The latest Scottish GDP stats were published yesterday here for the month of June and here for Q2 of 2024.
Responding to the latest figures, Scottish Secretary Ian Murray said: “Scotland is critical in the UK Government’s mission for economic growth, as the Chancellor underlines today in Glasgow where she’ll meet with key members of the business community to turbocharge Scotland’s regeneration.
“Rebuilding is at the root of everything we do but the £22billion black hole in spending left by the previous government – the worst economic inheritance of any incoming government since the Second World War – means that tough decisions are ahead to achieve stability.
“We are making work pay, ensuring the national minimum wage is a true living wage. And with the end of exploitative zero-hours contracts, workers will have increased job security.
“Backed by £8.3bn of UK Government investment, Scottish-based GB Energy will bring jobs and opportunity for all parts of the UK and trade talks have resumed globally to forge stronger links with our international business partners.”
Scotland’s onshore GDP is estimated to have fallen by 0.3% in June. This follows growth of 0.2% in May.
In the three months to June (Quarter 2), GDP is estimated to have grown by 0.6% compared to the previous three month period (Quarter 1). This is a slight increase on the Quarter 1 growth rate of 0.5%.
Thank you. And can I first express my sincere condolences for the shocking attack in Solingen last week. Our country knows what it’s like to suffer such senseless and despicable acts and our thoughts are with all the families affected by this terrible event.
And Olaf – thank you. It’s fantastic to be with you here in Berlin.
Not, alas, my first visit here as Prime Minister. Football, it turns out…
Decided to visit it’s second home in Spain, this time. But anyway – it was still an incredible experience…
And a showcase for the fantastic hospitality of this great nation.
So thank you for hosting yet another episode in English footballing trauma! I’ve been through a lot.
Anyway – I’m delighted to be back at this moment of opportunity for our two countries.
Olaf – on every occasion we’ve met, we’ve talked about our ambitions for the future. Our values of security, prosperity, respect and our shared determination to harness the power of government for the service of working people.
That is what we are doing today.
A new UK-Germany Treaty. A once in a generation chance to deliver for working people in Britain and in Germany.
A new agreement… A testament to the depth and potential of our relationship.
With deeper links on science, technology, development, people, businesses, culture.
A boost to our trading relations.
Germany – of course, already the UK’s second largest trading partner in the world. And through that – a chance to create jobs here and in the UK and deliver that most precious of goods, for both our countries … Economic growth.
Let me be clear – growth is the number one mission of my Government.
And what we understand, clearly is that building relationships with our partners – here in Germany and across Europe is vital to achieving it.
That is what our agreement today represents – the chance that we have.
We’ll also deepen cooperation on shared social challenges. For example, on illegal migration. Because we cannot smash the smuggling gangs who perpetrate this vile trade without the help of our partners.
And I’m really glad that we had substantive discussions today about how we tackle the smuggling gangs and agreed to develop a joint action plan to tackle illegal migration.
So we will renew our commitment to the Calais Group – enhance our intelligence sharing on organised immigration crime. but also – increase collaboration on tackling climate change.
An important goal for the planet, of course for greater energy security, but also – for tackling the drivers of challenges like illegal migration at source.
And finally – at the heart of this Treaty will be a new Defence Agreement. An agreement that builds upon our already formidable defence co-operation but which expands that relationship to face the threats of a volatile world, together.
That of course means a shared resolve to stand up for the security of our people and the wider European continent.
And that begins with our unyielding support for Ukraine – we discussed that in some detail today.
Because, as Europe’s largest contributors to Ukraine’s war efforts, and as the nations with the highest defence expenditure among European countries in NATO, we know only too well the debt we owe to the Ukrainian people who fight not just to defend themselves, but for all the people of Europe.
So today – we reaffirmed our commitment to stand with Ukraine for as long as it takes. We also share a common commitment to resolve the crisis in the Middle East, and agree on:
…Israel’s right to self-defence, in compliance with International Humanitarian Law…
…the need for de-escalation across the region; and for restraint and caution to be exercised…
Unfettered humanitarian access into Gaza…
…agreement to a ceasefire and release of all hostages…
…and the importance of working together towards a political solution based on the creation of a Palestinian State alongside a safe and secure Israel.
The only way to provide long-term peace and security for both Israelis and Palestinians.
That of course – is not an easy goal. But it is one that we are committed to pursuing, together.
Because – as today shows – Britain can advance its interests much more effectively when we stand with our friends and partners.
This Treaty is part of a wider reset – grounded in a new spirit of co-operation… with our shared understanding that this will be developed at pace and that we hope to have agreed it by the end of the year.
A Britain reconnected… Resetting our relationships… Rediscovering our common interest…Delivering for working people.
Britain and Germany already have an incredible relationship. We invest billions in each other’s countries. Thousands and thousands of jobs are supported through trade.
And every year, millions of people travel between our two countries; exchanging ideas, collaborating, creating and connecting. But today – we build on that … A bright new future for UK-German relations.
Two great countries – brought closer together than ever before. The strongest strategic partners in Europe and on the world stage.
Rachel Reeves to bang the drum for Britain in visit to New York City and Toronto this week.
Chancellor to share her vision for growth and champion UK sectoral strengths across financial services, clean energy and infrastructure to investors and CEOs.
Trip to build momentum for the International Investment Summit on 14 October.
Chancellor Rachel Reeves has visited New York and Toronto this week with the message that Britain is open for business.
She met with CEOs and senior representatives from major players across the US and Canada’s foremost industries, highlighting that early steps taken by the government to fix the foundations and restore economic stability makes the UK an attractive destination for investment.
