The SNP Have Joined Forces With The Tories To Create ‘Green’ Scottish Tax Havens
‘Freeports’ are a new way of handing tax breaks to big businesses.
by Jonathon Shafi
20 January 2023
Last week, in Inverness, Scotland’s first minister met with the UK prime minister for a working dinner. On the eve of a new pitched battle between the two governments, ostensibly around the gender recognition reform bill, Nicola Sturgeon and Rishi Sunak found agreement on other matters. Indeed, they were in total alignment when it came to one issue in particular: freeports. Or as public relations advisors have badged them: ‘green freeports’, aka subnational tax havens.
Opposition to Brexit has been at the core of SNP communications since the 2016 referendum, emblazoned on election battle buses, alongside promises of a return to the European Union. For many, European institutions have come to personify a set of moral values, despite the EU record on democracy and austerity. Yet in freeports, the SNP have signed up to the most economically rightwing incarnation of the Brexit project under the Conservatives.
Two such areas are planned for Scotland. The Inverness and Cromarty Firth freeport will focus on industries around offshore wind, hydrogen and nuclear, covering seaports in the region as well as Inverness Airport. A second will be established at the River Forth and will include ports at Grangemouth, Rosyth and Leith, and Edinburgh airport. The introduction of these sites follows the privatisation of Scotland’s wind energy assets, which are now a source of huge profits for multinational corporations, including oil giants Shell and BP. These international firms have snapped up natural resources at rock-bottom prices and without a guarantee of supply line jobs, while Scotland is set to lose billions in potential wind-farm monies.
The origins of freeports, in British terms, reside in a paper produced in 2016 by none other than Rishi Sunak for the Centre for Policy Studies, a free market think-tank co-founded by Margaret Thatcher. In it he argues for a network of freeports, mimicking so-called ‘free zones’, ‘foreign trade zones’, or ‘free-market enterprise zones’ across the UK. It is crucial to grasp the political strategy underlying the plan. As historian and author of Globalists: The End of Empire and the Birth of Neoliberalism Quinn Slobodian notes: “The real utility of freeports may in fact be ideological.”
He references the thinking of Stuart M. Butler, former director of the libertarian Heritage Foundation. Writing in the early 1980s on the matter of ‘enterprise zones’ – in this case applied to urban centres rather than to ports – Butler proposed the following thesis: “Create areas in the inner cities where individuals are provided with lower taxes and less regulation, and political pressure will build to spread freedom […] the enterprise zone offers a chance to plant free enterprise deep in enemy territory, where it can corrupt from within.”
Freeports serve the same function. Operating outside customs areas, they are delinked from national and local democratic structures in favour of big business. In these outposts, special ‘tax incentives’ and lower tariffs apply, while global firms enjoy a reduced regulatory environment. Yet the consequences go well beyond the designated territories, spreading into wider parts of the society and economy. For this reason, the Trades Union Congress (TUC) warns that freeports are a “Trojan Horse to water down employment protections.”
The SNP’s approach to economics is characterised by the primacy of the corporate lobby, a focus on servicing international capital and a commitment to waning neoliberal orthodoxies. That orientation has also been hardwired into the independence prospectus itself, in the shape of the Growth Commission and the Sterlingisation currency proposal, which would leave UK financial institutions in charge of the Scottish economy. It is in this context that freeports nestle.
Greenwashing plays a central role in this process. Scotland’s freeports are portrayed as part of the strategy that will achieve ‘net zero’ and a ‘just transition’. Incredibly, they are cast as part of the ‘well-being economy’. The Scottish Greens formally oppose the plans, which they describe as “mini tax havens where big corporations can get off the hook from paying their fair share towards keeping public services like the NHS going”. The Greens have clashed with their government partners over the issue in the press, but have fallen short of making it a red line when it comes to the cooperation agreement with the SNP.
Trade unions too are under no illusions about the wordsmiths in the Scottish government, and the mantras deployed to mystify the reality of the freeport policy. Unite, for example, has demanded an urgent meeting with government officials. The union’s Scottish secretary Pat Rafferty declares: “It remains absolutely unclear if the Scottish government’s greenports proposal will be legally binding in Scotland particularly over enforcing the real living wage. We have zero clarity on whether trade unions will be able to access and organise workers operating within the zones, and to bargain with employers over pay, terms and conditions.”
SNP members have also voted overwhelmingly against freeports at their own conference, through a motion presented by the SNP Trade Union Group, which demanded a series of strict assurances, including mandatory trade union recognition. As group convenor Bill Ramsay made clear last year: “We have concerns about the introduction of freeports in Scotland […] our party agreed six clear conditions which we believe makes them untenable. These conditions also apply to the greenport variant, which was rejected by the SNP party conference in September 2021.”
As with all such initiatives, capital and democracy are in conflict. With freeports, the SNP leadership has chosen to come down on the side of the corporate establishment through the apparatus of the British state. In doing so they not only undermine trade unions, and the views of their own members, but pretensions towards meaningful national sovereignty.
Jonathon Shafi is a columnist for Novara Media and socialist campaigner, based in Glasgow. He writes the weekly newsletter ‘Independence Captured’.