In recent years, Freeports’ establishment has hiked since its economic advantages have been proven. Dubai, Hong Kong, and Singapore are among the best known. These freeports help the host country to use the port for importing, exporting, and manufacturing without standard tariffs. There is a new term specified for Scotland, which is Green Freeports.
On 21 January 2021, Scottish Parliament issued a statement mentioning that freeports are concerned about the possibility of deregulation, tax evasion, and criminality so that Scotland would follow the Green Freeports model. On 14 February 2022, the UK and Scotland governments agreed to cooperate to establish two Green Freeports in Scotland.
The Scottish green freeport model prioritises four key policy aims, including:
- To promote regeneration and high-quality job creation
- To Promote Decarbonisation and move toward the net-zero economy
- To establish hubs for global trade and investment
- To make the innovative environment
Sunak-Sturgeon First Meeting
With this introduction, we can move on to the latest meeting between the New British Prime Minister, Rishi Sunak, and the Scottish First Minister, Nicola Sturgeon, which was held on 10 November ahead of the British-Irish Council summit in Blackpool, where the SNP leader raised the prospect of a vote on the UK’s future. That was the first time since PM Gordon Brown 2007 participated in this meeting. This shows how much Scotland’s issue is critical for Rishi Sunak. On the other hand, it shows that the independent desire of Scotland made the UK government worried. Rishi Sunak and Nicola Sturgeon discussed bilateral issues and cooperation expansion, including Green Freeports.
Rishi Sunak pledged to reset the relationship between the UK and devolved governments, and Sturgeon welcomed that. At the same time, the Scottish first minister again emphasised her intention to hold a vote on the issue in October of next year. She reiterated that she would not allow Scottish democracy to be “held prisoner” by the UK Government over an independence referendum.
Green Freeports Behind Closed Doors
Two Green Freeports locations were selected behind closed doors, but the UK government has yet to confirm those locations publicly. Scottish secretary Alister Jack reported about two months ago that the UK government had already reached a decision secretly. Rishi Sunak is under pressure to start working with two governments on these Green Freeports. North East Scotland Green Freeports backed team wrote a letter to Prime Minister that Scotland is the rich industrial legacy of the region since it has a good source of oil and gas and could be the capital of Energy of Europe.
It is estimated by independent analysis that Green Freeports could create 32,000 jobs and an economic foster of 8.5 Billion Pounds in gross value added.
It is believed that Liz Truss’ main failure reason was that she wanted to give low-tax investment opportunities to investors, but now Green Freeports could implement that model.
A UK Government spokesman said: “Green freeports are a key part of our levelling agenda and will support a net zero economy in Scotland, bringing hundreds of jobs to the successful areas.”
Future of the UK-Scotland partnership
As a consequence of the recent discussions, the UK government is expected to provide about £52 million in funding to establish Green Freeports in Scotland, the same as funding offered to freeports across England and supports such as:
- Customs easements: this would have advantages for England and Scotland. After Brexit, the UK still faces problems in exporting and importing with the EU, and discussions on tariffs and customs regulations are to be continued.
- Capital for land assembly and infrastructure
- To support the establishment of governance structures of Green Freeports.
- To provide relief for Employer National Insurance.
In partnership with the UK government, Scotland has adopted the Green Freeport model to create sustainable and fair Green Freeports that fit Scotland’s priorities. This port is a large area within a defined boundary, including green rail, sea, and airport. Operators and businesses in this Green Freeport can benefit from a tax package and other incentives.
Although Scotland is determined to hold an independence referendum, if the UK could face Scotland’s expectations, Green Freeports can use it to encourage Scotting to remain part of the UK. On the other hand, Scotland could not independently fund Green Freeport in the short term.
Brexit and Green Freeports
The UK government still has negotiations on trade, transportation, and labour forces in the post-Brexit era with European Union. The Times recently reported that UK prime minister Rishi Sunak is considering choices to remove trade barriers with the EU, including a Swiss-Style relationship. Still, it could anger many Eurosceptics and fans of Hard Brexit. Since there are a considerable gap between politicians in the UK on the future UK-European Union ties, the UK can use these Green Freeports as a healing means to make a trade with the EU with fewer barriers.
On the other hand, after Brexit, we see more desire for independence in Scotland since they prefer to be part of the EU (the Majority of Scottish in 2016 voted to remain in the EU). They believe that Brexit damages Scotland’s trade status and opportunities. If Scotland could use the Green Freeport to stabilise its position as one crucial trade hub in Europe, it may decrease its desire for complete independence from the UK and ask for more bounces. Of course, this could not come to reality before October 2023, when Nicola Sturgeon pledged to a referendum. Still, if the UK government could make more public relations efforts on this, it may be an incentive for the Scottish to give another chance to keep this unity as it happened before in 2014.