By Ivan McKee

There has been some attention recently on the two proposed Scottish Greenports. As the architect of the current scheme – negotiated with the UK Government while I was the minister responsible – I though it helpful to lay out some of the facts, myths, challenges and opportunities that surround the proposal. Why - once the UK Government had agreed to our ‘red lines’ - it was right for the Scottish Government to support our Greenports. And what needs to happen now for the ports to be successful and avoid some of the legitimate concerns that have been raised.

Freeports are nothing new. They existed in the UK until around 2012 and still exist in several EU countries – so aren’t incompatible with EU membership. They can take many forms depending on local circumstances and priorities, but the common feature is usually that they sit outside of existing customs tax boundaries meaning that goods pay duties on leaving the port gates rather when they arrive from overseas. Although in a world with low and reducing tariff barriers the financial benefits that brings are minimal.

It’s important to note that Greenports don’t – contrary to some misinformation circulating – exist outside of national laws or existing regulations. All the employment laws and environmental protections that govern how a business operates outside of the port also apply within it. Businesses operating with the ports tax zones qualify for some time limited tax reliefs, but tax reliefs for businesses to stimulate economic activity are nothing new, be it the small business bonus or the tax reliefs available in Scotland’s sixteen existing enterprise areas - spread around the country from Irvine to Forres.

Contrary to other misinformation the Greenport tax zones themselves only cover a relatively small area, a maximum total of 600 hectares each, or around two square miles. Claims of Scotland seceding sovereignty over large swathes of our country are overblown nonsense.

So what are the point of Greenports, and what is hoped to be achieve through their implementation? It’s important here to understand Scotland’s economic strategy – laid out in the National Strategy for Economic Transformation – to build a high wage, high innovation economy focused on sectors where we have inherent advantages in natural resources and skills – key amongst those being offshore renewables.

Competing internationally on cost – a ‘race to the bottom’- is a mug’s game, there is always someone willing to undercut you. Scotland’s competitive advantage lies in our technology (some of the best universities in the world), our skilled workforce (the most educated population in Europe) and our natural resources, but we need to create the environment where we can make the most of those advantages.

One of the key objectives of Greenports is to secure a world leading position in renewable energy by building clusters of manufacturing excellence that attract investment, technology and skills and give Scottish businesses a chance to grow to their potential as part of global supply chains. Business want to locate close to their customers and suppliers. It makes logistics and technology and skills transfer much easier, particularly in a rapidly evolving high investment sector like renewables.

The negotiations with the UK Government that led to the creation of Greenports were tough – stalling at several points until Westminster agreed to our ‘red lines’ – on Fair Work, Net Zero and equal funding for Scottish ports. The outcome is a model which is consistent with the demands of SNP conference and trade union groups, including requiring all businesses to pay the real living wage as a minimum, and for local democratic involvement with local authorities being key partners in the governance of the ports. Ensuring full regulatory compliance within the port is a critical, and non-negotiable, element of the Greenport model.

It would, frankly, have been easier to throw our toys out of the pram and refused to be part of the process. That might have gained some short-term headlines but would have done damage to Scotland’s prospects of delivering on our huge economic potential in renewables manufacturing over the coming decades. It was important to ensure that Scottish ports had the ability to compete on a level playing field with those just over the border. Not to do so would have made it too easy for global manufacturers, and Scottish supply chain businesses, to relocate to Teesside or Humberside rather than Cromarty or Forth.

The decision by Sumitomo to invest in a new £350m cable manufacturing plant in the Cromarty Greenport is just one of many such investments in the pipeline that could easily have gone elsewhere.

What happens next is just as important. The Scottish Government needs to be on the front foot, not just issuing bland comments in response to press enquiries. It needs to address head on some of the inaccurate misinformation that is circulating. But most importantly it needs to continue with the robust approach to engagement with the UK Government that has delivered results so far.

Ensuring no backsliding on commitments to ensure proper monitoring of activities within the ports. Auditing businesses within the ports to ensure compliance with net zero and fair work requirements including on payment of the real living wage as a minimum, and not being afraid to withdraw devolved tax benefits where necessary in instances of non-compliance. And it needs to monitor any risk of displacement. For most businesses incurring all the costs of moving site to gain some limited tax reliefs in the absence of any other strategic benefits – particularly when the wage bill may also increase due to fair work requirements – probably doesn’t make business sense, but if that starts to be a significant factor steps should be taken to address this.

If done right Greenports can not only help to power the building of a globally competitive renewables manufacturing sector in Scotland, aligned with a much needed green industrial strategy, they can also be a model for how conditionality in government support can be leveraged to drive up wages and employment standards in the absence of the devolution of employment law. Done right Greenports can be a key element in a successful Scottish industrial strategy.

Ivan McKee is an MSP and former Minister for Business, Trade, Tourism and Enterprise