Ministers begin consideration of bids for Scotland's two new low-tax Green Freeports

Five ambitious schemes are in the running for a competition to become new low-tax green freeports which are due to be set up in Scotland.

By Ilona Amos
Monday, 20th June 2022, 8:57 pm

Two projects north of the border will be chosen as part of a joint initiative between the UK and Scottish governments to establish special economic zones centred around air, rail and sea ports across the country, aimed at regenerating communities, boosting the economy and driving progress towards environmental targets.

Separate entries have been submitted for the Clyde in Glasgow, Aberdeen City & Peterhead, Inverness and Cromarty Firth, the Firth of Forth based in Leith, and Orkney.

Bids for the competition, which opened in March, are now closed and ministers in London and Edinburgh will consider the merits of each scheme over the next few months.

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Applicants were required to set out how they would “support ambitious net zero targets, create good-quality jobs and deliver investment” and build on UK Government’ plans “to level-up” the whole of the nation, working with the devolved administrations.

Successful schemes will benefit from a comprehensive package of support, including millions of pounds in funding, relief on various taxes, rates and National Insurance payments, and customs easements.

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Eight freeports have already been confirmed in England.

Opportunity Cromarty Firth, one of five bidders to become a Scottish Green Freeport, has submitted what it describes as a “compelling and logical” proposal which it claims will bring in more than £2.5 billion of new private sector investment in the UK’s green energy sector and create 25,000 jobs. Picture: OCF

Scottish finance secretary Kate Forbes said: “I’m pleased to see a range of bids come in from across the country to become a green freeport.

“We expect green freeports to promote regeneration in the areas selected, create high-quality jobs and enhance our decarbonisation plans in the just transition to a net zero economy.

“We will now jointly assess and decide on the winning bids, following the rigorous process set out in the agreed joint prospectus in which each government has an equal say.

“Further details of the successful applicants will be set out in the coming months.”

Neil O’Brien, UK minister for the union, constitution and levelling up, said: “I’m delighted that our proposal to establish two green freeports has received five strong bids from ports right across Scotland.

“Now, in partnership with the Scottish Government, we will review the applications and decide which two proposals will become green freeports – hubs that will support a net-zero economy in Scotland and bring hundreds of jobs to the successful areas, backed by £52 million in UK Government funding.

“I look forward to announcing the successful green freeports later this year and seeing them deliver for the people of Scotland.”

One freeport operated in Scotland – at Glasgow Prestwick Airport – until 2012, when the-then Westminster Government opted not to renew legislation governing seven across the UK.

Following Brexit, UK ministers proposed the creation of ten new free ports, including two in Scotland.

Both the Scottish and UK governments will assess the proposals and have an equal say in the choice.

A freeport is a defined area where different economic rules apply, designated by the trade and commerce administrations of various countries.

Companies within the zones are taxed very lightly or not at all to encourage economic activity, with rules and duties determined by each country.

The EU has been clamping down on 82 free zones after finding their special status had aided terrorism financing, money-laundering and organised crime.