Chancellor Rachel Reeves this week pledged a new era of security and national renewal as she delivered a Spring Statement to kickstart economic growth, protect working people and keep Britain safe.
Scottish Secretary Ian Murray has welcomed her measures, including a £2.2 billion increase in the UK-wide defence budget for 2025-26, on top of £2.9 billion announced at Autumn Budget.
Mr Murray said:
We are living in an increasingly insecure world, and the extra £2.2 billion for defence – on top of the £2.9 billion announced at Autumn Budget – will make Britain stronger and safer. This is a huge boost for Scotland’s world-leading defence sector, which delivers Scottish economic growth and more highly-skilled jobs. The increase will also mean better homes for our military personnel and families, including the thousands based in Scotland.
Today’s announcements underpin the great strides being made by the UK Government in achieving stability in our public finances. There have been three interest rate cuts since the general election. Next week the increase in the minimum wage will mean a pay rise for hundreds of thousands of workers in Scotland and our employment rights legislation will deliver the biggest upgrade in workers’ rights in a generation.
The Spring Statement also delivered an extra £28 million for the Scottish Government. That is on top of their £4.9 billion extra from the budget, creating a record £47.7 billion settlement for 25/26, announced at the Autumn Budget. This is the biggest budget settlement in the history of devolution and an end to austerity. The Scottish Government must now use that wisely – to improve Scotland’s failing public services.”
This latest defence boost builds on the Chancellor’s recent visit to Babcock in Rosyth where she also announced that UK defence exporters would benefit from a £2 billion increase to UK Export Finance lending capacity.
Her Spring Statement underlines that growth is at the heart of the UK Government’s Plan for Change with £13 billion of additional capital spend allocated alongside the defence funding boost.
It follows the Budget in the autumn where it was announced that the Scottish Government will be provided with a £47.7 billion settlement in 2025/26 – the largest in real terms in the history of devolution. This includes an additional £3.4 billion through the Barnett formula, with £2.8 billion for day-to-day spending and £610 million for capital investment.
The measures announced this week top up these Barnett consequentials by a further £28 million in 2025/26.
The Scottish Government continues to receive over 20% more per person than equivalent UK Government spending in the rest of the UK, translating into over £8.5 billion more in 2025-26. Block Grant funding from 2026-27 onwards will be confirmed at Phase 2 of the Spending Review, which concludes on 11 June 2025. The Chief Secretary to the Treasury will meet with his counterparts from the devolved governments to discuss their priorities ahead of its conclusion.
