The following two articles address the issue of the SNP’s acceptance of Tory ‘freeports’. The first by Jonathon Shafi was first posted by Novara Media. The second is an edited version of an article by George Gunn which first posted by bella caledonia.
1. THE SNP HAVE JOINED FORCES WITH THE TORIES TO CREATE ‘GREEN’ SCOTTISH TAX HAVENS
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 delinkedfrom 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.
2. A HURL ON A NEUGLE
In the semi-legal world of Conservative “policy”, process, strategy and strategic planning often get side-stepped for no apparent reason and for no conceivable gain. The announcement that the Cromarty Firth and the Firth of Forth are to be Scotland’s two new “green freeports”, I would suggest, is one such instance of calamitous thinking. Just what the Scottish government realistically hope to get out of this dodgy project is anyone’s guess.
What is a freeport? Well, freeports, or zones, are designated by the government as areas with little to no tax in order to encourage economic activity. While located geographically within a country, they essentially exist outside its borders for tax purposes. Companies operating within freeports can benefit from deferring the payment of taxes until their products are moved elsewhere, or can avoid them altogether if they bring in goods to store or manufacture on site before exporting them again.
Kate Forbes, Scotland’s finance secretary, has said:
“I am pleased we have been able to reach an agreement on a joint approach that recognises the distinct needs of Scotland and enshrines the Scottish government’s commitment to achieving net zero and embedding fair work practices through public investment.”
Kate Forbes, who is usually clear headed, is delusional on this. Freeports mean little if no regulation. Worker’s rights and health and safety will be generally ignored. Trade unions will not be represented on the boards of the freeports. Britain’s main maritime union, the RMT, says it supports green job creation but fears freeports could result in workers in some of the poorest communities signing away their rights. Its general secretary, Mick Cash told the press last week,
“Without strong employment rights, automatic trade union recognition and tax laws that make sure international owners of UK ports contribute, freeports are doomed to fail the communities they are designed to help.”
Taking on and implementing the Westminster scam of freeports is not public investment. It is chicanery and safe hoarding opportunities for spivs. As far back as February 2021 Paul Monaghan, chief executive of the Fair Tax Mark scheme, noted :
“These ‘sleaze ports’ are very much mini-tax havens domiciled within the UK. It’s going to leak out into the wider economy – it will result in a massively reduced contribution from business to the Treasury. Businesses which are rooted in communities wish to stay and play a part in society and pay fair tax – why should they be undercut by hot capital and flighty businesses that can exploit these zones?”
Monaghan says the zones have proved magnets for illicit financial flows and criminal activity, adding: “One of the reasons for them existing is the absence of regulations and checks – it’s a consequence of what they are.”
Another danger is that “new” business at the freeports will simply be existing jobs and economic activity relocating from now disadvantaged locations in the rest of Scotland, as the playing field is no longer level. The other aspect of this is that the establishment of freeports bypasses our democratic process. As Robin McAlpine of Common Weal has written (19/01/23),
“Sadly what we are not getting is what we really ought to be getting, which is a proper industrial strategy and a proper economic development plan for Scotland’s coastal and island economies. Far from helping the development of those economies, freeports are likely to damage them.”
Robin McAlpine goes on to say that even with two freeports, Scotland would be a country with very limited ability to trade with the world other than via another country. Almost everything made in Scotland would be driven to England if it was to be transported anywhere else in the world. What Scotland actually needs is an Atlantic trading port on the west of the country and a European trading port on the east with a high speed rail and freight link running between them. We also need a port in the north of Scotland that trades with Iceland, Faroe and Scandinavia with a direct ferry link to Bergen and Copenhagen. Instead of this we are to have two freeports of dubious actuality.
In his 1943 “autobiography”, ironically titled “Lucky Poet”, the poet Hugh MacDiarmid begins chapter 8 with a description of his life thus, “It’s all just a matter of a Hjok-finnie body having a ride on a neugle.” What the irascible poet meant by that was that his life was a gamble, an adventure. In Shetlandic folk-lore a “Hjok-finnie body” is a Finn who has been buried but who has risen up again. A “neugle”, also from Shetlandic folklore, is a water horse, a kelpie or each-uisge in Gaelic, and is a creature that if a mortal alights it then they are dragged to their doom beneath the water. It was just one of the many metaphors MacDiarmid conjured up in order to delve deep into the mystery of Scotland’s genius for self-suppression. =
Neugles, Rides and Freeports
In Caithness Scots a “ride” on a neugle would be a “hurl” on a neugle. “Hurl” being more anarchic than “ride”. For Scotland to actually endorse and operate two freeports would not be so much like going for “a hurl on a neugle” but going for a “hurl” on the wrong “neugle”. Such a mad adventure may suit the sensation seeking poet but I fear it is not a suitable course of action for an emerging small European nation.
Freeports, no matter how the Tories try to sell them and how the Scottish government attempt to mitigate them, are an extension of Brexit and tax evasion and a reaction to tax evasion clamp-down which both the European Union and the US government are keen to employ. A report from the European parliament last year noted that a growing demand for free ports could in part be explained by a recent global crackdown on tax evasion. The US Foreign Account Tax Compliance Act and the Organisation for Economic Co-operation and Development’s 2014 Common Reporting Standard has made it hard for individuals to escape taxation on proceeds of funds held in bank accounts. Spivs don’t like regulation. Freeports are a harbinger of the corporate totalitarianism that is the Tory wet-dream: 21st century Singapore-like UK as a manifestation of ancient Venice. In many ways freeports are throwback to the Middle Ages and as Guy Debord once wrote, “Fascism is technologically equipped primitivism.”
Even though misinformation and disinformation have infused and distorted our debates about almost every pertinent political problem the question must be asked, what next after freeports, that is if they are established? Will it be corporate cities or fiefdoms, fenced areas out with where the normal rules of Scots law – or any law – apply, run by private companies and policed by private militias in which environmental and workplace protections are almost entirely stripped away?
We are all, we would hope, conscious of facts, despite the media. Likewise I would hope that we are all conscious of values, despite the Tories. But a fact which has no value is not a fact and a value which is not a fact has no value. Freeports have no value for a modern Scotland. That this Tory government is bad for Scotland is a fact. Rishi Sunak and Michael Gove et all can go for a hurl on a neugle of freeports as is their want, but the people of Scotland have to go on a different journey and on a more reliable vehicle. It is called democracy and democracy is the defensive wall that spiv capital is always striving to breach. We need a free country not a freeport. Once that is achieved we can all go for a hurl on our very own neugle.