The UK Government is prepared to step in and set up freeports with special tax status in Scotland if an agreement is not reached with Holyrood ministers.
We have learned talks are stuck on details including the Scottish Government’s preferred “green ports” name, details of tax relief and the number of locations.
Scottish trade minister Ivan McKee wrote to the Treasury last week, seeking to push talks along. He hopes for two fully funded sites from bidding port authorities, with Aberdeen seen by some as a frontrunner.
Freeports are given special status and can defer paying tax until products are moved on.
It’s understood the UK Government wants to keep the “freeports” name to maintain an internationally recognised title. There is also no assurance that as many as two ports will be awarded the status.
Green port model a ‘key objective’
McKee previously dismissed the UK policy but changed tack with a tailored proposal for Scotland.
He wrote to Treasury secretary Steve Barclay this month, asking for assurances “green ports” will have access to the same level of set-up cash as locations already announced in England.
McKee wrote: “I welcome that we are agreed on the importance of establishing an approach in Scotland that is fit for purpose.
“The Scottish green port model achieves that, with its focus on sustainable, inclusive growth, fair work, and a just transition to net zero emissions, which I know is also a key objective of the UK Government, alongside the core objectives of the UK Government freeport policy around regeneration, innovation and trade.”
However, with a reply still yet to be sent, it emerged significant hurdles are yet to be cleared.
‘UK Government will press ahead’
A UK Government source said: “We are very pleased the Scottish Government have reversed their initial opposition to the concept of freeports and we want to work with them.
“We are currently assessing how their proposals fit with our UK-wide vision for freeports and discussions on that continue between the two governments.
“But if we are not able to reach agreement on the details, we’ve been very clear that the UK Government will press ahead with rolling out the freeports programme to Scotland.
“There is a huge amount of interest across Scotland and a massive potential boost to the Scottish economy.
“For that reason, we want to move quickly. A number of freeport locations in England were announced in the Budget and it is important that Scotland does not get left behind.”