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by Jenni Davidson
21 January 2021
Scottish Government announces U-turn on freeports with plans for ‘green ports’

A drilling rig at Port of Cromarty, which hopes to become a freeport - Image credit: Ryzner Zdenek/Czech News Agency/PA Images

Scottish Government announces U-turn on freeports with plans for ‘green ports’

The Scottish Government has reversed its opposition to freeports with plans for what it is calling “green ports” in Scotland.

The government said the green ports model will focus on inclusive growth, fair work practices and delivering a net-zero economy.

However, Labour and the Greens warned of a possible “race to the bottom” on workers’ rights and “greenwashing”, while the Conservatives have called it a “screeching SNP U-turn”.

Freeports are entry points into the UK that have special exemptions from normal tax and customs rules.

They allow companies to import goods without paying tariffs, process them into a final product and then either pay a tariff on goods sold in the UK or export the final goods without paying UK tariffs.

Freeports may be sea ports, airports or rail terminals.

The UK Government wants to introduce freeports around the UK as part of drive to boost the economy, saying they will attract trade and create jobs, contributing to economic recovery.

However, concerns have been raised that they could encourage tax evasion, criminality and poor workers’ rights.

The Scottish Government had previously opposed plans to create any in Scotland, with trade minister Ivan McKee describing them as “a shiny squirrel to draw attention away from all the other bad stuff that is going on in the trade arena”.

In November First Minister Nicola Sturgeon said: “The Scottish Government wants to build a high-productivity, high-wage, innovative economy in Scotland.

“We remain concerned that the focus of freeports may be on the low-cost, low-wage, low-value opportunities with which they are sometimes associated globally.”

However, the Scottish Government has now announced it plans to adapt the UK Government’s freeport proposals, offering streamlined planning processes and a package of tax and customs reliefs, while establishing “fair, sustainable, green ports”.

Under the Scottish Government’s green ports model, operators and businesses benefitting from the package of incentives would have to pay the real living wage, adopt the Scottish Business Pledge, commit to supporting sustainable and inclusive growth in local communities, and contribute to the transition to net zero.

The plans were announced by McKee, who will hold discussions with the UK Government next week.

He said: “The reputation of freeports across the world is mixed, with concerns about deregulation and risks of criminality, tax evasion and reductions in workers’ rights raised.

“That is not a model nor an approach that this Scottish Government will sign up to or allow here in Scotland.

“And it is clear that freeports cannot and will not undo the damage being caused to Scotland’s economy by the UK Government’s decision to take us out of the EU, the world’s biggest single market.

“Instead, we propose to take the freeport model and apply Scotland’s priorities to it, so that it meets our ambition to deliver a net-zero, wellbeing economy that upholds the highest standards of environmental protections and fair work practices and supports our strategy of building clusters of high productivity businesses across Scotland’s regions.

“We have listened to what businesses and communities have said and there is an appetite for new ways to support our economy through the recovery.

“The Scottish green port model will be an exemplar, adopting best practice which helps deliver our net-zero emissions and fair work principles, alongside supporting regeneration and innovation ambitions.”

UK Government Minister for Scotland Iain Stewart said: “Freeports will play an important part in the UK’s economic recovery, increasing international trade, attracting new investment and creating jobs in communities right across the UK.

“It’s great to see so much enthusiasm for freeports in Scotland from ports, local authorities and businesses.

“We want to ensure all parts of the UK benefit from this UK Government initiative, and we welcome the Scottish Government’s decision to work with us on it.

“We look forward to bringing the first freeport to Scotland.”

But the Scottish Greens have warned of a race to the bottom on environmental and workers standards.

Responding to the announcement, Scottish Greens environmental spokesperson Mark Ruskell said: “Simply calling a freeport ‘green’ doesn’t guarantee environmental and workers standards, and presents a real risk of greenwashing a deregulated race to the bottom.

“We haven’t seen any detail of the environmental standards these ports will be expected to uphold.

“They must not be part of the Brexit race to the bottom in standards and protections or given free reign over planning decisions, which must remain accountable to local communities.

“For example, Forth Ports in their submission to the consultation identified a new gas fired power station in Grangemouth as one of their key projects.

“Clearly, this could hardly be described as ‘green’.”

He added: “The minister acknowledged that money laundering and illegal activity is associated with free ports, but with powers over our borders in the hands of Tory-run Westminster, what protection can we expect that Scotland’s waters don’t become a haven for illegal activity?”

Concerns over workers’ rights were echoed by Scottish Labour’s economy and jobs spokesperson, Alex Rowley, who said: “Scotland desperately needs quality green jobs, and we will work with the Scottish Government to create them through any possible means.

“We welcome the commitment to incentivise employers to pay the living wage, and the SNP government should extend this to all aspects of government, including the procurement of all public contracts.

“While we welcome this policy on pay, we need a strong commitment from ministers that they will work with trade unions and provide further guarantees that pursuing freeports will not lead to a race to the bottom on workers’ terms and conditions.

“We cannot allow this programme to be another example of SNP rhetoric on green jobs failing to match the reality.”

Scottish Conservative economy spokesman Maurice Golden commented: “This is a humiliating climb-down for the SNP.

“Just a few months ago, Ivan McKee was claiming that freeports are a  ‘shiny squirrel’ and the SNP conference backed a motion slamming them.

“This screeching SNP U-turn is very welcome. It seems they have finally realised that businesses are desperate to reap the benefits from freeports.

“The Scottish Conservatives and UK Government have said for months that the SNP should stop playing politics and start working constructively to take these proposals forward.

“Yet again, the SNP treated business as an afterthought. They ignored the benefits to make political points and only now have they finally backed down.”

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