Freeport in Glasgow: What is a freeport - and could one be in Glasgow?

As the UK and Scottish governments announce the implementation of green freeports in Scotland, here is all you need to know about them and what critics are saying.

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Despite disagreement from the Scottish Greens on the implementation of two green freeports, the Scottish Government, alongside the UK Government, will go ahead with the plans.

The Scottish Government insists the green freeport plans in Scotland will have decarbonisation and fair work at the heart of their approach.

But what are freeports, why are there disagreements between Scottish Greens and SNP around them, and could be one set up in Glasgow?

Freeports allow businesses to import goods without having to pay tariffs, i.e. taxes, to the Government (image: Getty Images)Freeports allow businesses to import goods without having to pay tariffs, i.e. taxes, to the Government (image: Getty Images)
Freeports allow businesses to import goods without having to pay tariffs, i.e. taxes, to the Government (image: Getty Images)

What is a freeport?

A free port is a free economic zone (FEZ) designated by the trade and commerce administrations of various countries.

The term is used to designate areas in which companies are taxed very lightly or not at all to encourage economic activity with taxation rules and duties determined by each country.

Following Brexit, the UK Government proposed the creation of ten free ports, with eight in England already confirmed.

It comes as the European Union was clamping down on 82 free zones after finding their special status had aided the financing of terrorism, money laundering and organised crime.

Could there be a freeport in Glasgow?

Locations have not yet been confirmed for Scotland, but a bidding process for the two locations will run from this spring until summer.

However, in July last year, the Scottish Government released a list of areas being considered for its own green port plans.

This list includes Dundee; a series of areas around the Firth of Forth; a similar collection of sites around Glasgow; Cairnryan, a port near Stranraer; Shetland; Orkney; Aberdeen and Peterhead; Rosyth and Montrose.

The Department for Levelling Up, Housing and Communities, which is leading the process, says it hopes the sites will be running by spring next year.

The Scottish Government’s aim is to publish a new prospective on the ports in Scotland in March, with the hope that winning bids will be announced over the summer.

Finance secretary Kate Forbes said the Scottish Government hopes the ports are operational at the end of this year.

What will the freeports in Scotland be like?

After months of disagreement over the set up around freeports in Scotland with the UK Government, the Scottish Government has now accepted the plans for freeports on a basis of changes.

The Scottish Government had resisted the idea of freeports, which are intended to revitalise deprived areas yet have been accused of encouraging tax avoidance and lower regulation.

Scottish ministers instead proposed the idea of green ports, based around low-emission industries and fair work practices.

The deal with Scotland appears to follow this model, but with the name of “green freeports”.

The plan proposed two green freeports, which can be rail or air hubs as well as seaports and they can apply alongside other local businesses, as well as the council and other public bodies.

Both the Scottish and UK governments will assess the bids and will have an equal say on the choice.

What is the SNP position on freeports?

Following previous disagreements surrounding the potential fraudulent activity freeports can be home to, the SNP have only recently agreed to the freeports based on changes to the agreement with the UK Government.

Outlining these changes, finance secretary Kate Forbes told BBC’s Good Morning Scotland: “Those are firstly that we will have equal say on the decision, so we are proceeding on the basis of a partnership of equals [with the UK Government].

“Secondly, we will get full, fair funding. The funding for the green freeports has essentially doubled from what it was a few months ago.

“Thirdly, there are decarbonisation plans at the very heart of the green freeport approach.

“And lastly, and most importantly for us, fair work will be embedded at the heart of that.

“There will be a fair process.”

Ms Forbes added: “If a bidder doesn’t adhere to fair work practices, then they won’t win.”

The finance secretary also said the Scottish Government would not support an economic initiative like this unless it “shifts the dial on net zero”.

What have the Scottish Greens said about freeports?

In what is probably one of the biggest disagreements since their cooperation agreement with the SNP, the Scottish Greens have distanced themselves from the implementation of the green freeports.

The Scottish Greens disagree with the freeports deal and have stated the venture gives tax breaks and public money to multinational companies.

Ross Greer of the Scottish Greens told BBC’s Good Morning Scotland the ports are a “corporate giveaway” and are a means of “greenwashing”.

Green freeports are excluded from the co-operation agreement with the Greens and the SNP.