Chancellor of the Exchequer Rachel Reeves:“I’ve wasted no time in my first month in office in taking the difficult decisions necessary to fix the foundations of our economy, so we can rebuild Britain and make every part of the country better off.
“That means restoring economic stability so we can attract the investment needed to create good jobs, boost wages, and improve opportunity across Britain.
“There is no credible plan for growth without private sector investment. That’s why I’m breaking down barriers at home and banging the drum for Britain abroad as we gear up to host the International Investment Summit.”
While in New York, the UK’s first female Chancellor of the Exchequer met with Wall Street leaders and host a reception to celebrate women in finance.
The US is the UK’s biggest financial services trading partner, with UK exports to the US valued at £23.4bn annually. The sector is at the heart of the government’s core mission to deliver sustainable economic growth as a jewel in the crown of the UK economy and one of its success stories, contributing almost 10% of UK GVA and employing 1.2 million people.
In Toronto, the Chancellor met with names in the world of clean energy and infrastructure. The government’s mission to make Britain a Clean Energy Superpower will bring opportunities for economic growth whilst helping the UK meet its target of clean power by 2030.
That mission has started in earnest with the creation of Great British Energy to partner with the private sector and secure the investment needed to accelerate the transition, the sweeping away of barriers to onshore wind farms, and a record £1.5 billion budget for this year’s renewable energy auction to get Britain building green.
During her time in the US and Canada, Reeves has pointed out that the government has moved quickly to create a stable environment where businesses have the confidence to invest in the UK.
This has included reform of a planning system that has long frustrated investment, ending the ban on on-shore wind and the establishment of a National Wealth Fund, backed by £7.3 billion to catalyse further private investment in our world-leading green and growth industries of the future.
The UK is already Europe’s leading hub for investment, with UK markets raising more capital than the next two highest European exchanges combined in 2023.
The Chancellor visited North America with a renewed purpose to build upon this, with it being announced yesterday that Britain is to play host to the International Investment Summit on 14 October.
In doing so, Ms Reeves is looking to deepen the strong economic relationship between Britain and the two North American countries.
The United States is the largest source of foreign investment in the UK and the UK is the third largest investment destination for Canadian companies, whom invested more than $73 billion of FDI stock in 2021.
Chancellor launches landmark review to boost investment, increase pension pots and tackle waste in the pensions system.
New Pensions Bill confirmed in King’s Speech could boost pension pots by over £11,000, with further consolidation and broader investment strategies to potentially deliver higher returns for pensions.
An investment shift in defined contribution schemes could deliver £8 billion of new productive investment into the UK economy.
Action will be taken to unleash the full investment might of the £360 billion Local Government Pension Scheme to make it an engine for UK growth.
The Chancellor Rachel Reeves has announced a landmark pensions review as part of the new Government’s mission to ‘boost growth and make every part of Britain better off’.
Under plans unveiled by the new Chancellor, billions of pounds of investment could be unlocked in the UK economy from defined contribution schemes alone and pension pots for savers in defined contribution schemes could be boosted by over £11,000.
The Review will also, working closely with the Minister of State at MHCLG, look at how to unlock the investment potential of the £360 billion Local Government Pensions Scheme, which manages the savings of those working to deliver our vital local services, as well as how to tackle the £2 billion that is being spent on fees.
The announcement comes ahead of the first Growth Mission Board on Tuesday. This will be chaired by the Chancellor and drive the Government’s work to achieve the highest sustained growth in the G7. New measures have already been announced to fix the planning system, the creation of a new National Wealth Fund and the overhaul of the listings regime to boost UK stock exchanges.
The work announced today – focusing on investment – is the first phase in reviewing the pensions landscape and will be led by the first ever joint Treasury and Department for Work and Pensions Minister, Emma Reynolds (Minister for Pensions). The next phase of the review starting later this year will consider further steps to improve pension outcomes and increase investment in UK markets, including assessing retirement adequacy.
The Chancellor and the Pensions Minister will chair a roundtable with the pensions industry on Monday to start intensive industry engagement for the Review.
Chancellor of the Exchequer Rachel Reeves said: “Despite a very challenging inheritance, this new Government is getting on with the job of delivering our mandate to get the economy growing so we can make every part of our country better off.
“The review we are announcing is the latest in a big bang of reforms to unlock growth, boost investment and deliver savings for pensioners. There is no time to waste. That is why I am determined to fix the foundations of our economy so we can rebuild Britain and improve people’s lives.”
Deputy Prime Minister Angela Rayner said: “After putting in years of hard graft serving their communities, the very least our frontline workers deserve – millions of whom are low paid, millions of whom are women – is dignity and security in retirement.
“That’s why we want to make sure their hard-earned money works harder for them so we ensure they receive the pensions they have earned, whilst unlocking growth across our economy.”
Pensions Minister Emma Reynolds said: “As the first ever joint Treasury and DWP Minister I am uniquely placed to tackle the twin challenges of productive investment and retirement outcomes.
“Over the next few months the review will focus on identifying any further actions to drive investment that could be taken forward in the Pension Schemes Bill before then exploring long-term challenges to ensure our pensions system is fit for the future.
“There is so much untapped potential in our pensions markets, with an industry worth around £2 trillion. The measures we have already set out in our Pension Schemes Bill will help drive higher investment and a better deal for our future pensioners.”
M&G plc CEO Andrea Rossi said: “A Pensions Review is long overdue and to be welcomed. M&G has a rich heritage of investing in the UK and there are significant opportunities ahead to give the real economy a boost over the next decade and beyond.
