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 . . . . .
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