Chancellor backs multi-billion pound jobs boost in Scottish defence and energy sectors
Rachel Reeves said Labour is 'seizing the huge potential and opportunities that Scotland has to offer' in defence and energy.
She will visit RAF Lossiemouth in Moray and the St Fergus gas plant in Aberdeenshire on Friday, exactly a week after she toured the Rolls-Royce factory near Glasgow Airport.
The chancellor will meet 200 Boeing staff at the military site where three new E-7 Wedgetail aircraft are being made.
The UK Government said its plans to increase defence spending to 2.6% will raise Britain's GDP by around 0.3% – equivalent to around £11bn of GDP in today's money, according to estimates – while adding 26,100 jobs to the Scottish economy.
It also pointed to its £200m investment for Aberdeenshire's Acorn carbon capture project, which could create 15,000 new jobs while safeguarding 18,000 more. A final investment decision for the project is yet to be made. UK Chancellor Rachel Reeves visiting Babcock, a defence firm in Rosyth, in March
Chancellor Rachel Reeves said: 'We're seizing the huge potential and opportunities that Scotland has on offer.
'Whether it's in defence to keep the UK safe, or clean energy to power all corners of the country, this government is backing Scotland with billions of pounds of investment to grow the economy and create jobs.'
Scottish secretary Ian Murray said: 'The UK Government is investing in defence to ensure Britain's security and deter our adversaries and drive economic growth.
'This investment is a massive jobs opportunity for Scotland – This 'defence dividend' is good news for Scotland, where it will help create skilled jobs, drive economic growth and help tackle the critical skills gaps facing the country in sectors such as nuclear, construction, maritime and project management.'
Great British Energy will be headquartered in Aberdeen to drive clean power generation across the UK.
The Spending Review also committed £250m to secure the future of HMNB Clyde – the first stage of a multi-decade, multi-billion renewal project and all three Clyde shipyards are currently fulfilling contracts for the Royal Navy.
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Spectator
34 minutes ago
- Spectator
Reeves couldn't be more proud of crippling the economy
Rachel Reeves strode onto the stage at the Edinburgh festival in a black jumpsuit and an orange scarf. Iain Dale, in a dark maroon jacket, kicked with a dare. 'Try, if you can, not to use the phrase '13 wasted Tory years' or '22 billion pound black hole.'' 'What else am I going to talk about?' said Reeves. She's a much warmer and funnier soul than her TV image suggests. Dale asked about the awkward moment when she wept during PMQs in June. 'I was having a bit of a day, a difficult day at work,' she said vaguely. 'There was stuff going on. But it's different for me. The cameras are on me. But most people have days at work when they cry.' Dale asked if her troubles had been exacerbated by the Tory leader, Kemi Badenoch, who mentioned in the chamber that she 'was looking miserable.' 'Well, it was a fact, wasn't it,' said Reeves. So why not just skip PMQs? asked Dale. 'I thought I was OK,' she said. 'Obviously, I wasn't. But I thought I was.' Dale asked about her childhood and her early involvement in politics. Her parents were primary school teachers who voted Labour but weren't party members. Aged 17, appalled by the ruinous state of her school, she decided to join the Bromley Labour party. 'The playground was freezing in winter and the library had been converted into a classroom. There just weren't enough textbooks to go round.' She was inspired by Blair's slogan, 'education, education, education' and she campaigned in the 1997 election alongside her younger sister, Ellie, now an MP and chair of the Labour party. At university, she was known as a political wonk and her friends bought her a framed portrait of Gordon Brown for her 19th birthday. The chancellorship, she said, was always in her sights. 'The office has existed for 800 years and it's about time we had a female chancellor. But it shouldn't have taken 800 years.' After Labour's victory last July, she invited Brown to the Treasury which he hadn't visited since 2007. She asked him how old he was when he became chancellor. He told her he couldn't remember. 'I'm only 46,' she said. This jogged his memory. 'Well, I was 45.' Dale asked if Brown likes to call her and offer political advice. 'He doesn't phone,' she said. 'He sends me emails with quite a lot of capital letters.' And does he point out her mistakes? 'No. But he does have a lot of ideas,' she said diplomatically. Brown isn't the only former chancellor who wants access to his successor. She's on friendly terms with Rishi Sunak's chancellor, Jeremy Hunt. 'Jeremy's been in Number 11 a couple of times, had a cup of tea with me, and given good advice.' Dale asked if she expected to meet Donald Trump on his forthcoming state visit and she didn't seem to care either way. 'I suppose so,' she said, airily. 'I met Macron a few weeks ago.' Did she have a message for Trump? She ducked the question and praised her own government. 'We've got our trade deal with the US. One of the best trade deals in the world. At the G7, all the finance ministers want to find out how we got our trade deal.' Dale invited her to say a word in favour of Brexit which enabled the UK to dodge the tariffs levied by America on the EU. She refused to do so. Instead she talked about the levels of global investment arriving in Britain. She mentioned a figure of '£125 billion' but much of this involves carbon capture and renewables produced by GB Energy. The funds are being underwritten by state subsidies. 'We're investing public money to leverage in that private money,' she said. In other words, foreign investors are being bribed to set up shop in the UK. But she likes anything that involves net zero. She regards the Labour party as the saviour of this self-harming energy policy. 'The Tories legislated for [net zero] but are rowing back on it. And Reform are coming out with all sorts of conspiracy theories.' Asked if she regretted any part of her 2024 budget, she gave herself a glowing review. She even praised the wildly unpopular National Insurance rise because it allowed her to sink an extra £25 billion in the NHS. The UK economy is in great shape, she seems to believe. And she twice quoted this odd-looking statistic. 'In the first quarter of this year, the UK had the fastest growing economy in the G7.' Dale asked about Your Party (or 'Jezbollah' as he called it) created by Jeremy Corbyn and Zara Sultana. Reeves laid the blame on Corbyn's hunger for power despite failing to become prime minister in 2017 and 2019. 'He gave us Labour's worst result since 1935. He's been rejected twice. But he's got a big ego.' Reeves is surprisingly cool about introducing new wealth taxes. She said the government already takes a big chunk with inheritance tax and capital gains tax. 'I'm not keen to do what Switzerland does with a wealth tax. And we may lose money.' But her abiding instinct is to expand the state and to pay for it by increasing taxes. A hard-left questioner from the floor asked her to 'stop scoring own goals' and tax people more. 'But we have increased taxes,' she cried in outrage. 'Last year's was the biggest tax-raising budget ever.' That's how she thinks. She's crippling the economy and she couldn't be more proud.
