Just as the people of our country have demonstrated great stoicism and strength in the face of adversity, our economy has also proved remarkably resilient. That resilience enabled the UK Government to provide unprecedented protection to shield families from the economic fallout of the Ukraine war, including its impact on energy and food supplies.
I’m determined that the UK Government continues to support those in need as we grow the economy, create jobs and opportunity, and regenerate communities. Therefore, I am delighted the Budget announced by my colleague Jeremy Hunt this week has an unrelenting focus on these goals.
As Scottish Secretary, I’m particularly pleased that the Budget delivers for Scotland with a series of exciting initiatives that will stimulate the economy, attract investment and bring jobs. The Scottish Government received a record £41 billion settlement at the spending review, and significant additional funding at the Autumn Statement. Wednesday’s budget resulted in a further £320 million through Barnett consequentials – additional funding which comes to the Scottish Government when money is spent in devolved areas south of the Border.
Despite the global pressures of inflation, the economic strength of the UK means the Scottish Government’s cash settlement is growing in real terms over the current spending review period. Much of these Barnett consequentials can be attributed to the UK Government’s ambitious plans to expand free childcare to cover one and two-year-olds in England.
Of course, it’s up to the Scottish Government how it spends the extra £320 million. The Scottish Government is well funded to deliver its devolved responsibilities, but this boost gives Scottish ministers the freedom to make their own childcare offer. I would urge them to do so, to help Scottish parents back to work.
One of Scotland’s strengths is our expertise in high-tech industries, green industries, manufacturing and life sciences. The UK Government has announced at least one investment zone in Scotland, building on the collaborative approach of working with the Scottish Government, which has seen the creation of two freeports in Scotland and 12 City and Growth Deals.
Each zone will be supported by £80 million over five years, and I’m hugely excited by their potential to stimulate wealth creation, scientific advances and the jobs of tomorrow. They will be another demonstration of what can be achieved when the UK and Scottish governments set aside their differences to work together in the interests of Scotland’s people and businesses.
Another example of how our levelling-up agenda is flourishing in Scotland is the Chancellor’s plans for Glasgow City Region to benefit from being one of the UK’s three ‘innovation accelerators’, a status which gives it a share of £100 million. The money will develop 11 projects, which will work with businesses to develop supercomputer technology, space and pharmaceutical expertise, data analytics, the latest green jobs and a host of other exciting technological programmes. This is part of our levelling-up plans which are resulting in more than £2 billion of direct investment in Scotland.
Moving eastwards, the UK Government has recognised the enormous cultural and economic contribution made by the Edinburgh festivals, events which showcase Scotland to the world and bring the world to Scotland. It is great news that £8.6 million is going to the festivals, a sum that could help pay for a permanent home for the Fringe.
I was also pleased the Chancellor underlined his commitment to carbon capture, confirming £20 billion for these ambitious net-zero initiatives. Shortly we can expect the process for the next funding round to begin, paving the way for projects across the UK. We also understand how much communities can be boosted by relatively small cash injections, which bring people together around projects which transform areas and enhance their pride in place.
Our Community Ownership Fund (COF) is already benefiting towns and villages across Scotland. So, I was pleased the Chancellor announced that a total of £1.1 million is to go to five more COF projects, ranging from repairing Inveraray pier to the development of sports facilities in Aberfeldy. And, subject to a successful business case, a further £1.5 million will go towards repairing the Cloddach Bridge in Moray as an important local asset, connecting rural communities across Elgin and the wider area.
These examples give a flavour of the sheer range of action the UK Government is taking in Scotland to stimulate the economy. But at the same time, we are keenly aware of just how hard the impact of the global economic headwinds has been on people. We are clear that support to mitigate against those pressures must continue while we work hard to drive down inflation and drive growth.
That’s why we have frozen fuel duty and extended the Energy Price Guarantee, a measure which has protected countless households against the soaring costs of heating their homes. Keeping it at £2,500 until the warm weather comes in at the end of June, will save the average family an additional £160 a year and give them certainty over their bills. And we’ve shown that our support to help people deal with the rising cost of living is unwavering. Alongside other measures, the support being given to an average UK household comes to £3,300 in 2022/23 and 2023/24 – a total of £94 billion.
The measures the UK Government has taken to combat global economic challenges are already bearing fruit. The Office for Budget Responsibility has forecast that the UK will not go into recession and that inflation will fall to 2.9 per cent by the end of the year. This week’s Budget will build on this progress and ensure that the resilient UK economy will thrive. We will continue to support households while bringing greater prosperity and opportunities for everyone in Scotland.
Alister Jack is Secretary of State for Scotland