Rachel Reeves pledges ‘largest settlement since devolution’ for Scotland

Key Points

The chancellor promised a £52bn settlement for Scotland.
The UK Government will support the Acorn project, a major carbon capture and storage scheme in Aberdeenshire.
Reeves confirmed that defence spending will rise to 2.6% by April 2027.
Reeves said the UK Government will be ending the use of hotels to house asylum seekers in this Parliament.
Westminster will invest £2bn in ‘homegrown AI’ as part of the Government’s AI action plan.
Police spending power will also rise by 2.3% a year in real terms over the review period.
The NHS will see a 3% annual spending increase, or £29m over the next three years.
The Scottish Government will be looking at these announcements and trying to understand what they mean for Scotland.

The chancellor pledged the “largest settlement since devolution” for Scotland as part of the UK Government’s major spending review on Wednesday.

Rachel Reeves promised £52bn for Scotland, £20bn for Northern Ireland by the end of the spending review period, and £23bn for Wales.

Reeves delivered her first multi-year spending review settlement as chancellor, and the first from a Labour government since the 2000s, on Wednesday.

She announced significant increases in funding for the NHS, defence, education, and housing across the nation.

The chancellor also confirmed that the Government will support the Acorn project, a major carbon capture and storage scheme in Aberdeenshire.

In her statement, Reeves said: “These are investments to make sure the towns and cities which powered our last industrial revolution will play their part in our next industrial revolution, to reduce our reliance on overseas oil and gas and protect working families from price shocks.

“A new generation of energy industries – for a renewed Britain. That is my choice. That is Labour’s choice. And that is the choice of the British people.”

Nationally, Reeves confirmed that defence spending will rise to 2.6% by April 2027, as she said Britain will become a “defence industrial superpower”.

The Government has taken the decision to prioritise defence spending by reducing Overseas Development Aid.

She added: “We will make Britain a defence industrial superpower. With the jobs, the skills and the pride that comes with that.”

Reeves also confirmed that the UK Government will be “ending the costly use of hotels to house asylum seekers in this Parliament”.

“The funding that I have provided today, including from the transformation fund, will cut the asylum backlog, hear more appeal cases, and return people who have no right to be here, saving the taxpayer £1bn a year,” the chancellor said.

She added that “homegrown Artificial Intelligence (AI) has the potential to solve diverse and daunting challenges” as well as provide “opportunities for good jobs and investment”.

With that in mind, Reeves announced £2bn worth of investment to “back this Government’s AI action plan”, which will be overseen by the secretary of state for science and technology.

The Government’s £39 billion spending on affordable and social homes has also been confirmed by the chancellor, as she said she wanted to ensure people had the “security of a proper home”.

The chancellor also announced “record” new investment of £29m in the “day to day running” of the NHS over the next three years – she said that’s an increase of 3% per year.

She plans to increase the NHS technology budget by almost 50% and invest £10bn to bring the “analogue” NHS systems “into the digital age” – including the introduction of an NHS app.

This announcement won’t directly impact NHS Scotland, which is devolved to Holyrood, but it will impact the amount of cash that Scotland gets for its health services.

Police spending power will also rise by 2.3% a year in real terms over the review period, providing more than £2 billion for police forces.

Amidst all these investment announcements, Reeves said the Government has found savings with the closure of buildings, sale of land, reducing consultancy spend, and through reforms.

She said: “Reforms that will make public services more efficient, more productive and more focused on the user. I have been relentless in driving out inefficiencies. I will be ruthless in calling out waste with every penny being reinvested back into public services.”

More to follow.