Spending Review 2025: Scotland

Graeme Downie Excerpts

Wednesday 2nd July 2025 Westminster Hall

[Graeme Downie (Dunfermline and Dollar) (Lab)]

I beg to move,

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.

[Jim Shannon (Strangford) (DUP)]

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.

[Graeme Downie]

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.

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.

[Harriet Cross (Gordon and Buchan) (Con)]

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?

[Graeme Downie]

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.

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.

[Sir John Hayes (in the Chair)]

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.

[Graeme Downie]

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.

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.

--- Later in debate ---

[Stephen Gethins]

I absolutely acknowledge the impact that inflation and interest rates have had, and the Liz Truss Budget had a huge impact on small businesses as well as mortgage holders—again, a direct consequence of policies that were made here. I would have thought, and the hon. Lady would surely concede, that one would therefore abandon Conservative spending rules, but we have yet to see that.

Another huge consequence of Conservative rule that Labour has taken over, and that is having a huge impact on small businesses, is leaving the European Union. I want to tackle this head on. I was surprised to hear the hon. Member for Dunfermline and Dollar talk about foreign embassies, when he knows fine well that the Welsh, the Northern Irish and the Scots have overseas representative offices. I was astonished to hear him seek to embrace the insularity that I associate with the Conservative party and Reform. Scotland has one of the highest rates of foreign direct investment anywhere in the UK, and we can all encourage and be happy about that.

I agree with the hon. Member about ferry connections, and he was right to highlight the work done on that by his predecessor, Douglas Chapman. Surely, we should encourage connectivity with the rest of the European Union, but Labour continues to follow the Conservatives’ mantra of a hard Brexit.

[Graeme Downie]

rose—

[Stephen Gethins]

Labour Mayor Sadiq Khan says that Brexit is costing the Exchequer £40 billion, so before I bring the hon. Member in—I will do so, because he was very fair—I want to ask the Minister this: if it is costing the Exchequer £40 billion, what impact is it having on the devolution settlement?

[Graeme Downie]

Just to clarify, there was a ferry from Rosyth to Europe when the SNP was in power. The SNP failed to support it previously, and has taken no action to investigate the legal issues around border control, which are believed by many to be a problem that the Scottish Government could solve. Once again, they have been content to blame the UK Government, without even investigating the problem themselves, when in fact they could have worked constructively either with the previous Conservative Government or with this Government to overcome it.

[Stephen Gethins]

The hon. Member talks about border control. Obviously, I am not in the Scottish Government.

[Graeme Downie]

Not yet!

[Stephen Gethins]

The hon. Member is very kind in apparently conceding next year’s election already. I am quite surprised by that; he may have given up on it, but I think we should all be competing.

The hon. Member talks about the Scottish border. The border is obviously devolved to Westminster, so because we are holding Westminster to account, I ask the Minister to tackle the border issue as well. We are right to have greater connectivity and to be bringing down barriers with our European partners, so why on earth are we not going back into the single market and the customs union? After all, that was the compromise that Scottish Labour itself backed in the Scottish Parliament in the aftermath of the Brexit referendum. What on earth has gone so right that Labour has abandoned that policy and embraced the Conservative policy? I would be astonished to find out, and I wonder whether the Minister can tell us. Some thought and analysis would be helpful.

The real-terms increase in the budget looks like 0.8%—lower than the UK departmental average of 1.5%. That does not sound like much but would mean £1.1 billion less to spend by 2028-29. As I have mentioned to the hon. Member for Caithness, Sutherland and Easter Ross, the Fraser of Allendar Institute has called out Labour MPs’ claims as “neither transparent nor helpful”.

This place matters. As I said, we know that the Scottish Government have a national insurance shortfall as a consequence of the policies being brought in by Westminster, and we have not even got round to last night’s welfare changes, which left the Scottish Labour party high and dry. With the honourable exception of the hon. Member for Glenrothes and Mid Fife (Richard Baker), who, as I understand it, signed the original motion but did not follow through in the debate, Scottish Labour was marched up to the top of the hill by the Prime Minister to be left high and dry.

We were told that the welfare reforms proposed before all the changes yesterday would push 150,000 more people into poverty. A Labour Government pushing more people into poverty—astonishing. Although there have been changes, because of the profound impact on the job of the Scottish Government, whose Scottish child payment is helping to reduce poverty, they are still hampered by what goes on here. If the Minister prioritises nothing else that I have said, I ask her to prioritise this: where are we with the welfare changes and how many people does she now expect to be pushed into poverty?

--- Later in debate ---

[Graeme Downie]

As others have said, Sir John, I thank you very much for your patience this morning. After a previous, similar Westminster Hall debate a number of months ago, a colleague said that chairing it was like being a stranger walking in and trying to moderate a fight at a Scottish wedding. I suspect that is how someone sitting in that Chair feels when these debates happen. I thank everyone for their participation this morning; it has been quite an encouraging debate, and there were even, occasionally, moments of agreement—something that in my experience rarely happens at a Scottish wedding. Occasionally, they agree on “I do”, and not very much more.

I will respond briefly to some of the contributions that were made. I have heard the hon. Member for Caithness, Sutherland and Easter Ross (Jamie Stone) describe the maternity services in his constituency a number of times, and I hope he continues to do so until we finally see a solution there. It is utterly unacceptable that women find themselves in that very dangerous position, and I hope that there is good feeling and good will from the Scottish Government to solve those real problems.

My hon. Friend the Member for Glasgow North (Martin Rhodes) discussed Glasgow’s potential. As someone who was born in Edinburgh and now lives in Fife, I have to say that the east coast obviously has much greater potential, but I am happy for Glasgow to come a close second.

As ever, it was good to hear the hon. Member for Arbroath and Broughty Ferry (Stephen Gethins), whom I have known for a number of years. It is always interesting to listen to him, and it was good to hear the latest stump speech for his campaign in Dundee next year.

My hon. Friends the Members for Livingston (Gregor Poynton) and for Glenrothes and Mid Fife (Richard Baker) highlighted problems around GP surgeries—again, a failure of the SNP. As I mentioned in my speech, we have seen the same in Kincardine in my constituency. My hon. Friend the Member for Paisley and Renfrewshire North (Alison Taylor) shared an interest in the potential of aviation to create economic growth.

I was delighted to hear from the Minister that more will be done on the defence growth deal. I ask her in particular to consider the potential of Fife in those discussions, so that we are providing opportunities for young people around skills, which Fife can provide in defence and related sectors, such as renewable energy and other technical skills. Again, the Scottish Government have not really established their credentials on providing the right technical skills, which people in many of our communities want in order to fulfil their potential.

Finally, I was particularly pleased to hear about the meeting that could take place as soon as next week about the Rosyth to Dunkirk ferry. I genuinely believe that there is good will to find a solution. It is frustrating that it has taken so long and that previous Governments were unable to get together; that harks back to the need to reset the relationship. We can build solutions, and there should not be barriers.

I thank everyone for participating, and thank you again, Sir John.

Question put and agreed to.

Resolved,

That this House has considered the impact of the Spending Review 2025 on Scotland.