Labour would give Scotland Office £150m levelling up cash to cut poverty rates

An incoming Labour Government will hand the Scottish Office a £150m warchest to combat poverty.

Likely Scottish Secretary Ian Murray will be given the levelling up cash to fund councils without SNP Government approval.

He said: “Labour will reduce poverty by growing our economy and making work pay.

“This funding will help create jobs across the country and unlock opportunities across Scotland, especially in deprived communities who have been let down by the Tories and the SNP for too long.”

Levelling up funding, currently under the control of Michael Gove’s government department, was set up in the wake of the UK leaving the EU.

Billions of pounds have been awarded to projects across the UK since 2021, with round two worth £177m for Scotland.

But the Labour manifesto, which will be published today by leader Keir Starmer, will back a major shake-up of the system.

Over £150m will be given directly to the Scotland Office to dole out north of the border.

It will turn the Scotland Office into a proper spending department with financial clout.

The cash will be targeted at deprived areas with an emphasis on cutting poverty rates, creating jobs and stimulating economic growth.

Murray, who sits in Starmer’s shadow cabinet, is widely expected to be Scottish Secretary after the election and will sign off the cash if appointed to the top team.

He told the Record: “If Labour is privileged enough to form the next UK Government we will turbo charge the Scotland Office with a remit to create jobs, drive growth and deliver the change Scotland needs.

“That means promoting Scotland’s world class produce, products and services around the world to boost exports and drive investment. Scotland is the best country in the world, and we will sell our country to the world.

“We will ensure that the government delivers for Scotland – such as establishing GB Energy, headquartered in Scotland, creating 69,000 jobs, bringing down bills and ensuring our energy security for years to come.

“And the Scotland Office will oversee investment in Scotland to create jobs, deliver economic growth and reduce poverty across Scotland.

“That’s the change Scotland needs and it’s the change we can get if we vote out the Tories and replace them with a UK Labour government with Scottish Labour MPs at its heart. It’s an opportunity we can’t afford to miss.”

SNP figures are sceptical of the way the levelling up money has operated in recent years.

They believe the so-called “slush fund” has been targeted at Tory constituencies with the aim of helping the re-election of sitting MPs.

Nationalists also believe the cash should be spent by Holyrood, not Westminster.

The manifesto will also confirm previous commitments to end the non-dom tax status, introduce VAT on private school fees, create GB Energy and boost workers’ rights.

Speaking ahead of the launch, Starmer said economic growth will be his “number one priority”.

He said: “Some people say that how you grow the economy is not a central question – that it’s not about how you create wealth, but how you tax it, how you spend it, how you slice the cake, that’s all that matters.

“So let me be crystal clear – this manifesto is a total rejection of that argument, because if you transform the nature of the jobs market, change the infrastructure that supports investment into our economy, reform the planning regime, start to unlock the potential of billions upon billions in projects that are ready to go, held up by the blockers of aspiration, then that does so much more to our long-term growth prospects.

“The same is true of our public services. If we could grow the economy at anything like the level the last Labour Government did, that’s an extra £70bn worth of investment for our public services.

“Wealth creation is our number one priority. Growth is our core business – the end and the means of national renewal. The mandate we seek from Britain at this election is for economic growth.”

Green MSP Ross Greer said: “Additional funding for Scotland is clearly needed to make up for 14 years of Tory budget cuts, but where it goes should be decided by Scotland’s elected Parliament and Government, not by Westminster.

“Levelling Up money has so far gone disproportionately to constituencies held by Tory MPs rather than the deprived communities who really need it. That partisan approach can’t be repeated under Keir Starmer.

“If the Labour Party’s priorities are tackling poverty and creating jobs, it would make a far bigger difference to ditch their commitment to follow the Tories’ overall spending plans.

“Our country desperately needs investment, not more cuts to essential public services with a bit of targeted spending on the side.”

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