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The Herald Scotland
2 days ago
- Business
- The Herald Scotland
What was in Rachel Reeves' Spending Review for business?
Of course a week is a long time in politics, as the commentators like to say, never mind a few turbulent months for the Government, so it was perhaps unsurprising that there was a lot of focus on what Ms Reeves had to say. As can often be the case, it can be difficult to discern what is new or recycled when a Chancellor makes statements of this kind, but there was certainly enough to chew over as far as the Scottish business community was concerned. And plenty to get annoyed about too, judging by some of the reaction. Scottish Chambers of Commerce was quite upbeat in its assessment of Ms Reeves' plans. Chief executive Liz Cameron said the Spending Review has 'given business a clear indication that the Government is serious about growth' and welcomed the commitment to Acorn, a carbon capture and storage in Aberdeenshire that many believe will be key to Scotland's transition to a low-carbon energy system. Read more: Ms Cameron said: 'With £86 billion for science and technology earmarked, the Chancellor has rightly placed productivity, innovation and investment at the heart of the Government's growth plans. 'What we need now is for this positive momentum to continue by removing cost burdens on business to help unlock more private investment into the economy and to restore job creation.' Ms Cameron added: 'The Government's backing for the Acorn Project is a significant endorsement which will help to make the north east a world leader in the low-carbon industry. 'This major carbon capture and storage facility puts us on an ecologically more sustainable trajectory and will bolster the region's economy by creating up to 15,000 jobs in construction and attracting billions in private investment. 'Whilst this intervention is undoubtedly welcome, we urge both the UK and Scottish Governments to work in collaboration to realise Acorn's potential in full.' Scottish Chambers also gave the thumbs up to increases in the defence budget, and the reversal of last autumn's decision to cut funding from the Edinburgh University supercomputer project. Ms Cameron noted that the £750 million pledged will 'support the high-quality research coming from Scotland's world-leading research facilities and accelerate the commercialisation of our AI capabilities'. She said: 'Focusing on high growth sectors like IT, biotechnology and life sciences shows that the government has the right priorities.' But while she said the measures announced in the spending review 'have the potential to set the UK economy on the pathway to growth… the Treasury needs more room to manoeuvre'. Ms Cameron noted: 'We echo calls from the International Monetary Fund and leading economists calling for a review of the Government's fiscal rules to allow more flexibility to invest in long-term assets such as transport, infrastructure, connectivity and logistics.' Read more: Although Scottish Chambers found lots in the Spending Review to be encouraged about, the verdict from the Scottish Hospitality Group was scathing, with director Stephen Montgomery declaring that it does 'absolutely nothing' to support the sector. He said: 'Today we heard all about the spending plans, however nothing about helping those who will pay for it through taxes. 'On a day where we know that unemployment has risen, employers are holding off on recruitment, inflation has all but doubled, and the OBR (Office for Budget Responsibility) having already halved the growth figure for 2025, the Chancellor offered nothing for the third largest employer in the country, who contribute billions every year in taxes to support the public sector. 'To help the economy to grow, you need business to grow, so today we yet again see the sector let down by Rachel Reeves. The crippling increase in employers national insurance contributions handed down in April is now one of the biggest strains on hospitality, along with the high VAT (value-added tax) rate. I guess asking the government to U-turn twice in a week would have been too much to ask.' The Federation of Small Businesses meanwhile said the Spending Review left its members 'wondering when they will feel the benefits', noting that it was 'not the business-focused day they had hoped for'. However, policy chair Tina McKenzie noted that the 'one major bright spot for small firms' was the 'the significant increase in resources to the British Business Bank, which FSB campaigned for in advance of today's statement'. 'This should see far more finance flowing to local businesses up and down the country,' she added. Sandy Begbie, chief executive of Scottish Financial Enterprise, said the Spending Review 'underlines the reality of the economic situation we find ourselves in'. He noted that businesses 'instinctively understand the fiscal constraints facing the Government and the difficult decisions required, but also the need for long-term strategic thinking that will deliver certainty and opportunity for both taxpayers and business'. However, Mr Begbie warned that 'current inflationary pressures, coupled with stagnant productivity and increasing levels of tax pose significant headwinds to business investment'. He added: 'With taxes at a 70 year high in the UK, and higher still in Scotland, it is vital the UK Government recognises that it cannot tax its way to long-term, sustainable growth.'
BBC News
3 days ago
- Business
- BBC News
Acorn Project carbon capture funding to be announced in spending review
Funding for a carbon capture project in Aberdeenshire is expected to be announced in the UK government's spending review, BBC Scotland News Acorn Project based in St Fergus would take greenhouse gas emissions and store them under the North Sea, in a process known as carbon capture and have been growing calls from business leaders for investment in the project which has been on a reserve list for Rachel Reeves will announce the budgets for all government departments over the next few years on Wednesday, which will include information on what new projects will receive investment. In the House of Commons on Tuesday, ministers were asked a number of times about funding for the Minister Sarah Jones told MPs they didn't have long to wait to see what the spending review had to say about the said: "We have always been clear that we support the Acorn Project" adding "we know what an important proposal it is."The decision is a matter for a spending review but we are very close to having those decisions". 'Vital' for climate targets In March, business leaders including oil tycoon Sir Ian Wood and organisations such as the Scottish Chambers of Commerce signed a letter urging the chancellor to back the letter argued that the project had faced two decades of setbacks, and that it is needed to help Scottish industry project missed out on support in 2021, when funding instead went to two areas in the north of England, and Acorn was placed on a reserve list for future UK government said Acorn had already received more than £40m for its it is given the go-ahead, waste CO2 will be piped from central Scotland to St Fergus using redundant pipelines which previously carried natural gas say the technology is vital for Scotland to meet its climate which are signed up include the refineries at Mossmoran and Grangemouth as well as a new power station at Peterhead.
