Glasgow and Aberdeen have been named UK investment zones in a joint £160m project by Scotland’s two governments.

Glasgow city region and the North East of Scotland, including Aberdeen, will be the country’s two investment zones following an agreement between the UK Government and Scottish Government.

The UK Government has pointed to the pace at an agreement with Humza Yousaf’s administration at Holyrood after Westminster and Holyrood were caught up in a bitter row over freeports.

The Tory Government has placed investment zones as a key part of its levelling-up strategy.

Both the Glasgow city region and the North East investment zones will each receive £80m of funding.

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It is hoped that the tax incentives and funding that are being made available by the UK and Scottish governments will attract investment, improve skills, provide specialist business support and improve local infrastructure.

The concept of investment zones is focused around research institutions such as universities with an aim to drive growth in priority sectors including technology, the creative industries, life sciences, advanced manufacturing and the green sector.

UK Levelling Up Secretary, Michael Gove said: “This is an historic milestone as we widen the opportunity and ambition of the investment zone programme to grow the economy across the whole of the United Kingdom.

“I am very appreciative of the constructive approach the First Minister and Deputy First Minister have shown in the meetings I have had with them in recent weeks.

“We all have a shared ambition to work together to see all parts of Scotland thrive and today’s agreement builds on our successful rollout of green freeports in Scotland earlier this year.”

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Mr Gove pointed to Glasgow and Aberdeen as being “at the very heart of the UK’s economic success for generations”, highlighting “shipbuilding on the Clyde” and “oil and gas exploration in the North Sea”.

He added: “We want to build on this proud present and past so that Aberdeen and Glasgow continue to make a massive contribution to the UK economy.”

SNP ministers have claimed they have tailored the UK Government’s investment zone model to ensure it aligns with the Scottish Government’s national strategy for economic transformation, with the Holyrood administration stressing it supports innovation in sectors such as net zero, digital and life sciences.

The Scottish Government has pointed to a strong emphasis on fair work, mirroring the arrangements for green freeports, negotiated by SNP ministers.

The investment zones will be delivered by each area’s regional economic partnership.

They will propose which sectors should be the focus of support, taking into account regional strengths and activity within higher and further education institutions.

Regional leaders, businesses and universities will take the lead in shaping and developing specific plans.

Scottish Wellbeing Economy Secretary, Neil Gray, said: “This is a milestone in the delivery of investment zones in a way that enhances Scotland’s economy while aligning with our distinctive priorities.

“Scotland already has a strong track record in innovation and research and the investment zones can build on these strengths.

“They will form part of a joined-up approach that draws on the expertise of our world-leading research, education and training institutions, dynamic business sector and skilled workforce and will enable local communities to benefit.”

He added: “A rigorous process has been followed in selecting Glasgow city region and the North East and we look forward to working in partnership with them to create high-quality jobs and ensure that fair work practices, including payment of the real living wage, are embedded in the investment zones from the outset.

“We will, of course, continue to invest in all of Scotland’s regions, for instance through growth and city region deals, to build on their strengths and stimulate jobs and growth.”

Leader of Glasgow City Council and chair of the Glasgow city region cabinet, Susan Aitken, said: “Glasgow has a proven and long-standing track record in successfully delivering on investment and today’s announcement is an opportunity to build on that - for the benefit of our regional economy and the well-being and prosperity of our citizens.

“An international hub of investment and innovation, the success of Glasgow city region is key to the success of the Scottish and UK economies. But we’re also a region with the greatest need for public support to address deep-rooted inequalities.

“In the weeks and months ahead, we’ll work with government to develop the detail around the city region’s investment zone to deliver on our ambitions for economic growth, inward investment, sustainability and a more inclusive and equitable economy.”