Telegraph
35 minutes ago
- Telegraph
Reeves is cynically squeezing us dry– without raising taxes
The Chancellor has not had much luck with some of her tax rises. Rachel Reeves was expecting to raise up to £3.2bn each year, or around £12.7bn in this parliament, with the scrapping of non-dom status – a policy announced by her Conservative predecessor Jeremy Hunt and then ramped up by Labour. She is heading for disappointment. With the exodus of more than 10,000 millionaires from the UK last year and an expected 16,000 this year, Reeves has been warned that the move may in fact reduce rather than increase tax receipts. Speculation is thus rife that the measures may be further watered down; there has already been some initial tweaking and softening earlier this year. The imposition of VAT on school fees is likewise now widely expected to raise less than the predicted £1.7bn by 2030, due to more than expected numbers of children transferring to the state sector and becoming a burden on education budgets. The spate of independent school closures – not just as a result of the VAT change but also employer National Insurance rises, the loss of business rate relief for schools with charitable status and the gamut of extra regulation affecting all businesses – will inevitably make this worse. But, ironically, Reeves may have been rather more adept at boosting Treasury revenue with some of the tax measures she did not actually implement. Before last year's Halloween Budget there was much speculation that rates of capital gains tax (CGT) would be brought into line with those for income tax. This would have meant that higher-rate taxpayers earning over £50,270 would have had to pay 40pc instead of 24pc on taxable property gains and 20pc on other assets. Additional rate taxpayers, earning over £125,140, even worried they might be faced with a full 45pc levy on any uplift. The fear that these rates would be aligned was an entirely rational one. The great Conservative chancellor Nigel Lawson in his 1988 Budget had done just that – although the medicine that year was very much sweetened by the scrapping of all income tax rates over 40pc at the same time. Labour's manifesto, while pledging not to raise the rates of income tax or employee National Insurance, was silent about CGT. And after winning the election, Sir Keir Starmer and Reeves never tired of talking up a £22bn 'black hole' the Tories had allegedly left them. This would soon need filling – and Reeves did nothing to dampen down speculation that CGT rises and changes to the pension regime would be how she would achieve at least part of this. In the event, the Chancellor took less drastic action. She raised the rate of CGT for non-property gains from 10pc to 18pc for basic-rate taxpayers and 20pc to 24pc for those on the higher and additional rates. In other words, she aligned the rates for different asset classes to the one already levied on property. But the speculation alone did pay dividends for Reeves. In October last year, the month running up to the Budget, CGT receipts on residential property disposals was £408m – more than double that of most other months in the last tax year. Revenue from CGT is notoriously volatile when compared to other taxes. In the 2023-24 tax year, for example, CGT liabilities were 18pc down from the previous year. But the surge in the run-up to the Budget was vast. The best explanation for the Treasury's October windfall is that residential landlords sold up in advance of a clobbering that did not materialise. As Chris Etherington, of accountants RSM, has noted: 'It is clear that anticipation of CGT changes can distort taxpayer behaviour... the Chancellor benefitted from an inadvertent windfall... Reeves does not necessarily need to increase CGT rates to raise revenues. It's potentially possible to maximise CGT receipts by simply saying very little on the subject.' The Chancellor will insist that she cannot speculate about what moves she will be making in future Budgets – due to such information having an impact on the markets. But that argument does not quite wash. She is more than happy to rule out some fiscal moves, such as raising the rate of income tax. So why not others? Is it too cynical to suggest that Reeves has found her own third way? She can benefit from increased inflows without actually raising taxes. But such tactics are far from victimless – the uncertainty and disruption caused comes at a high price. Additionally, it makes it much more difficult for people to plan for the future and may make them take unnecessary decisions that they will live to regret. In other circumstances, allowing speculation to rip may in fact hurt Treasury coffers. Not closing down current Labour Party debates about a wealth tax will surely mean more wealthy people leaving the UK in anticipation of such a move. This will not only hurt our economy but also mean lower tax yields, resulting in less money for public services.
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