Deal agreed to establish Green Freeports

A partnership agreement to establish two Green Freeports in Scotland has been reached between Scottish and UK Ministers.

Following robust discussions in recent months, both governments have agreed:

• to establish a joint applicant prospectus, with Ministers and officials from both the Scottish and UK Government having an equal say throughout the assessment and selection process
• that applicants in Scotland are required to contribute towards a just transition to net-zero emissions by 2045, delivering net-zero benefits and creating new green jobs
• that applicants in Scotland are required to set out how they will support high-quality employment opportunities that offer good salaries and conditions, and how fair work practices will be embedded in the green freeport area

Ministers have agreed that a joint offer set out in a prospectus offers the maximum benefits for the Scottish economy as both governments will be able to deliver tax reliefs and other incentives through a combination of devolved and reserved powers.

As a result of the recent negotiations, UK Ministers are expected to provide up to £52 million in seed funding to help establish Green Freeports in Scotland which is in line with funding offered to Freeports across England.

Economy Secretary Kate Forbes said:

“I am pleased we have been able to reach an agreement on a joint approach that recognises the distinct needs of Scotland's economy and enshrines the Scottish Government’s commitment to achieving net-zero and embedding fair work practices through public investment.  

“The Scottish Government will have an equal say on all bids, and will expect bidders to adhere to fair work practices including payment of the Real Living Wage.

“Scotland has a rich history of innovative manufacturers and so as we look to grasp the many opportunities of achieving net-zero, the establishment of internationally competitive clusters of excellence will help us create new green jobs, deliver a just transition and support our economic transformation.

“We can only seize Scotland’s economic potential if we create secure, sustainable and satisfying jobs that also help build a fairer, more prosperous economy for everyone. That is my absolute priority and establishing Green Freeports will be integral to achieving this.”

Secretary of State Michael Gove said:  

“This is a truly exciting moment for Scotland, and I am delighted we will be working together with the Scottish Government to set up two new Green Freeports.

“Green Freeports help inject billions into the local economy, while levelling-up by creating jobs for local people, and opportunities for people all over the UK to flourish.  

“By collaborating using opportunities like Green Freeports we can work to level-up the whole of the UK and bring benefits and opportunities to communities that need it most.” 

Background

The term ‘Green Freeports’ reflects the Scottish Government's distinctive net zero aspirations. The UK Government will continue to use the term ‘Freeports’ for its programme in the rest of the UK.

The Scottish Government will support the significant tax reliefs that will be made available to Green Freeports through devolved tax levers, including rates relief. HMRC will also support via reserved levers including enhanced tax allowances, Employer National Insurance relief and customs duty reliefs.

The Green Freeport model in Scotland adapts the UK Government’s Freeport model to fit the distinct needs and interests of the Scottish Economy. This will help deliver a net-zero economy and a Fair Work First approach, while supporting innovation, trade and inclusive growth. 

The next steps in the process will be set out by Ministers as soon as possible. A finalised joint prospectus and joint assessment process is expected to be published in March with winning bids announced over the summer.