Highland freeport CEO faces scrutiny from YOU in exclusive Q&A

Inverness and Cromarty Firth green freeport and Forth green freeport were announced as Scotland’s two winning bids in January last year through the scheme agreed by the Scottish and UK governments - which offers special tax incentives and lower tariffs around ports, with the aim of stimulating economic growth.

But many say that there has been very little – too little – information out there on what they’re actually for, what benefits they are supposed to bring to Scotland, whether they are just another “Westminster power grab” and addressing the dangers they pose for criminality and workers rights.

READ MORE: What are green freeports? Everything you need to know about the schemes

You, our readers, sent in your questions and concerns and we have taken them to the CEO of Inverness and Cromarty Firth green freeport, Calum MacPherson, for an exclusive Q&A.

The questions below are either direct questions (in which case we have added a name) or were asked/echoed by multiple readers.

JW: We have had a lot of questions from readers about what is happening currently with Scotland’s green freeports. What has happened so far and what stage are we at now?

CM: Over three years ago there was a call for people to put their bids forward to be a green freeport.

About 30 organisations got together from the public and private sector in the Highlands – including businesses, large and small, as well as the Highland Council, the local university, the Enterprise Agency and then a lot of the ports in the area.

We raised the funds and the team to work on this, that submission was put in and it was only in January last year that we were confirmed as one of the two sites in Scotland.

But that was only the start of the journey. We then had to work on the outline business case, a huge document with a very defined process including trying to speak to local landowners, ports, harbours and business owners to garner support and put down the economic case including how many jobs we think will be created in the area, what markets we are going for and how we intend to support the overall development of the area.

We got formal approval of our outline business case by both the UK and Scottish governments on February 29.

Now from April 8, companies like Sumatomo – the Japanese firm that has agreed to invest £350 million into a major energy project in the Highlands – will be able to start exercising their benefits.

In the next few months, we have to present a final business case to the UK and Scottish Governments and they will then decide whether or not they want to adjust in certain areas.

JW: Why will the Inverness and Cromarty Firth green freeport be such a success when Teeside freeport in England has done nothing for the folk there? (James Carson)

Context: A damning review In January cleared the Teeside freeport – the largest in the UK – of cronyism and corruption due to a lack of evidence, but said taxpayers are not being guaranteed value for money or transparency.

CM: Freeports are in all different shapes and sizes across Scotland, Wales and England. And in terms of governance, ours is governed in a completely different structure.

We're in a wet and windy region with deep sea locks and infrastructure, which means we're at an advantage.

This is already shaping up to be the biggest cluster of offshore engineering capability in Europe. And that's because of some of the historic assets we have in the area.

The second reason why it's going to be a success here is the real crisis we have in terms of population. For somewhere like Thames Port in London, it's interesting but it's not going to change the economy of London. They've got a big population in many other industries in that area.

For the Highlands, this is the biggest show in town for a generation and behind it, from our perspective, is a huge amount of job creation.

We know there's not the job opportunities in the area, which is why we keep losing thousands of people. So for that reason, we know that if we're able to create good jobs, it's going to benefit the region.

JW: How do you respond to our readers' concerns that there is a lack of regulation with green freeports?

CM: It's exactly the opposite. I've been involved in lots of things, public and private sector. But because we are the local authority, as Highland Council are the accountable body, any public money or resource we do anything with is governed by the local authority.

We then have the Scottish Government who have a strong hand in this, a dedicated team. And then we have all the departments in the UK Government. This is extremely heavily regulated and monitored.

All of the freeports are different, with different governance arrangements and structures. And this is something I really want to highlight. The green freeport in the north of Scotland here is with that company limited by guarantee with no shareholding.

We're not-for-profit and any reserves we generate – either from the public money we receive or from donations or contributions from private landowners – we accumulate and use on our costs going forward.

We also don't own any assets. So we've got no intention of owning publicly held assets and selling them. We're not operating on the same basis as some of the freeports are.

JW: What will the effect be on local communities? (James Cairns)

CM: I'm from the local area, I get a lot of these questions, especially if I'm sitting watching Ross County. They say that the local community will be under strain because there's going to be a pressure on services and housing etc.

