The Chancellor announced the location of eight regional freeports in his Budget speech yesterday – after a bidding process that began earlier this year. He confirmed that freeports will be located in England at East Midlands Airport, Felixstowe and Harwich, the Humber region, the Liverpool City Region, Plymouth, Solent, Thames and Teesside. Mr Sunak claimed the freeports will have “simpler planning”, “cheaper customs – with favourable tariffs, VAT or duties”, and lower taxes – with “tax breaks to encourage construction, private investment and job creation”.
The Chancellor also reiterated that he will start working closely with devolved administrations to establish the free zones in Scotland, Wales and Northern Ireland.
The concept is a significant part of the UK’s post-Brexit landscape, which the Government hopes will provide hubs for enhanced trade and promote investment and regeneration for economically deprived areas.
In October, the SNP Trade Minister Ivan McKee claimed the Scottish Government would have turned down Mr Sunak’s offer of introducing freeports in Scotland.
First Minister Nicola Sturgeon also insisted there would be no need for freeports if the UK was still a member of the EU.
She said: “I don’t think freeports are any substitute for being a full member of the single market.
“We will listen to and support anything that is in the best interests of Scotland.”
However, less than three months later, the SNP performed a swift U-turn on the matter.
At the end of January, the Scottish Government confirmed it now plans to adapt the UK model to establish “fair, sustainable, green ports” with a streamlined planning process and a package of tax and customs reliefs.
A UK Government source told Adrian Masters, the political editor at ITV Cymru Wales, that Scotland was offered £8million for a freeport and has agreed to it.
The revelation came after it has emerged the Treasury intends to give £25m seed funding for each port in England but the Welsh Government is only being offered “a Barnett share of around £8million”.
Mr Masters wrote on Twitter: “Further to this, the Welsh Government said it questions the seriousness of the freeport offer to Wales.
“The UK Government has hit back, saying that the £8m is only one part of the benefits a freeport would bring and that Scotland has agreed to that amount.”
Scotland’s model would make it necessary for operators to pay the real living wage, adopt the Scottish Business Pledge, commit to supporting sustainable and inclusive growth in local communities and contribute to Scotland’s just transition to net zero.
The plans were announced at the end of January by Mr McKee, who has been holding discussions with the UK Government.
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Opposition parties described the move as a “humiliating climb-down for the SNP” after party members backed a resolution at last year’s conference stating freeports were “entirely at odds” with economic recovery plans.
Bob Buskie, chief executive of the Port of Cromarty Firth, speaking on behalf of Opportunity Cromarty Firth, said the group is “delighted” the Scottish Government has given the green light to freeports.
He said: “This will ensure ports are able to compete on a level playing field with their counterparts in the rest of the UK and help the Scottish ports sector play a full role in delivering a green economic recovery.”
Mr Buskie added that the Cromarty Firth is “ideally placed to become a sustainable, fair greenport” as it is positioned at the heart of a host of multibillion-pound renewable energy projects, including offshore wind and green hydrogen.
Councillor Braden Davy, who introduced a motion supporting Montrose’s bid to become a freeport, which was also supported by SNP councillors, also welcomed the Scottish Government’s decision.
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He said: “This could lead to new jobs, investment, and make Montrose the beating heart of the north east economy, and we will now redouble our efforts to support this work in Angus.”
Scottish Conservative Economy spokesman, Maurice Golden, said the “screeching U-turn” from the Scottish Government was very welcome and “it seems they have finally realised that businesses are desperate to reap the benefits from freeports”.
He added: “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.”