Westminster and Holyrood agree to £52m Scottish green freeports plan – but differences remain

Mon 14 Feb 2022
Posted by: Noelle McElhatton
Trade News

freeports

The UK and Scottish governments have agreed a partnership to develop two ‘green freeports’ in Scotland.

Sites could be open next year and will be part of HM Government’s levelling up agenda and the Scottish government’s drive to net zero by 2045.

A package of seed funding of £52m will be made available by Westminster to enable the development of the green freeports, it was announced today (Monday 14 February 2022).

Local needs

Eight English freeports were announced in the budget last year but the Scottish and Welsh governments have insisted on developing an approach that meet their own needs.

Ministers in Edinburgh had said they would pursue an alternative model called ‘green ports’, but under the new deal they will be known as ‘green freeports’, reports the BBC.

According to the Guardian, Scottish ministers proposed the idea of green ports based around low-emission industries and fair work practices.

Under the deal announced any consortium submitting a bid “must guarantee that local communities will benefit from it, as well as delivering on ambitious targets for net zero”, the joint announcement said.

New bidding process: equal say

A ‘long list’ of areas being considered for green port plans was announced last year, including Dundee; the Firth of Forth; sites around Glasgow; Cairnryan, near Stranraer; Shetland; Orkney; Aberdeen and Peterhead, and Montrose.

The process will start again for green freeports, with both the Scottish and UK governments assessing the bids and having an equal say on the choice.

Prime minister Boris Johnson, who is visiting Scotland today, said freeports would help to accelerate levelling up across the UK.

“They have the power to be truly transformational by creating jobs and investment opportunities to enable people to reach their potential, and I am delighted that people across Scotland will reap the benefits that will come from having two new green freeports,” he said in a statement.

Scotland’s economy secretary Kate Forbes said green freeports would be “integral” to creating “secure, sustainable and satisfying jobs that also help build a fairer, more prosperous economy for everyone”.

Green split

However, the deal has provoked the first split with the SNP’s power sharing partners the Scottish Green Party, reports Sky.

The Greens’ Ross Greer criticised the plans as a “corporate giveaway”.

“They are yet another way of handing tax breaks and public money to rich corporations, despite no evidence that it will create real economic prosperity,” he said.

Trade boosters

As explained on export.org.uk, the creation of freeports in the UK is a major plank of government strategy to expand international trade, boost the economy’s broader development and redress regional imbalances.

Freeports are considered outside a country for customs purposes, allowing goods and components to be imported and exported from the zone tariff-free. As previously covered in the IOE&IT’s Daily Update, they benefit from: 

  • streamlined planning processes to aid brownfield redevelopment
  • simplified customs procedures and duty suspensions on goods 
  • a package of tax reliefs to help drive jobs, growth and innovation 

Scottish green freeports will benefit from rates relief, enhanced tax allowances, Employer National Insurance relief and customs duty reliefs.

Another freeport in Wales is expected to be announced shortly.