IT is impossible to overstate the impact that the coronavirus pandemic has had on every aspect of our lives. And so as we emerge from the pandemic we must work together to seize Scotland’s economic potential, and transform our economy into one built on the principles of net zero and fair work – an economy that works for everyone.
The Scottish Government is doing everything possible to support that transformation and ensure we grow our economy in a fair and sustainable way.
Like others, including many top trade experts, I was sceptical when the UK Government announced its intention to re-establish freeports in the UK, particularly given the tarnished reputation they often have around the world as centres for tax evasion and a race to the bottom.
READ MORE: UK Government: This is why we need mass campaign against Tory freeport plans
However when details of the UK Government’s proposals eventually emerged it became clear the model being proposed was more akin to the Enterprise Areas that have existed in Scotland since 2012, rather than traditional freeports.
Financial support that encourages the creation of new businesses and jobs constitutes the main benefit that the UK freeport model offers. Customs reliefs, traditionally the central element of a freeport, are only a small part of the package given that the UK already operates in an environment with low-to-no duties on traded goods.
To provide the necessary support the Scottish economy needs, and to avoid a race to the bottom on workers’ rights and the environment, the Scottish Government decided to engage with the UK Government’s proposal and adapt it to fit Scotland’s specific needs – that, after all, is what devolution is all about. Our greenports would aim to offer a package of assistance to businesses that adopt fair work practices and contribute to Scotland’s just transition to a net-zero emissions economy, while encouraging innovation and trade in a model that prevented any erosion of environment standards or workers’ rights.
We remain committed to working in partnership with the UK Government, as we had been doing constructively for months. However since UK ministers inexplicably pulled the plug on our agreed joint launch of an applicant prospectus in late February they have been unwilling to agree to our fundamental ambitions on fair work and net-zero, or to allocate funding on a par with what is offered to freeports in England. This is deeply regrettable.
READ MORE: Freeports: UK Government to sideline Scottish Parliament and spark row
The funding model proposed by the UK Government could see them providing up to three times as much seed capital funding on average to English freeports as they propose for the Scottish equivalent. Clearly this is not acceptable.
Our fair work and net-zero conditions are crucial to developing a model that is fit for the 21st-century and can garner support across Scotland.
The UK Government maintains that, according to its own analysis, the jobs created under an English model would be just as good as the jobs created under our proposal, thus such conditions are not needed. However they have not shared this analysis with us despite asks to do so, so perhaps the evidence is not quite as compelling as we are led to believe.
The UK Government seems to be concerned this makes its model for freeports in England look bad in comparison, but our priority is to deliver a policy that best meets the needs of businesses, workers and communities in Scotland.
The UK Government has now also indicated that they intend to have the final say in assessing bids and deciding which Scottish ports would be granted green port status – rather than agreeing this jointly with the Scottish Government. So while they expect us to contribute to financially supporting businesses in green ports through devolved financial benefits, they don’t intend to allow us to have a say in where that money goes. We cannot sign up to a policy that lacks a clear, robust commitment on fair work and net-zero, a fair funding deal and a guarantee on joint decision making.
READ MORE: Freeports: UK Government will 'undermine devolution' in Scotland and Wales
The UK Government’s model of proposed free ports cannot and will not undo the damage caused by Brexit and our removal from a single market around seven times the size of the UK; at best it is one of a series of tools that can help mitigate that damage in a limited way. But I remain hopeful that they will work constructively with us to find a solution that delivers green ports to Scotland as soon as possible and avoids continued competitive disadvantage for our economy as a result of this unnecessary delay.
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