Spending Review 2025: Scotland

Andrew Bowie Excerpts

Wednesday 2nd July 2025 Westminster Hall

[Andrew Bowie (West Aberdeenshire and Kincardine) (Con)]

It is an absolute pleasure to serve under your chairmanship today, Sir John, and I thank you for your patience and indulgence in chairing this debate.

It is almost a through-the-looking-glass moment this morning, listening to the Labour party criticising the Scottish Government for their decisions and the Scottish National party representative, the hon. Member for Arbroath and Broughty Ferry (Stephen Gethins), criticising the Labour Government for the SNP’s decisions. For all of us, it has been an interesting morning after the night before.

Scotland is struggling with the consequences of the Labour Government’s economic incompetence: taxes for businesses up, growth down, unemployment up and business confidence down. Scottish Financial Enterprise has warned:

“The current inflationary pressures, coupled with stagnant productivity and increasing levels of tax, pose significant headwinds to business investment.”

And that was before the charade—the farcical scenes—that we saw yesterday, which will inevitably mean more tax rises coming down the tracks in the autumn.

[Richard Baker]

Is it not the reality that economic growth is increasing under this Labour Government, in rather sharp contrast to the experiences of hon. Members under Liz Truss, which I think were somewhat different for the whole country, including Scotland?

--- Later in debate ---

[Andrew Bowie]

The hon. Member will recall that when the Conservative Government left office in July 2024, we had the fastest growing economy in the G7. He will also surely acknowledge that as a direct result of decisions taken by his Chancellor and his Government, growth has halved since Labour got into power. That is not a record of which he should be proud. Labour is growing the economy by far less than we had expected to grow the economy by when we left office. Surely he can acknowledge, because his name was on an amendment yesterday, that some of the decisions taken by his Government have been to the detriment of this country and its economic growth.

Hon. Members should not take my word for it. Unite the Union has said that this Government have placed the oil and gas industry on a “cliff edge”. The Scotch Whisky Association said the increase in spirits duty was a “hammer blow”. The Scottish Hospitality Group called the Budget last year

“a blow to businesses across the country”.

The National Farmers Union of Scotland has made it clear that this Government’s decisions will cause “huge difficulties” to the agricultural sector in Scotland, because the family farms tax is devastating farms in Scotland. This is a Government who do not understand rural Scotland, and they clearly do not care to.

National insurance contributions are up, increasing costs to businesses across the country. In my constituency of West Aberdeenshire and Kincardine, the conversations that I have had since the Chancellor’s disastrous Budget last October have revolved around reducing headcount and reducing ambition for expansion, which I know is an experience shared by just about every Member of this Parliament. With the Government’s Employment Rights Bill coming down the tracks, we will see the burden on businesses increase still further and growth shrink.

Business confidence across the entire United Kingdom is falling dramatically, and that is especially the case in Scotland. This Labour Government do not understand business and they have decided not to prioritise growth or prosperity. The chief executive of Scottish Financial Enterprise was right to urge recognition that the UK Government cannot tax their way to economic growth and sustainable growth.

As for the Scottish Government, the SNP has presided over 17 years of mismanagement during its tenure. Economic growth in Scotland has been consistently lower than it has been south of the border. There is no excuse. Higher income tax rates are driving away talent, there is a failure to pass on the savings from business rates, and there have been madcap schemes that undermine the UK internal market, such as the ill-conceived deposit return scheme. At every turn, the Scottish Government seek to make business in Scotland less profitable, less productive and less competitive.

Now, on top of all that, we have to add the spending review from this UK Government, which, the Scottish Hospitality Group declared does “absolutely nothing” to support its sector. The Federation of Small Businesses said that the spending review

“was not the business-focused day”

that it had hoped for. Unite the Union said that the spending review

“lacks the vision to deliver the fundamental change needed for everyday people”

and that it was a

“missed opportunity to lay out the funding to tackle key issues, including the energy costs crippling British industry”.

It is clear that this Chancellor’s spending review does not deliver for Scots, Scotland or Scottish business.

Although we welcome the Government’s commitment to defence and spending on new nuclear, it is evident that rural Scotland—aspirational Scotland—is being ignored, overlooked and left behind by the socialist Government in London and wilfully driven into the ground by a nationalist Government in Edinburgh. The Fraser of Allander Institute has described the spending review as a “rollercoaster”, with short-term boosts followed by real-terms cuts in later years.

We welcome the Government’s commitment to increase defence spending. In a time of increasing uncertainty, it is essential that we have the domestic capacity, supply chain, resources and skilled personnel to defend this country. The continued investment in the Dreadnought-class submarines is essential, and I am incredibly proud that this fleet is hosted in Scotland, at HM Naval Base Clyde. Just last week I was in Rosyth, in the constituency of the hon. Member for Dunfermline and Dollar (Graeme Downie), to see the missile tubes for the Dreadnought-class submarines and the Columbia-class submarines for the United States being constructed by the incredibly skilled workforce at that Babcock yard. This programme is expected to support thousands of jobs in Scotland.

However, serious questions about defence spending remain unanswered. The Government have still not clarified whether the Chagos deal moneys will be classified as defence spending, and they have given no indication of how they will reach the 3% and now 5% commitment to defence spending overall. After yesterday’s farcical scenes, which failed to save the Government any money whatsoever, we have no idea how they will meet the commitments signed up to at NATO just last week.

The oil and gas industry, which is incredibly important to my part of the country, has been let down year after year by the Scottish nationalists, who had a policy of presumption against new oil and gas. If left to the SNP Government, they would have shut down the industry yesterday—and it looks like, with the Labour party in charge, they will get their way. By increasing the energy profits levy, removing investment allowances and abolishing new exploration licences, this Government have signalled that the North sea is uninvestable and the oil and gas industry in Scotland is closed for business.

This industry is vital to the economy of Scotland and the United Kingdom, with a supply chain spanning the entire country and with roots in every single constituency. But this Government’s total ignorance of the oil and gas industry and the north-east of Scotland, their incompetence on the economy and their disregard for the hundreds of thousands of workers in the North sea, as well as their dangerous ineptitude when it comes to our energy security, are deeply damaging.

I turn to the trumpeted invention of the Secretary of State for Energy Security and Net Zero, Great British Energy. I find it difficult to muster any enthusiasm or optimism. With the ongoing ambiguity over the company’s purpose and scope, the Government still cannot answer the basic question of what on earth this organisation is going to achieve, how many people it will employ and what it will do in the long run. While we welcome the announcement of an award to Rolls-Royce for the delivery of small modular reactors following the down-selection process that I proudly launched when in government, we regret deeply that the Scottish nationalists’ luddite opposition to new nuclear—to clean power and to opportunity for Scotland—means that those benefits will not be seen north of the border.

There are some positive notes. Confirmation that Edinburgh University will host the UK’s most powerful supercomputer, paving the way for leadership in artificial intelligence and computing, is welcome, but this followed a delay of almost a year, after the Labour Government announced the cancellation of the project, which was unveiled by the Conservative Government just last year.

Thank you, Sir John, for your patience and indulgence this morning. I, along with many Scots, am bitterly disappointed. Scotland has been let down for 17 years by a failing nationalist Government in Edinburgh, and now it is being severely let down by a Labour Government here in London as well.