“We know from experience, through our PruFund offer, that a large pooled fund gives savers access to a wider range of productive assets that aims to maximise benefits over the long-term. Consolidation, combined with the role of advice, has huge potential to align the interests of savers with the UK’s growth ambition. We look forward to supporting the Government on this landmark review.”
BVCA Chief Executive Michael Moore said: “We are very encouraged that the Government has brought forward their Pensions Review so quickly.
“The Chancellor has a real opportunity to deliver economic growth by facilitating increased investment in UK businesses to the benefit of returns to pension savers as well as the wider economy.
“Legislative and policy changes, including further consolidation of pension schemes to increase pension schemes’ ability to deploy capital into UK private capital funds are vital, as is greater industry partnership.
“The BVCA’s Investment Compact has already brought together over 100 growth equity and venture capital firms committed to working with pensions schemes to consider effective structures that attract investment.”
Defined contribution schemes will be managing around £800 billion in assets by the end of the decade and the Review will explore ways to increase their investment into productive assets. Even a 1 percentage point shift of assets into productive investments could mean £8 billion of new productive investment to grow the economy and build vital infrastructure by the end of the decade.
This would also help savers using these schemes build up better retirement pots as productive assets are more likely to provide higher returns. Immediate action has already been taken to boost retirement savings through the Pensions Bill, which introduces a Value for Money Framework to promote better governance and achieve higher returns – boosting the pension pot of an average earner who saves over their lifetime in a defined contribution scheme by over £11,000.
The first stage of the review will examine actions to support greater productive investment and better retirement outcomes, including through further consolidation and encouraging at-scale schemes to increase returns through broader investment strategies.
The Local Government Pension Scheme (LGPS) in England and Wales is the seventh largest pension fund in the world, managing £360 billion worth of assets. Its value comes from the hard work and dedication of 6.6 million people in our public sector, mostly low-paid women, working to deliver our vital local services. Pooling this money would enable the funds to invest in a wider range of UK assets and the government will consider legislating to mandate pooling if insufficient progress is made by March 2025.
To cut down on fragmentation and waste in the LGPS, which spends around £2 billion each year on fees and costs and is split across 87 funds – an increase in fees of 70% since 2017, the Review will also consider the benefits of further consolidation.
The first stage of the review will report in the next few months and consider further measures to support the Pensions Bill. It will take account of the need to prioritise gilt market stability, liquidity and diversity. It will then broaden out to consider the wider pensions landscape to strengthen security in retirement. In the meantime, immediate action has been taken through new laws announced to Parliament in The King’s Speech.
Barclays CEO C. S. Venkatakrishnan said: “We welcome the Government’s timely review of the pensions sector.
“Pensions reforms are critical to unlocking institutional investment in growth equity, and alongside a streamlining of listing requirements, will give a significant boost to UK capital markets and growth. Building institutional demand is also an important signal in encouraging private share ownership.
Border to Coast CEO Rachel Elwell said: ““Our focus is on delivering a strong and sustainable LGPS to enable it to pay the pensions of the 6.6million local government workers in an affordable manner.
“Border to Coast has developed innovative and cost-effective investments, while cutting Private Market fees by almost 30%. There is an opportunity to build and expand on this, delivering greater value to local taxpayers, and delivering productive investment in the UK. We therefore welcome the opportunity to work with the Government on a co-ordinated review to deliver this.
“If the Government is ambitious and considers a wide range of options in this review we are optimistic that this will deliver the clear roadmap we have called for, building on the work of the BVCA’s Pensions and Private Capital Expert Panel.”
Chair of the Pensions & Private Capital Expert Panel and co-founder of IQ Capital Kerry Baldwin said: “An early and ambitious review of the pensions landscape is an extremely important step in prioritising returns for UK savers and driving economic growth.
“The Chancellor’s Pensions Review will add further impetus to the work of the Investment Compact for Venture Capital and Growth Equity, which has brought together the private capital and pensions industries to support pension savers and to encourage investment from pension funds into unlisted equities.
“There has been significant progress through this collaboration. We are already developing a greater understanding of the ways we can work together to deliver new options for UK pension savers at the same time as supporting high growth, innovative UK companies with new sources of capital.
“The Review offers us the opportunity to develop this shared agenda further and deliver better outcomes for all the stakeholders.”
TheCityUK CEO Miles Celic said: “Creating the right investment environment is critical both for improving people’s retirement incomes and for boosting growth across the UK.
“The government’s new Pensions Review will be an important mechanism to help deliver this. We look forward to working closely with government and regulators to ensure that an effective long-term strategy that supports financial resilience is developed.”
Chancellor pledges she will take action to fix the foundations of the economy to make everyone, not just a few, better off.
Government to get Britain building by taking immediate action on planning reform and unblocking stalled sites to unlock thousands of homes.
Immediate removal of the de facto ban on onshore wind in England as government starts delivering on clean energy mission to cut bills for families and boost energy independence.
The Chancellor yesterday (8 July) promised to take immediate action to fix the foundations of the economy, rebuild Britain and make every part of the country better off.
In her first speech as Chancellor, Rachel Reeves pledged to leaders of some of the UK’s pioneering industries to build growth on strong and secure foundations built on stability, investment and reform, and forged through a new partnership with the private sector.
Addressing the difficult economic inheritance this government faces, she committed to taking immediate action to drive sustained economic growth, the only route to improving the prosperity of our country and the living standards of working people.
Setting out her first steps to deliver on the government’s commitments in its manifesto that every action it takes will be based on sound money and economy stability, the Chancellor promised a new economic model that will grow the economy and keep taxes, inflation and mortgages as low as possible.
