Freeport plan risks undermining devolution, ministers warn

UK ministers have been warned they will be undermining devolution if they set up new freeports in Scotland and Wales without the backing of the devolved governments.

Scottish Government ministers said they will “challenge any attempts by the UK Government to impose their model in Scotland by legislating in devolved areas”, insisting such a move would be a “breach of the spirit of the devolution settlement”.

Holyrood business minister Ivan McKee issued the warning at the same time as he and ministers from Wales demanded clarity on funding for freeports – special economic zones offering tax breaks and lower tariffs for businesses as a part of the UK Government’s “levelling up” agenda.

Both the Scottish and Welsh administrations fear being short-changed on this, when compared to the funding being made available for freeports in England.

A UK Government source branded the claims from the Scottish Government “nonsense”.

The source said: “Rather than work constructively with us on creating much needed jobs in Scotland, the Scottish Government would rather waste time playing political games.”

McKee, however, insisted the funding proposed by Westminster is “unfair and disadvantages ports in Scotland compared to their competitors in England”.

In a letter to Scottish secretary Alister Jack, he claimed the model proposed by Westminster would see UK ministers decide the location of freeports in Scotland, only for the capital funding to come from Holyrood’s budget.

He told the Scottish secretary: “Collaboration and joint working across devolved and reserved competencies requires joint decision making, and I would ask that you reconsider this position and agree to joint determination, or I must conclude that you are making an offer that you wish us to reject.”

The minister insisted the Scottish Government “remains committed to working in partnership with the UK Government” on freeports.

But he added: “We cannot sign up to a UK policy which does not respect devolution, undermines the Scottish economy and fails to provide equivalent funding to what is on offer for ports in England.

“UK ministers have failed to work with us to ensure their proposals best meet the needs of business and communities in Scotland.”

He also said that if the UK Government presses ahead with plans that fail to include commitments on fair working and net-zero emissions, “the Scottish Government will not support this initiative”.

McKee stated: “To ensure there is not a race to the bottom on workers’ rights and the environment, the Scottish Government will challenge any attempts by the UK Government to impose their model in Scotland by legislating in devolved areas, which would be a breach of the spirit of the devolution settlement.”

Meanwhile, Welsh finance minister Rebecca Evans said the Government in Cardiff had “consistently attempted to engage constructively with the UK Government and reach agreement on a way of implementing freeports in Wales which is consistent with our priorities and values as a Government”.

But she added: “The UK Government is pressuring the Welsh Government to redirect its resources to deliver a UK Government policy priority.

“This approach is unacceptable to us, and we have made clear that the UK Government needs to demonstrate the same level of financial commitment to freeports in Wales as they have in England.”

Welsh economy minister Vaughan Gething added: “The UK Government’s continued refusal to engage constructively suggests that they would rather risk undermining devolution by implementing a flawed freeport without our support than work with us to deliver benefits for Wales.”

A UK Government spokeswoman said: “The UK Government is committed to bringing freeports to Scotland and Wales.

“It has huge potential to boost the Welsh and Scottish economies and create hundreds of highly skilled jobs.

“We know there is strong support from stakeholders, who are keen to see progress. We hope the Scottish and Welsh Government will decide to work with us on this.”