Rishi Sunak vows to work ‘constructively’ with Nicola Sturgeon as he announces new funding

Rishi Sunak and Nicola Sturgeon held talks at a private meeting in Scotland. Credit: Simon Walker / No 10 Downing Street

Rishi Sunak has said he wants to work “constructively” with the Scottish government, as it was revealed that Scotland is to gain its first green freeports amid a drive for growth and jobs north of the border.

It comes after the prime minister met with Scottish first minister Nicola Sturgeon behind closed doors on Thursday evening, marking the second time he has met the Scottish National Party leader since entering Downing Street in October.

The new funding will “create thousands of high-skilled green jobs, drive growth, potentially bring in billions of private sector investment and provide opportunities for people across Scotland”, according to Downing Street.

Inverness and Cromarty Firth green freeport and Forth green freeport were selected by the Scottish and UK governments to become Scotland’s first green freeports.

The two winning bids will be supported by up to £52 million in start-up funding and will benefit from tax reliefs and other incentives through a combination of devolved and reserved powers.

Applicants to become a green freeport in Scotland were required to demonstrate how they would contribute towards a just transition to net zero emissions by 2045 and create new, green jobs.

In an interview with broadcasters on Friday, Mr Sunak said the freeports will bring jobs and investment to the region, as he says they have done in England.

'People are so excited about what this means for their local area,' Mr Sunak said

What is a freeport?

Freeports are parts of the UK which will be given their own set of economic regulations.

They can be airports as well as seaports and exist within the geographical boundary of the UK but outside of its customs system.

These "limbo" areas are exempt from customs duties and tariffs and duty is only paid once a finished product passes through that imaginary border and enters the UK market officially.

Businesses operating within those areas will be subject to special tax arrangements, planning policies, and customs policies.

They will be able to re-export goods that have not entered the UK market without paying duties and will benefit from tax incentives such as relief from stamp duty and lower national insurance contributions.

Scotland’s Deputy First Minister John Swinney said: “This is a milestone achievement in the process to deliver green freeports for Scotland.

“Inverness and Cromarty Firth green freeport and Forth green freeport will support businesses to create high-quality, well-paid new jobs, promote growth and regeneration, and make a significant contribution to achieving our net zero ambitions.

“A rigorous joint selection process has been followed. The successful applicants showed a strong determination to embed fair work practices, including payment of the real living wage, and to enshrine net zero initiatives in their work.

“We look forward to working closely with them to ensure they deliver maximum positive impact and become operational as soon as possible.”

Following the talks on Thursday evening, the prime minister said that while they are “not going to agree on everything”, he believes there is scope for co-operation.

“What I want to do as prime minister of the United Kingdom is work constructively with the Scottish government to make a difference to people in Scotland,” he told BBC Radio Scotland’s Good Morning Scotland programme.

“We’ve got lots of challenges that we all face collectively around the UK and where we can work together and make a difference, we should.”

Ms Sturgeon said their meeting had been “perfectly constructive and cordial” and included a discussion on the pressures facing the NHS.

However, she said Mr Sunak had not come with a promise of any new money for the health service in Scotland.

“No indication from the prime minister of new money, but hopefully we will see strong investment in the NHS,” the First Minister told Good Morning Scotland.

“The Scottish government continues to work hard to avert strike action in the NHS.”

His visit comes at a time when the UK government’s relationship with the devolved administration at Holyrood has been strained, not only by Ms Sturgeon’s continued push for independence, but by the potential for Westminster to block Holyrood’s gender recognition laws.

Last month, MSPs passed the Gender Recognition Reform (Scotland) Bill, approving changes which will allow trans people to obtain a gender recognition certificate without the need for a medical diagnosis.

First Minister Nicola Sturgeon said her meeting with Rishi Sunak had been constructive Credit: Russell Cheyne/PA

Downing Street said no decision has yet been made on whether to invoke section 35 of the Scotland Act, which would block royal assent.

Mr Sunak said on Friday that he is “concerned” about the impact across the wider UK of changes in gender recognition legislation passed last month by the Holyrood Parliament.

The PM declined to say whether Westminster could block the legislation, saying the government is taking advice on the issue “as is completely standard practice”.

He added: “Obviously this is a very sensitive area and I know there were very robust debates and exchanges on it as the Bill was passing in Scotland.

“There may be impacts across the UK that we need to be aware of and understand the impact of them, and that’s what we’re doing, and once the government has received final advice it will set out next steps.”

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