Challenging the UK to deliver green ports in Scotland

The Scottish and UK Governments have been at loggerheads for the past few months, with Holyrood accusing Westminster of not cooperating on the delivery of green ports. Ilaria Grasso Macola traces the history of Scottish green ports, what led to the dispute, and the latest developments.

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The Scottish Government recently asked the UK Government to cooperate more when it comes to the delivery of green ports, claiming the lack of cooperation puts Scottish ports at a competitive disadvantage compared with the rest of the country.

“Green ports will help us create a sustainable economy that promotes good jobs and supports our important net-zero commitments,” Scottish Trade Minister Ivan McKee wrote to the Scottish Secretary of State Alister Jack.

“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.

“We have been frustrated at the lack of cooperation from the UK Government, which so far appears 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.”

The question of Scotland’s green ports has been at the centre of talks between the two governments for quite a few months, as Edinburgh decided to adapt the UK free port model to the Scottish context.

Adapting free ports to the Scottish model

First introduced in the UK in the mid-1980s, free ports are large areas with a defined perimeter – usually around a port, railway, or airport – where tax incentives are applied to draw investments to under

As reported by the BBC, between 1984 and 2012 the UK built seven free ports and the number was doubled in the March 2021 Budget.

To adapt the concept of free ports to Scotland’s context, the Scottish Government introduced the idea of green ports. Like free ports, green ports are large areas around airports and ports where tax exemptions are applied but only if operators adopt Fair Work First criteria.

Fair Work First is a set of flagship criteria set to promote sustainable growth and investment, helping Scotland to become carbon neutral. It includes measures such as banning the inappropriate use of zero-hours contracts and tackling the gender pay gap.

Simply calling a free port 'green' doesn't guarantee environmental and workers standards.

Scottish green ports were announced in January 2021, with Scottish Trade Minister McKee stating that the free port model would be replaced by the more sustainable green port.

“The reputation of free ports across the world is mixed, with concerns about deregulation and risks of criminality, tax evasion, and reductions in workers' rights raised,” the BBC reported him saying.

“That is not a model nor an approach that this Scottish Government will sign up to or allow here in Scotland.

“Instead, we propose to take the free port model and apply Scotland's priorities to it, so that it meets our ambition to deliver a net-zero, wellbeing economy that upholds the highest standards of environmental protections and fair work practices, and supports our strategy of building clusters of high productivity businesses across Scotland's regions."

While the decision was backed by the Conservatives, who had already been lobbying for it, the Scottish Green Party raised concerns about the project being a possible case of greenwashing.

“Simply calling a free port 'green' doesn't guarantee environmental and workers standards, and presents a real risk of greenwashing a deregulated race to the bottom,” the BBC reported environmental spokesperson Mark Ruskell as saying.

Scotland asks for clarity

In March, McKee wrote a letter to the UK Government asking for clarity on the future of green ports, stating that the UK Government had postponed the launch of the bid for the green ports.

“I have been clear that green ports will contribute to the Scottish Government’s ambitions to deliver fair work and enable a just transition to net zero,” explained McKee. “We are ready to launch the bidding process and, as far as the Scottish Government is concerned, the applicant prospectus is ready for publication now.

“We have been working with the UK Government on this in good faith. Regrettably, it would now appear that there is a lack of willingness on the part of the UK Government to sign up to our green port ambitions on fair work and net-zero.”

The applicant prospectus set out the requirements applicants needed to be part of the green port bidding process. According to the draft published in March, applicants must meet five objectives – including establishing the green ports as hubs for global trade and fostering an innovative environment – which will contribute to the Scottish national performance framework and national outcomes.

Putting Scottish ports at a disadvantage

Three months after asking the UK Government for clarification, McKee wrote another letter to Downing Street outlining how important investments are to creating a sustainable economy and how the continuous lack of cooperation is putting Scottish ports at a disadvantage.

In the letter, McKee said that Holyrood’s remained committed to partnering with central government, but it would also seek notes of interests from the industry.

“We want to ensure businesses in Scotland receive the same level of incentives and assistance from the UK Government as those offered to freeports in England,” he said.

“By working together and galvanising the expertise of businesses, trade unions, and workforces, we will seize Scotland’s economic potential and deliver greater, greener, and fairer prosperity.”

A few days later, McKee reiterated the Scottish National Party’s commitment to Fair Work First and environmental criteria.

“The Scottish Government will not be party to any offer that does not include these elements as articulated in our draft prospectus as published in March,” he said.

“Should the UK Government move forward with a proposal that does not include a commitment on fair work and net-zero, the Scottish Government will not support this initiative.

“To ensure there is not a race to the bottom on workers’ rights and the environment, the Scottish Government will challenge any attempts by the UK Government to impose their model in Scotland by legislating in devolved areas, which would be a breach of the spirit of the devolution settlement.”

Ship Technology Global has reached out to the Department for Transport for a comment but has not received a response.