The Chancellor said had the UK economy grown at the average rate of OECD economies over the fourteen years from 2010, it would be £143.3 billion larger – worth £5,053 for every household in the country. This could have brought in an additional £58 billion in tax revenues in the last year alone to sustain our public services.
Taking decisive action, the government is today announcing a series of measures to lay the foundations for a dynamic, modern and growing economy, including taking urgent steps to build 1.5 million homes over the next five years and the immediate removal of the de facto ban on onshore wind in England, as part of its clean energy mission.
Chancellor of the Exchequer Rachel Reeves said:“Today I am taking immediate action to fix Britain’s economic foundations.
“By growing our economy we can rebuild Britain and make every part of the country better off.”
Deputy Prime Minister Angela Rayner said: ““Our country is under new management and a new era for economic growth will be built on secure foundations.
“The Chancellor and I will work in lockstep to kickstart the economy, unleashing housebuilding and powering local growth.
“Change starts now. We will unblock the bottlenecks and drive forward a transformational package to build the homes people need.”
Energy Security and Net Zero Secretary Ed Miliband said:“Every family has paid the price of the ban on onshore wind farms in higher energy bills. This ban has undermined our energy security, put costs on people’s bills – especially those on lower incomes – and held us back in our fight against climate change.
“This Government is wasting no time in delivering the bold plan we need to take back control of our energy; boosting our energy independence and cutting bills for families as we tackle the climate crisis.
“Getting rid of this ban and giving priority for planning permission for much needed infrastructure sends an immediate signal to investors here and around the world that the UK is back in business, an immediate step in our mission to make Britain a clean energy superpower.”
The UK government is taking swift action on its central growth mission by announcing the following:
Planning
The government is taking swift action to identify and unblock key ‘stalled sites’ to get large housing schemes moving forward, starting with four sites across England to unlock over 14,000 homes: Liverpool Central Docks, Northstowe, Worcester Parkway and Langley Sutton Coldfield.
The Chancellor has also welcomed the Deputy Prime Minister’s commitment to make the economic benefit of development a central consideration when intervening in the planning system. This starts today by recovering two appealed planning applications for data centres in Buckinghamshire and Hertfordshire.
To facilitate this new approach, the Deputy Prime Minister will also write to local mayors and the Office for Investment to ensure that any investment opportunity with important planning considerations that comes across their desks is brought to her attention and to the Chancellor’s.
This will help to ensure the planning system can unlock major schemes from clean energy projects and transport infrastructure to film studios and art-entertainment venues.
The Chancellor has also confirmed that the government will support local authorities with 300 additional planning officers across the country.
Further announcements will be made in the coming weeks to accelerate the development of housing and infrastructure, including launching a landmark consultation on an updated, growth-focused National Planning Policy Framework to include mandatory housing targets and a requirement to review greenbelt boundaries where necessary to meet them.
These will prioritise Brownfield and “grey belt” land for development to meet housing targets where needed, partnered with new ‘golden rules’ that will make sure the development this frees up will also deliver thousands of affordable homes, including more for social rent.
Critical major infrastructure
The current planning regime acts as a major brake on economic growth which is why the government will make the changes the country needs to forge ahead with new roads, railways, reservoirs, and other nationally significant infrastructure.
The government will set out new policy intentions for critical infrastructure in the coming months, ahead of updating relevant National Policy Statements within the next 12 months to provide certainty to industry. We will legislate to ensure they are updated at least every 5 years.
The government will also build on the Strategic Spatial Energy Plan which is being developed by the National Energy System Operator to speed up the roll out of clean power, and will seek to expand the use of spatial planning to other infrastructure sectors.
The Chancellor has asked the Secretaries of State for Transport and Energy Security and Net Zero to prioritise taking decisions on critical infrastructure projects which are with them now.
To go further, to help speed up delivery on infrastructure such as transport and energy, the government will review how it can unlock critical infrastructure, without weakening environment protections.
Alongside this, the government will make sure energy projects are prioritised in the planning system and consult on including onshore wind power developments in the Nationally Significant Infrastructure Projects (NSIP) planning regime.
Further details on ending the de facto ban on onshore wind will be set out later by the Department for Energy Security and Net Zero, and the Department for Levelling up, Housing and Communities.
Martha Lane Fox, President of the British Chambers of Commerce, said:“Fixing the foundations of the economy can provide businesses with the stability and certainty they need to unleash a wave of investment to create growth and new jobs.
“Labour’s pledges to create an industrial strategy, improve trade relations with the EU, and boost skills training all have capacity to make a huge difference.
“Today’s commitment to deliver large scale infrastructure at greater pace, especially green energy projects and more housing where people want to live, is very welcome.
“But policy must be backed up with better skilled and resourced planning departments to deliver this step change. That’s why the pledge to fund an extra 300 planning officers is so important.
“It’s also why the BCC’s Planning Skills Fund has been set up in partnership with Government. It will develop an additional pipeline of new and upskilled planning talent to boost growth in our local economies.”
David Thomas, Chief Executive Officer, Barratt Developments’ said:“We welcome the Government’s commitment to reform of the planning system and their drive for growth.
“Building more new homes will bring huge economic and social benefits to the UK, and it is vital that local and central government are united with industry to plan positively to deliver high quality new homes and developments across the country.”
Keith Anderson, Chief Executive Officer, Scottish Power said:“I welcome the clear sense of urgency and direction set out by the Chancellor today.
“Prioritising clean energy infrastructure and building at speed and at scale will unleash strong economic growth across the country.