For the first five years, there's a non-domestic rate holiday for new infrastructure.

So existing infrastructure, even on the tax sites, they still pay on domestic rates as they've always done.

It's only the new infrastructure, new investment that gets it.

So for the first five years, the amount that we would have collected through that infrastructure is getting paid to the Highland Council area by the Scottish Government.

So we will have a fund to try and improve things like access to roads, community facilities – maybe new nurseries and all those things that we need to help the area grow.

And then for the next 20 years, even once the non-domestic rate holiday is finished, that fund – which could be very significant because of the scale of investment that’s coming in – is being retain to help the area.

READ MORE: 'Scotland's green freeports are biggest industrial development in a generation'

So local communities are going to get a heightened amount of financial support through the freeport and the council working together to help with, say, trying to attract doctors and nurses to rural areas or more apprenticeship scheme places.

We're speaking to the Scottish Government and local authority about how we can accelerate housing, not just for the people coming in but for the thousands who are already on waiting lists in our area.

And my view is not three and four bedroom bungalows. This is really about flats, affordable housing because it's really difficult for young people. It's probably up there in the top three things that we have to get sorted to make it all work.

JW: How will you ensure workers’ rights are respected?

CM: One of the things we've done is that we've asked all the landowners and all those who are going to be in the tax sites to sign a fair work charter. It’s in their contracts for them to receive their benefits.

It’s following the Scottish Government Fair Work First guidance. This includes things like they must pay the real living wage, no inappropriate use of zero-hours contracts, voices for employees.

On top of the protections that we normally have in Scotland, we've added another layer of protection because we fundamentally believe unless you have attractive terms and you treat workers fairly, you're not going to get workers in this part of the world.

JW: But how is that enforceable?

CM: All the people who have been included in our tax sites, we got them to sign tax site delivery agreements including their obligations in reporting back to the Scottish Government and to the UK Government.

It also says that if you're coming to this area and you breach some of these fundamental in our fair work approach, then you won't be getting the tax benefits.

JW: Do you have that power?

CM: To be totally transparent, the local things like non-domestic rate relief and some of those elements are easier for us to control. Obviously the tax sites are created by a UK Act of Parliament so where they breach that we would then look at how we can change the legislation.

But we've got support from the UK and Scottish governments that if somebody isn't playing ball, then we will enforce that and we will also act locally we can hit them quickly.

We have, in contract, the ability to sanction people that don’t follow these rules.

JW: Studies have found that freeports have a high risk of criminality, including smuggling. Why won’t this be an issue with the Highlands scheme?

CM: It's not that relevant to us. Our focus is on large heavy engineering. These are things you can see move from Google Earth.

Also anywhere where there is a custom site within the freeports, there's increased activity from the border force and customs in HMRC.

Where maybe in other parts of the world, it's been something that's emerged, in my view it's a completely misfounded fear.

JW: But it is an issue that has arisen with freeports worldwide. You say there will be a higher presence but it’s not operational yet?

In other areas of the world where I understand some of this has become an issue, you're talking about high-volume import and export ports with containerised systems and huge volumes of marine traffic going in and out.

We don't have any container system. We have no container ports here. We have no logistics hubs that deal with goods. That's not what our ports and harbours are even built for.

JW: In your view, why won’t Scotland’s green freeports be another “Westminster power grab?

CM: If you look at the the majority of the benefits, the meatier ones if you like, are the Land and Buildings Transaction Tax relief and the non-domestic rates relief.

Those are both issues that are handled and managed and controlled within Scotland.

From that perspective, I see a significant amount of control coming through the Scottish Government.

And without the local authority being our accountable body and the support of the Scottish Government, we wouldn't have a freeport.

I would say that the Scottish Government still have an extremely firm hand on what happens here.

I can't see how the benefits could be taken from this area. It's rooted in the Highlands. And as far as I'm concerned, the Scottish Government have been linked in the whole way through this process.

Our freeport series continues: Tell us your burning questions in the comments as we keep exploring all the arguments.