PLANS to set up two freeports in Scotland are set to be confirmed after an SNP minister was replaced by his boss in leading discussions with Westminster officials.
Scottish Government Minister for Business, Trade, Tourism and Enterprise, Ivan McKee has reportedly been dropped as lead negotiator after he claimed the UK proposal "does not respect devolution, undermines the Scottish economy and fails to provide equivalent funding to what is on offer for ports in England".
Centred around docks, airports or railway hubs, freeports are designed to encourage economic growth by exempting goods arriving in them from tax and customs charges.
Businesses based in and around the freeports can then use this lower-cost material to manufacture goods and export them again without ever paying the full tariffs.
The Scottish Government drew up its own green port plans, which would require companies to be signed up to the real living wage and include climate commitments. But these “red lines” have been rejected by the UK Government over fears it could make them less competitive than other freeports being set up.
Finance and Economy Secretary Kate Forbes is now taking the lead for the Scottish Government and negotiations appear to have revived for two freeports to be set up north of the border.
Mr McKee told MSPs this week that recent discussions “have been very constructive”.
He added: “We have been in active discussions for the last few weeks with the UK Government on a joint approach that will deliver a full package or reserved and devolved incentives to Scottish ports that apply to green ports.
“Those discussions have been positive so far and we do hope to set out the way forward very soon.”
Under the Barnett arrangement, Scotland should only be due one freeport, but UK ministers are keen for two arrangement to be set up north of the border.
It is believed that the UK Government has not changed its opposition to requirements around the real living wage and climate commitments.
A UK Government source said: “It is fantastic news that we are on the verge of a deal. The Scottish Government has come a long way to work with us to deliver two Scottish freeports, which will bring a tremendous economic boost as part of our levelling up agenda.
“We want to work with the Scottish Government to deliver for the people of Scotland so it is great they have overcome their initial hostility.
"Kate Forbes deserves credit for keeping an open mind on the issue. By Scotland’s two governments working together, Scottish freeports can benefit from the full range of reserved and devolved tax breaks and be part of the internationally recognised freeport brand.”
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