UK Government invests in Edinburgh and Glasgow in ‘breathing room’ Budget

Edinburgh and Glasgow are set to receive millions of pounds from the UK Government as part of its efforts to bolster high growth industries across the UK.

Announcing the Budget, Chancellor John Healey confirmed £18m will go to the UK Advanced Chip Design Academy led by the University of Edinburgh.

A further £6m is set to be invested in Glasgow’s Scottish Event Campus (SEC), subject to business case. This money will be used to expand the venue.

The chancellor also said his Budget will deliver “breathing room” for families and businesses, announcing action to reduce energy bills including the scrapping of gas standing charges next year, the extension of VAT relief on electricity bills, and the removal of the tariff on kerosene.

But the SNP has accused the UK Government of not “doing anywhere near enough” in the face of the cost-of-living crisis.

The Scottish Government is set to receive an extra £600m in its block grant between 2026-27 and 2029-30, which it can spend on devolved areas as it sees fit.

Healey also announced households in England living in properties rated in council tax bands A to D would receive a £100 energy payment this winter – and he urged the Scottish Government to “do the same” with the cash they receive as a result of the spend south of the border.

Other measures announced by the chancellor impacting Scotland are a new Energy Wealth Fund to support clean energy; fully funding the £15bn Defence Investment Plan; increases to the minimum wage; and removing tariffs on over 100 food products. 

Healey said the budget – his first as chancellor – was “for the working people of Britain” and would deliver “hope” for the future despite “global economic storms”. 

Scottish Secretary Douglas Alexander said the measures were “not just easing the pressure today” but “building Scotland’s future”

He said: “This is a budget that puts money back in the pockets of Scottish households, backs businesses, and puts Scotland firmly at the heart of the UK Government’s plan for growth and reindustrialisation.”

Scottish Labour leader Michael Marra has urged Scottish ministers to pass on the cash for the energy payment to households in Scotland. 

He said: “Over 1.8 million households in Scotland would be eligible for the household energy payment if the SNP passes it on. That money should be used to give Scots breathing space, not to plug holes in the Scottish Government Budget.”

The Scottish Government will set out its own Budget for the next financial year in early December.

SNP economy spokesperson Kirsty Blackman MP said: “The UK Budget shows the Labour government doesn't get Scotland - and isn't doing anywhere near enough to protect people from the looming cost of living emergency this winter.

“This isn't a budget that a Scottish chancellor would have delivered. Instead of providing meaningful help, it has abandoned families in the face of soaring bills and has imposed another betrayal on Scotland's energy - with the decision to scrap Scottish carbon capture funding.”

The Budget commitment on defence spending means £200m is to be taken from carbon capture capital grants. The prioritisation of projects elsewhere in the UK means the commitment to Acorn in the north-east of Scotland remains unclear.

Russell Borthwick, chief executive at Aberdeen & Grampian Chamber of Commerce, said: “This is yet another hammer blow for the north-east Scotland economy and comes only a year since former energy secretary Ed Miliband said the UK Government would put ‘its money where its mouth is’ and back the Acorn Project, protecting 15,000 North Sea jobs. All talk, no action, like so much of the transition we were promised by this government.

“This is an abject betrayal of that commitment and, yet again, communities across our region, which has powered the UK’s energy and economic security for decades, are left to face the consequences of inaction and indifference from our political class.”