finance

Fair work and environment commitments ‘non-negotiable’ in freeport talks – McKee



Scotland’s Trade Minister has warned that he will not support plans for ‘green ports’ without commitments for fair work and net zero as part of any freeport agreements.

The Scottish Government wants to adapt plans by the UK Government for freeports that would offer tax breaks and exempt goods from tariffs.

But Ivan McKee has expressed a desire for any Scottish freeport to offer tax and customs relief to operators that include fair work practices and contribute to the transition to net zero emissions.

In a letter to the Secretary of State for Scotland Alister Jack, he said that committing to those principles would be “non-negotiable” if an agreement is to be reached.

He added: “Should the UK Government wish to move forward with a proposal that does not include these elements, I can inform you now that the Scottish Government will not support this initiative with its lack of protection against a race to the bottom on workers’ conditions and the environment.”

McKee also bemoaned apparent delays, suggesting it could put Scottish freeports “at a disadvantage in relation to their counterparts in England”.

Following talks between the pair on Friday, McKee said: “Green ports will help us create a sustainable economy that promotes good jobs and supports our important net zero commitments.

“The Scottish Government remains committed to working in partnership with the UK Government to ensure the benefits of green ports are equally felt by businesses across the UK.

“However, we have been frustrated at the lack of co-operation from the UK Government, who so far appear to be unwilling to allocate funding on a par with elsewhere in the UK, or to agree to our green port ambitions on fair work and net zero.”

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A UK Government spokesman responded: “We are keen to work with the Scottish Government to bring the freeports initiative to Scotland, to boost jobs and the economy.

“The UK Government’s freeport model encompasses good employment practices and high environmental standards, as well as being an internationally recognised brand.

“We hope to start work on a joint prospectus very soon.”

Under the Scottish Government’s previously-announced proposals, operators and businesses benefiting from the green port incentives would have to pay the real living wage and “commit to supporting sustainable and inclusive growth in local communities”.

Rosyth, Dundee, Hunterston, Orkney, Aberdeen and the Cromarty Firth have been suggested as possible sites.

Freeports are designated areas where the normal tax and tariff rules of the country in which they are based do not apply.

They allow goods to be imported, manufactured and re-exported without being subject to checks, paperwork, or import taxes. This means raw materials can be imported, then engineered into whole products for export.

Typically, companies operating in the zone pay lower taxes, such as reduced VAT and lower rates of employment tax.

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