“If the UK can halve the time it takes to get renewables, electricity grid and storage projects through the planning system, we’ll look to double our investment over the coming years.”
Henrik L. Pedersen, Chief Executive Officer, Associated British Ports said:“Associated British Ports has an ambitious project pipeline of major investments in port infrastructure including supporting the development of floating offshore wind in Wales as well as green hydrogen and carbon capture and storage in the Humber.
“The right enabling measures from Government will unlock these developments at pace. In this regard the Chancellor’s speech is very welcome and encouraging.”
Mark Reynolds, Chairman & Chief Executive Officer, Mace Grop, Co-Chair of the Construction Leadership Council said:“Today’s announcements show a welcome proactive approach to tackling the delays to the planning system that are costing the UK up to £11bn a year in growth and hampering the delivery of the homes and infrastructure we sorely need.
“The focus on cutting the red tape to progress nationally important projects, such as data centres, combined with increased resourcing of the planning departments, will bring a renewed energy and focus to the construction sector.
“It’s particularly welcome to see the Chancellor has put this at the top of her agenda – we stand fully behind the delivery of the Government’s ambitions.”
Kate Kenny, Senior Vice President, Jacobs said:““We greatly welcome the changes outlined by the Chancellor today to simplify the planning regime and unlock greater investment in critical national infrastructure projects.
“The updating of National Policy Statements will also play a major role in providing clarity and certainty of pipeline for industry and its supply chains to invest in the long-term skills required to deliver the clean energy, transport, water and other significant infrastructure projects that the UK requires for a prosperous future.”
Tom Glover, UK Country Chair, RWE said:“We fully support the new government’s focus on unblocking the planning system, and welcome commitments to prioritise taking decisions on critical national infrastructure projects as soon as possible.
“Ensuring that local authorities are properly resourced to deliver a real acceleration in planning approvals is also crucial – we therefore welcome the announcement to fund an additional 300 planning officers.
“As a leading renewables developer we are also pleased that the government are moving swiftly to end the ban of onshore wind, in the long-term this means committing to bring projects over 50MW back into the Nationally Significant Infrastructure Projects (NSIPs) regime. We look forward to further information on this in due course”.
Andrea Rossi, Chief Executive Officer, M&G said:“As a major investor in the real economy we welcome efforts to provide long-term policy certainty and the ambition to get Britain building. Speed and ambition are crucial.
“By providing clarity on infrastructure priorities, combined with a swifter planning system, we can deliver investment, kick-start the economy and secure good returns for UK pension policy holders.”
Chris Cummings, Chief Executive Officer, The Investment Association said:“The Investment Management industry strongly supports the Chancellor’s ambition to drive economic growth. There is more our industry can do to support the UK economy and its people, and we are ready to work with the new government to achieve this.
“Investment is the engine of economic growth, and our industry supports the government in finding innovative ways for more capital to be channelled into thriving British businesses and infrastructure projects. Removing blockers in the planning system will be key to this.
“It is vital we open straightforward ways for pension funds to invest in the housing, transport and energy projects we all rely on by removing regulatory obstacles and overturning the culture of “safetyism” that has curtailed economic growth.”
Rob Perrins, Chief Executive Officer, Berkeley Group said: “We’re hugely encouraged to see the clear priority and focus on housing delivery as part of the Government’s mission for growth.
“Today’s announcements are a very positive start and we will continue to work closely with Government to help unlock the potential of brownfield regeneration sites to deliver good green homes, both affordable and private. Reviving urban land has a vital role to play in driving the sustainable growth and productivity our country needs.”
Nick Jansa, Executive Managing Director EMEA, Ontario Teachers’ Pension Plan said:“We welcome the government’s announcement today on improvements to the planning system and removing barriers to investment in growing the UK’s critical infrastructure.”
Chancellor Rachel Reeves will vow to “fix the foundations of Britain’s economy” to make every part of Britain better off.
In her first major speech, the Chancellor will declare economic growth is “a national mission” and promise to take the tough decisions to deliver on the Government’s mandate.
She is expected to announce swift changes to unblock infrastructure and private investment.
The Government will take the difficult decisions to deliver growth, Rachel Reeves will say in her first speech as Chancellor today.
Business leaders from some of Britain’s most pioneering industries – including its financial services and green industries – are expected to be in attendance in central London to hear Ms Reeves vow to “fix the foundations of our economy so we can rebuild Britain and make every part of our country better off.”
Rachel Reeves will say there is “no time to waste” on delivering change, pledging to reverse “the legacy of fourteen years of chaos and economic irresponsibility”.
The Chancellor is expected to say:““Last week, the British people voted for change. And over the past 72 hours I have begun the work necessary to deliver on that mandate.
“Our manifesto was clear: ‘Sustained economic growth is the only route to improving the prosperity of our country and the living standards of working people.’
“Where governments have been unwilling to take the difficult decisions to deliver growth – or have waited too long to act – I will deliver.
“It is now a national mission. There is no time to waste.
“This morning I want to outline the first steps this new government has taken to fix the foundations of our economy, so we can rebuild Britain and make every part of our country better off.
“We face the legacy of fourteen years of chaos and economic irresponsibility.
“New Treasury analysis I requested over the weekend exposed the opportunities lost from this failure.
“Had the UK economy grown at the average rate of OECD economies since 2010, it would have been over £140 billion larger.
“This could have brought in an additional £58 billion in tax revenues last year alone to sustain our public services.
“It falls to this new Government to fix the foundations.”
