of what it was. At the end of the day, that body, notwithstanding its change of name, is about securing investment and high-quality employment in some of the more remote parts of Scotland. In its day it was highly successful and helped not just halt but reverse depopulation—the new highland clearances—which has been the curse of the highlands for far too long. Again, we see the £9.1 billion coming in and ask where it is going.
I also want to make a wider point. I remind colleagues that I am a convinced devolutionist. However, I suggest that where there is a failure to understand where the money goes or a belief that it is not being delivered fairly, that is corrosive to that cherished notion of devolution. That is a dangerous path to tread.
The UK Labour Government have provided the Scottish Government with a huge and historic opportunity to make progress with the commitments in the spending review to empower our city regions with more powers and funding to better deliver for our communities. In 2026, Scotland will have the chance to choose a Government who not just talk but deliver: a Scottish Labour Government who turn record funding into real results for all of our communities.