THE sight of the SNP Government getting a lambasting this week over the free ports issue from the Greens to whom it has pandered could have been laughable if the issues involved weren’t so serious.
Finance minister Kate Forbes announced on Monday that an agreement had been reached with the UK Government following “robust discussions” that would secure £52m funding to support the development of what she billed as two Green Freeports in Scotland.
Firms will be offered tax breaks in order to encourage them to locate in the ports which Ms Forbes appears confident could help galvanise the green economy in Scotland. Places such as Dundee and Cairnryan are likely to enter the bidding process which will close this summer.
In the announcement of the agreement struck with the Johnson administration at Westminster, Ms Forbes declared: “As we look to grasp the many opportunities of achieving net-zero, the establishment of internationally competitive clusters of excellence will help us create new green jobs, deliver a just transition and support our economic transformation.”
Such talk probably won’t impress sceptics who reckon freeports will just displace activity that would have happened anyway in other parts of the country. There have long been concerns that freeports may provide unnecessary subsidies for big corporations and could potentially be abused by the likes of people traffickers.
Ms Forbes and colleagues reckon they have come up with a model that is much better than the freeport scheme launched by the UK Government last year which the SNP administration refused to support.
She said the agreement enshrines the Scottish Government’s commitment to achieving net-zero and embedding fair work practices through public investment.
“The Scottish Government will have an equal say on all bids, and will expect bidders to adhere to fair work practices including payment of the Real Living Wage,” noted Ms Forbes.
With Whitehall sources reportedly dismissing the differences between the UK and Scottish schemes as cosmetic, Greens reacted with horror. The Scottish Green Party’s finance spokesperson Ross Greer thundered: “A little greenwashing won’t change the grim reality of these ‘freeports’.
“They are yet another way of handing tax breaks and public money to rich corporations, despite no evidence that it will create real economic prosperity.”
While ports were excluded from the co-operation agreement struck with the Scottish Greens in August, the SNP may still feel hard done by after taking so long to come up with a scheme that would allay concerns about freeports .
Anyone who says anything remotely supportive about these runs the risk of being dismissed as a corporate lickspittle.
However, it does not make sense to refuse to consider having freeports in Scotland because there may have been flaws in past schemes. It should be possible to guard against abuse, in the way that the key European Regional Development Fund scheme was tightened up after controversies about projects supported in Scotland.
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Amid competition for investment from firms that are willing and able to invest in the plants needed to support the development of offshore windfarms and the like the benefits of being able to offer freeport status appear to be real.
Teesside has enjoyed a huge boost since securing that status. US giant GE has announced plans to develop a turbine blade manufacturing plant that is expected to employ around 750 people in the area and more announcements are thought to be in the pipeline.
Geographical factors mean Teesside is well-placed to win work from firms developing facilities off Scotland.
Scotland could have provided much stiffer competition to Teesside if the SNP Government had not dug its heels in about freeports.
In December Tees Valley’s Conservative mayor, Ben Houchen, told the BBC: “We have attracted investors who were originally looking at Scotland when some areas in Scotland were looking at freeport status, and when they decided not to move forward with the current UK freeport policy (they) have actually abandoned Scotland.”
Even supporters of the SNP reckon the differences between Green Freeports and the UK Government’s freeports are not that significant.
The convenor of the SNP trade Union Group, Bill Ramsay, said this week: “On the face of it, the decision to do a deal with the UK Government on these deregulated zones risks undermining devolution and opening a dangerous unregulated backdoor into the Scottish economy.”
The unfortunate reality is that, given the urgency of the climate change challenge and the need to address it without choking the economy, corporations that have the expertise and capabilities required are in a strong position to call the shots. The availability of subsidies was a big factor in the appeal of the recent ScotWind leasing round which attracted bids from oil and gas giants and financiers from around the world.
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There are strong arguments for the state to fill gaps that could appear if corporations are not prepared to work on the terms taxpayers want. However, it would take time to develop the operations required: we may not have much of that.
A flagship report issued last week by the Scottish Renewables industry body has underlined the scale of the challenge facing Scotland in terms of the transition to a less carbon intensive system and related labour market issues.
Investment in windfarms and the like has been booming in Scotland for years. A range of firms have been trying to prove that earlier stage technologies such as wave and tidal energy could play a big part in the transition.
And yet the latest supply chain impact statement from Scottish Renewables will do nothing to counter claims that the impact on the economy and jobs has been much smaller than hoped for.
The third edition of its glossy Supply Chain Impact Statement spotlights 32 firms working across Scotland’s renewable energy industry, which the organisation said employs 22,660 people.
The 22,660 figure comes from a study completed by the Fraser of Allander Institute at Strathclyde university last year and includes jobs supported by renewables firms’ activity as well as those of people directly employed in the industry.
Yet a 2010 report commissioned by Scottish Renewables forecast that the offshore wind sector alone could create 30,000 full-time equivalent jobs by 2015.
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Scottish Renewables said last week: “ Industry could grow by more than 230% by 2030 if onshore and offshore wind plans are realised”. If job numbers rose in line they could total around 75,000 by 2030.
To put that projection into context, the latest research by the oil and gas trade body formerly known as OGUK found the industry supports around 120,000 jobs. OGUK changed its name to Offshore Energies UK on Monday, to recognise the role members are playing in the development of energy sources such as offshore wind.
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