EDINBURGH based event and hospitality venue is thriving as it records its most successful business period to date after hitting record numbers during the Edinburgh International Festival
Surgeons Quarter (SQ), one of Edinburgh’s largest Fringe performing spaces, boasted a record 250,000 visitors to the Royal College of Surgeons of Edinburgh’s (RCSEd) campus and increased occupancy to an impressive 99.5% at its on-site, Ten Hill Place Hotel across the month of August.
As the commercial arm of RCSEd, SQ worked closely with renowned festival producers theSpaceUK to host 248 productions across its 11 on site Fringe venues.
Scott Mitchell, Managing Director of SQ said: “The buzz in Edinburgh during the Fringe this year was incredible. To see our venues, and Edinburgh, transform into a hive of creativity and culture was very special.
“Each year we continue to grow and we’re incredibly proud of what we have achieved this year with record numbers coming in.
“Working with such a talented organisation such as theSpaceUK again this year has been extremely rewarding and we’re delighted with how well received each show was at this year’s Fringe.
“This year we have been able to host nearly 250 shows, with 120,000 audience members, which is just incredible. While the numbers are astounding, it is only testament to the quality of entertainment and service of those who performed and worked with us this year.”
Celebrating its 14th year as one of the largest Fringe venues, SQ operated five festival bars, and transformed its Courtyard Bar and Hill Square Gardens into a fiesta of flavour with Mexican street food created by SQ’s Executive Chef Dominik Kawalec.
This year’s line-up included shows from across the globe with musical performances, operas, drama and theatre shows as well as comedy and spoken word.
Surgeons Quarter, Cafe 1305
Scott Mitchell – Managing Director
Scott continued: “None of this would have been possible without our fantastic, dedicated team, who worked incredibly hard to deliver top service across our venues throughout such a busy period.
“Whilst delighted with our increased footfall a key point of action for next year is to find a solution to either the increased recycling or use of re-usable products in an outdoor environment to adhere to our licencing conditions and sustainability agenda.
“I’d like to extend my thanks to not only those who worked with us, but to those who visited our venues and helped create a truly unique atmosphere in a Fringe that will live long in the memory.”
The 2023 Edinburgh Festival Fringe welcomed worldwide audiences, selling nearly 2.5 million tickets across 288 venues.
SQ will now turn its focus to the upcoming festive season, hosting 80s themed party nights throughout December offering a three-course meal, festive cocktail and wine for £60pp, and private parties from £65pp.
Surgeons Quarter promotes, sells and manages all commercial activities held within the RCSEd campus. It includes facilities for conferences, meetings, private events, parties, weddings and its own four-star hotel Ten Hill Place as well as Café 1505 and SQ Travel.
Profits from the Surgeons Quarter portfolio go towards the advancement of surgery and the improvement of patient outcomes worldwide.
More information about Surgeons Quarter can be found at:
Scotland’s notional deficit has continued to fall at a faster pace than the UK’s, driven by record energy sector revenues and strong growth in the tax take, figures for the 2022-23 financial year show.
Total revenue for Scotland increased by 20.7% (£15 billion) compared with 11.3% for the UK as a whole. This includes a £1.9 billion increase in revenue from Scottish income tax and £6.9 billion increase in North Sea revenue. These increases have partially been offset by a rise in spending on cost of living measures and interest payments on UK Government debt.
To mark publication of the 30th Government Expenditure and Revenue Scotland (GERS) statistics, the Cabinet Secretary for Wellbeing Economy, Fair Work and Energy, Neil Gray, visited the University of Glasgow’s Mazumdar-Shaw Advanced Research Centre to learn about the significant economic potential of quantum technology to Scotland’s economy. Recent research has suggested the sector could be worth £1 billion to Scotland by 2030.
Mr Gray said: “I am pleased that Scotland’s finances are improving at a faster rate than the UK as a whole, with revenue driven by Scotland’s progressive approach to income tax and our vibrant energy sector.
“While the record revenues from the North Sea show the extent that the UK continues to benefit from Scotland’s natural wealth, these statistics do not reflect the full benefits of the green economy, with hundreds of millions of pounds in revenue not yet captured.
“It is important to remember that GERS reflects the current constitutional position, with 41% of public expenditure and 64% of tax revenue the responsibility of the UK Government. Indeed, a full £1 billion of our deficit is the direct result of the UK Government’s mismanagement of the public finances.
“An independent Scotland would have the powers to make different choices, with different budgetary results, to best serve Scotland’s interests.
“While we are bound to the UK’s economic model and do not hold all the financial levers needed, we will continue to use all the powers we do have to grow a green wellbeing economy, while making the case that we need independence to enable Scotland to match the economic success of our European neighbours.
“I’m grateful to the University of Glasgow for showing me their world-leading quantum technology research, which could be worth £1 billion to our economy within seven years, highlighting just how bright Scotland’s future could be outside of the UK.”
Government Expenditure & Revenue Scotland figures ‘show Scotland benefits from being part of a strong United Kingdom with a sharing and pooling of resources’
The Scottish Government has published their annual Government Expenditure & Revenue Scotland report, which shows the difference between total revenue and total public sector spending in Scotland.
The figures for 2022-2023 showed that people in Scotland are continuing to benefit from levels of public spending substantially above the United Kingdom average.
And even in a year of exceptional North Sea Revenues, Scotland’s deficit is still more than £19 billion, demonstrating how the country continues to benefit from being part of a strong United Kingdom, with the vital pooling and sharing of resources that the Union brings.
Commenting on the figures, Scottish Secretary Alister Jack said: “The Scottish Government’s own figures show yet again how people in Scotland benefit hugely from being part of a strong United Kingdom.
