Government stokes SNP row with direct plan for Scotland's freeports

·5-min read
Prime Minister Boris Johnson (left) and Chancellor Rishi Sunak (right) on a visit to Teesside, one of England's eight new freeports, in March - AP Photo/Scott Heppell
Prime Minister Boris Johnson (left) and Chancellor Rishi Sunak (right) on a visit to Teesside, one of England's eight new freeports, in March - AP Photo/Scott Heppell

UK ministers are preparing to sideline the SNP and unilaterally establish freeports in Scotland, in a move which will provoke a furious constitutional row between London and Edinburgh.

Whitehall officials are drawing up plans to invite direct bids from Scottish port authorities to become freeports, which will receive significant tax breaks and exemptions from customs obligations in an effort to boost the economy and create thousands of new jobs.

Despite several Scottish ports being keen to obtain the special status, the SNP is opposed to adopting the UK Government model, which is a key part of Boris Johnson’s plans to boost global trade in post-Brexit Britain.

The nationalists have proposed altering the plans to create what would be rebranded as ‘greenports’ in Scotland, which they say would have higher environmental and employment standards.

However, the UK Government is adamant that the internationally recognised freeports name must be used and talks about a joint plan are all but deadlocked.

The SNP demands are viewed in London as superficial and part of a ploy that would allow nationalist ministers to claim credit for the economic benefits a largely Treasury-funded project will bring while wrongly portraying 'greenports' as superior to their English counterparts.

Further discussions between UK and Scottish officials are set to take place this week, with a deal on the table that would see two freeports created in Scotland.

However, the UK Government is now working on plans which would see them cut the SNP administration out of the process and establish Scottish freeports unilaterally.

While such a move would be certain to spark fresh SNP claims of an attack on devolution, UK ministers believe Scottish ports would embrace the opportunity, neutering claims that freeports were being 'imposed' on Scotland.

The Telegraph understands that it is hoped that successful Scottish bidders will be announced by the end of the year, with eight freeport sites in England already selected.

A UK Government source said: “Freeports bring huge potential to boost the Scottish economy and create high quality jobs.

“We want to work with the Scottish Government to deliver the best deal for Scotland. But that's going to be difficult as long as the Scottish Government continue to undermine the Freeport brand.

“As things stand, it appears the Scottish Government are seeking to manufacture a constitutional row rather than work with us on what's best for the economy. Scotland's economic recovery is too important to be derailed by irresponsible nationalism”.

The joint leaders of Aberdeen Council, Jenny Laing and Andy Kille, recently said the freeports scheme presented an “unprecedented” opportunity for their city, with a study suggesting it could create 22,000 jobs.

Aberdeen Harbour - EPA/ABERDEEN HARBOUR BOARD
Aberdeen Harbour - EPA/ABERDEEN HARBOUR BOARD

They sided with the UK Government in the row over what they would be called, saying the freeports name “resonates across the globe” and “must not be altered”. Dundee and the Port of Cromarty Firth are among other Scottish locations keen on submitting bids.

Goods that arrive into freeports are exempt from tariffs, as long as goods do not enter the UK, while there will also be a substantial package of tax reliefs to encourage development.

However, the SNP has claimed the freeports model globally is associated with criminality, smuggling, reductions in workers’ rights and tax evasion, leaving them a "tarnished" brand.

Scottish ministers has demanded the UK plans must be changed for a “Scottish context” and to avoid a “race to the bottom” on workers’ rights and the environment.

As well as changing their name, the SNP wants businesses in freeports to be obliged to pay the real living wage, sign up to its ‘Scottish Business Pledge’ and promise to “contribute to Scotland’s just transition to net zero.”

Conservative ministers want a UK-wide system and believe the SNP demands are irrelevant as freeports will create high-quality jobs, while bidders in England submitted plans with high environmental standards.

While the UK Government has the power to establish freeports without Scottish Government consent, SNP ministers could seek to block any new developments by using their powers over planning. However, this would be likely to lead to a backlash from the Scottish ports selected and councils, who would initially decide any planning applications.

A general view of the port and dockside area on in Dundee - Jeff J Mitchell/Getty Images
A general view of the port and dockside area on in Dundee - Jeff J Mitchell/Getty Images

A spokeswoman for the Scottish Government said: “The Scottish Government remains committed to working in partnership with the UK Government, however we cannot sign up to a UK policy which does not respect devolution, undermines the Scottish economy and fails to provide equivalent funding to what is on offer for ports in England.

"We need the UK Government to work with us to ensure their proposals best meet the needs of business and communities in Scotland. Should the UK Government move forward with a proposal that does not include a commitment on fair work and net zero, the Scottish Government will not support this initiative.

“Our fair work and net zero conditions are not simply rhetoric but crucial to developing a model that is fit for the 21st century and can garner support across Scotland.

"We will challenge any attempts by the UK Government to impose their model in Scotland by legislating in devolved areas, which would be a breach of the spirit of the Devolution settlement and we strongly encourage the UK Government to work with us to ensure we can deliver green ports in Scotland.”

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