The UK Government is backing Scotland with billions in investment to grow the economy and create jobs, the Chancellor has said ahead of her visit to the country.

Rachel Reeves said Labour is “seizing the huge potential and opportunities that Scotland has to offer” in defence and energy.

She will visit RAF Lossiemouth in Moray and the St Fergus gas plant in Aberdeenshire on Friday, exactly a week after she toured the Rolls-Royce factory near Glasgow Airport.

The Chancellor will meet 200 Boeing staff at the military site where three new E-7 Wedgetail aircraft are being made.

The UK Government said its plans to increase defence spending to 2.6% will raise Britain’s GDP by around 0.3%, while adding 26,100 jobs to the Scottish economy.

It also pointed to its £200 million investment for Aberdeenshire’s Acorn carbon capture project, which could create 15,000 new jobs while safeguarding 18,000 more. A final investment decision for the project is yet to be made.

Ms Reeves said: “We’re seizing the huge potential and opportunities that Scotland has on offer.

“Whether it’s in defence to keep the UK safe, or clean energy to power all corners of the country, this Government is backing Scotland with billions of pounds of investment to grow the economy and create jobs.”The Chancellor will visit RAF Lossiemouth on Friday (Danny Lawson/PA)

Scottish Secretary Ian Murray said the Government is investing in defence to “ensure Britain’s security and deter our adversaries and drive economic growth”.

He added: “This investment is a massive jobs opportunity for Scotland – this ‘defence dividend’ is good news for Scotland, where it will help create skilled jobs, drive economic growth, and help tackle the critical skills gaps facing the country in sectors such as nuclear, construction, maritime and project management.”

Maria Laine, Boeing’s UK president, said: “Boeing has a long-standing presence in Scotland including at RAF Lossiemouth, the home to the UK’s P-8 Poseidon fleet and where the E-7 Wedgetail will be based when it enters service.

“As a key partner of the UK Armed Forces, Boeing welcomes the defence spending increase and has seen first-hand how defence infrastructure investments, such as the £100 million Atlantic Building and new E-7 facilities at RAF Lossiemouth, can deliver for local jobs, suppliers and UK national security.”Scottish Secretary Ian Murray said Scotland is receiving a ‘defence dividend’ from the UK Government (Gareth Fuller/PA)

Michelle Ferguson, director of CBI Scotland, added: “Scotland’s energy and defence sectors are vital to our economy, driving investment and supporting thousands of skilled jobs.

“The Chancellor’s announcement of £200 million for the Acorn energy project is very encouraging, but businesses are eager for final approval to unlock its full potential and secure North Sea jobs.

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“Increased defence spending will further boost Scotland’s skilled workforce and create growth opportunities across key supply-chain.

“Close collaboration between the Scottish and UK governments will be essential to fully realise these benefits, driving forward national security and Scotland’s transition to a resilient, low-carbon economy.”

Aberdeen & Grampian Chamber of Commerce urged the Chancellor to drop the energy profits levy (EPL), the so-called “windfall tax” on oil and gas companies, which has a headline rate of 78%.

Chief executive Russell Borthwick said: “If we stick to course on the accelerated decline of the North Sea, then we’ll only have a few short years and not prosperous decades of future oil and gas from our own waters.

“Instead, we’ll import more, pay more and suffer further consequences of jobs and businesses lost, just at the time we need them to support the energy transition.

“We know the Chancellor needs to find growth from somewhere within the UK economy. With oil and gas, there’s no need to start from scratch or build out a nascent industry.

“Simply by removing the confiscatory EPL, letting investment flow into projects and stimulating activity in a sector which has been hammered by policy for too long, we can unlock significant growth in the UK economy.”

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