“Scotland’s deficit is more than £19billion – even in a year of exceptional North Sea Revenues. Without oil and gas, that figure soars to more than £28billion.
“People in Scotland benefit to the tune of £1,521 per person thanks to higher levels of public spending.
“As we face cost of living pressures and unprecedented global challenges it is clear Scotland is better off as part of a strong United Kingdom.”
GERS 2023 – Uptick in oil revenues narrows the gap between Scottish and UK Deficit
Fraser of Allander Institute’s MAIRI SPOWAGE, JOAO SOUSA and CIARA CRUMMEY unpick the latest statistics:
The revenues raised from Scotland, from both devolved and reserved taxation;
Public expenditure for and on behalf of Scotland, again for both devolved and reserved expenditure;
The difference between these two figures, which is called in the publication the “net fiscal balance” – but as you may well hear colloquially referred to as the “deficit”.
These statistics form the backdrop to a key battleground in the constitutional debate, particularly when it is focussed on the fiscal sustainability of an independent Scotland and what different choices Scotland could make in terms of taxation and spending.
So what do the latest statistics show?
The latest figures show that the net fiscal balance for 2022-23 was -£19.1 bn, which represents -9.0% of GDP. This is a fall from the 2021-22 figure of -12.8% of GDP and is down significantly from 2020-21 which was inflated hugely by COVID-related spending.
The comparable UK figure for 2022-23 is -5.2% of GDP. The UK figure is unchanged from 2021-22. The reason for the differential trend for Scotland and the UK as a whole has been driven by North Sea revenue, which contributed £9.4 billion to Scottish revenue in 2022-23.
Chart 1: Scottish and UK net fiscal balance, 1998-99 to 2022-23
Source: Scottish Government
In this year of record North Sea revenue (at least in cash terms), the difference between the Scottish and UK deficit is driven by the expenditure side of the net fiscal balance equation.
Chart 2: Spending and revenue per head, Scotland-UK, 1998-99 to 2022-23
Source: Scottish Government
On revenues, including the North Sea, Scotland raised £696 more per head than the UK, whilst on expenditure, Scotland spent £2,217 more per head than the UK average.
So what do these statistics really tell us?
These statistics reflect the situation of Scotland as part of the current constitutional situation. That is, Scotland as a devolved government as part of the UK. The majority of spending that is carried out to deliver services for the people of Scotland are provided by devolved government (either Scottish Government or Local Government).
To a certain extent therefore, the higher per head spending levels are driven by the way that the funding for devolved services is calculated through the Barnett formula. Add on top of that the higher than population share of reserved social security expenditure, and we have identified the two main reasons for higher public expenditure in Scotland.
Let’s go over some of the main points that may come up today when folks are analysing these statistics.
Scotland isn’t unusual in the UK in running a negative net fiscal balance
This is absolutely right. ONS produce figures for all regions and nations of the UK, and these have shown consistently (in normal years, so excluding COVID times) that outside of London and surrounding areas, most parts of the UK are estimated to raise less revenue than is spent on their behalf.
In 2021, we discussed the differences between parts of the UK in an episode of BBC Radio 4’s More or Less programme.
The Scottish Government doesn’t have a deficit as it has to run a balanced budget
This statement isn’t quite true (the SG now has limited capital borrowing powers and resource borrowing powers to cover forecast error). The Scottish Government’s Budget is funded through the Barnett determined Block Grant, with some adjustments to reflect the devolution of taxes and social security responsibilities (most significantly, income tax).
The SG do not have the flexibility to borrow for discretionary resource spending.
However, to focus on this around the publication of GERS somewhat misses the point of the publication. It looks at money spent on services for the benefit of Scotland, whoever spends it, and compares that to taxes raised, whoever collects them. As touched on above, the Barnett-determined block grant funds services at a higher level per head in Scotland than in England in aggregate.
What does this tell us about independence?
Setting aside the noise that will no doubt accompany GERS today, there are essentially two key issues, that need to be considered together.
GERS takes the current constitutional settlement as given. If the very purpose of independence is to take different choices about the type of economy and society that we live in, then it is possible that these a set of accounts based upon the world today could look different, over the long term, in an independent Scotland.
That said, GERS does provide an accurate picture of where Scotland is in 2023. In doing so it sets the starting point for a discussion about the immediate choices, opportunities and challenges that need to be addressed by those advocating new fiscal arrangements. And here the challenge is stark, with a likely deficit far in excess of the UK as a whole, other comparable countries or that which is deemed to be sustainable in the long-term. It is not enough to say ‘everything will be fine’ or ‘look at this country, they can run a sensible fiscal balance so why can’t Scotland?’. Concrete proposals and ideas are needed.
And please guys… dodge the myths!
We have produced a detailed guide to GERS which goes through the background of the publication and all of the main issues around its production, including some of the odd theories that emerge around it. A few years ago, we also produced a podcast which you can enjoy at your leisure.
In summary though, to go through the main claims usually made about GERS:
GERS is an accredited National Statistics produced by statisticians in the Scottish Government (so is not produced by the UK Government) and is a serious attempt to understand the key fiscal facts under the current constitutional arrangement
Some people look to discredit the veracity of GERS because it relies – in part – on estimation. Estimation is a part of all economic statistics and is not a reason to dismiss the figures as “made up”.
Will the numbers change if you make different reasonable assumptions about the bits of GERS that are estimated? In short, not to any great extent.
If you have any more questions about how revenues and spending are compiled in GERS, the SG publish a very helpful FAQs page, including dealing with issues around company headquarters and the whisky industry.
