2nd freeport in Scotland likely to be lost

Following the announcement of English freeports earlier this year, the U.K. government has been in talks with the Scotish National Party (SNP) about freeports in Scotland. Although it was originally indicated there would be 2, the second freeport in Scotland has come under threat following the U.K. Government’s refusal to use the SNP’s proposed “green port” model.

SNP party members passed a motion last week that claimed freeports were part of an agenda to undermine devolution, and that they have historically been used to encourage trafficking and money laundering. 

As part of the green port initiative, the SNP have called for additional incentives to be given to businesses to provide better work practices for employees whilst striving for a net zero economy. Westminister has advised the SNP that freeports in Scotland must use the traditional, global branding of “Freeport”, in line with the remainder of the United Kingdom.

Where would the freeport in Scotland be?

Scotland has not yet confirmed the location of where their freeport would be, but Aberdeen, Cromarty Firth, Dundee, Hunterston, Orkney,and Rosyth have all been suggested as possible sites. Confirmation on the location(s) of Scotland’s freeport will likely be influenced by whether or not a second is approved by the U.K. Government. 

More details will be announced by the U.K Government next year.

Where are the freeports in England?

England has 8 sites that are confirmed to become freeports: East Midlands Airport, Felixstowe and Harwich (Freeport East), Humber, Liverpool City, Plymouth, Solent, Thames, and Teeside.

 

The Thames freeport zone will include Ford’s Dagenham, London Gateway, and the Port of Tilbury. DP World have announced this week that a fourth berth will be built in London Gateway, in anticipation of the growth that this freeport will provide to the area. 

 

What are the positives of freeports?

Freeports offer tax relief on certain commodities around the port area, allowing for raw materials to be imported, worked, and re-exported without incurring duties. 

In order to incentivise businesses within freeport areas to create more jobs, there is typically a lower amount of employment tax payable by companies within the area. Confirmation on whether this will apply to U.K freeports has not yet been given by the U.K Government. 

The SNP have called for use of the greenport model when creating any freeport in Scotland, whereby companies within the zone will need to meet standards – for sustainability, contributing to the community, and paying the “real living wage” – in order to receive the benefits of a freeport. Their concern is that that the current freeport model could be used for criminal activity, and creating jobs that are of low value and opportunity.

 

The U.K Government has not yet confirmed the guidelines for freeports, but has advised that they will be tightly controlled to comply with environment, labour and safety laws. 

If you would like to know more about the impact of a freeport in Scotland, please contact one of our experts today.

 

Read more articles!