Look out for more analysis
It’ll be interesting to see the coverage of these statistics today and the talking points that are generated given where we are in the constitutional debate.
If you have any questions about GERS for us, then why not get in touch? Submit them to fraser@strath.ac.uk and we’ll try to cover them in our weekly update later this week!
Deputy First Minister outlines priorities for sustainable growth
Fair work and more efficient public services will be at the heart of Scotland’s economy, Deputy First Minister Shona Robison pledged today.
Plans to deliver real benefits to the people of Scotland through a strong, green economy, underpinned by the most progressive tax system in the UK, are outlined in the Scottish Government’s Portfolio Prospectus which pledges firm actions to be achieved by 2026.
These include:
creating the UK’s most progressive tax system to deliver public services, tackle poverty and grow the wellbeing economy
increasing the number of workers earning at least the real living wage, while narrowing the gender pay gap
making Scotland a leading European start-up nation, in which more businesses are created and grow to scale
growing international exports while diversifying into new markets
laying foundations to produce 5 Gigawatts (GW) of hydrogen production by 2030, as part of a Scottish hydrogen supply chain
implementing a New Deal for Local Government, including a fiscal framework, to tackle collective challenges and improve outcomes
The Deputy First Minister was joined by Wellbeing Economy Secretary Neil Gray on a visit to Dear Green Coffee Roasters in Glasgow – a company based on fair work principles and sustainability which embodies the vision for a wellbeing economy.
Ms Robison said: “The Scottish Government’s Policy Prospectus lays out the practical measures we will take to transform the economy, deepen our relationship with business and maximise the value of our public spending.
“Developing a wellbeing economy is not just good social practice, it makes sound economic sense. By focusing on strong public services, we can help disabled people, the long-term sick and those with caring responsibilities to get back into work. While paying a fair wage, and reducing the gender pay gap, can produce a committed workforce which in turn will help increase productivity and improve staff retention.
“We will work in partnership with local government to update the way it is financed and improve collaboration. Underpinning this will be stable, sustainable public finances delivering people-focused public services and supporting Scotland’s net-zero goals.
“Our resources will be focused where they can have the maximum impact, such as laying the foundations of a hydrogen supply chain and supporting internationally competitive green technologies, health and life sciences and advanced manufacturing.”
The Scottish Government’s Policy Prospectus is based on three missions: equality, opportunity and community.
Bank of Scotland Business Barometer for January 2023 shows:
Business confidence in Scotland fell five points during January to 10%
As National Apprenticeship Week approaches 27% of businesses in Scotland say investing in training and development presents the biggest opportunity for growth in the next six months
Overall UK business confidence reaches six-month high at 22% with twice as many businesses optimistic about the economy than in December
Business confidence in Scotland fell five points during January to 10%, according to the latest Business Barometer from Bank of Scotland Commercial Banking.
Companies in Scotland reported lower confidence in their own business prospects month-on-month, down 17 points at 8%. When taken alongside their optimism in the economy, up six points to 12%, this gives a headline confidence reading of 10%.
Scottish businesses identified their top target areas for growth in the next six months as evolving their product and service offer (42%), investing in sustainability (29%) and investing in their teams (27%).
The Business Barometer, which surveys 1,200 businesses monthly, provides early signals about UK economic trends both regionally and nationwide.
A net balance of 14% of businesses in the region expect to increase staff levels over the next year. This is up from December when a net balance of 11% of businesses reported plans to make new hires.
Overall UK business confidence climbed in January, with firms reporting their highest confidence levels since July last year.
Business confidence increased by five points to 22% and the net balance of businesses feeling optimistic about the economy doubled on December’s reading to 16%.
Ahead of National Apprenticeship Week (6-12th February) 30% of businesses across the UK reported that they are looking at opportunities to grow by investing in staff development and training. A net balance of 17% of firms reported plans to create new jobs in the next twelve months.
Chris Lawrie, area director for Scotland for Bank of Scotland Commercial Banking, said: “Ongoing pressures from wider economic challenges are clearly continuing to impact Scottish businesses, but confidence remains in positive territory and firms’ resilience shines on.
“Over the next few months as concerns such as rising costs continue, it is important firms keep a close eye on cash flow. Having reserves ready for when challenges hit makes managing turbulent periods easier. We’ll remain by the side of Scottish firms to help them successfully navigate the months and years ahead.”
For the second month in a row, confidence in the manufacturing and service sectors increased, with manufacturing rising to 28% (up 15 points) and services up to 25% (up seven points).
Business confidence in construction was down two points to 27%, while retail confidence fell for the second month in a row to 7% (from 13%), the lowest level since February 2021.
Paul Gordon, Managing Director for Relationship Management, Lloyds Bank Business & Commercial Banking, said: “After a challenging 2022, it’s heartening to see confidence rising for the second consecutive month.
“This is the first back to back increase since September 2021. There is no doubt that the business environment remains challenging and uncertainty still remains, but this improvement in optimism is very welcome as we start 2023.
“With pay expectations tempering, trade expectations set to improve, and a clearer way forward on energy price support, this may give businesses a bit more certainty and the confidence they need to inspire investment and promote growth.”
Hann-Ju Ho, senior economist for Lloyds Bank Commercial Banking, said:“Business confidence continues to improve following the December boost. Firms are clearly more optimistic about the wider economy and this is driving the increase, helped by precursory signs that wage and other cost pressures may be easing.
“It is still a tough environment for businesses, with high energy bills remaining a concern during the winter months, but there are grounds for optimism for 2023 if inflation starts to trend lower.”
