Chamber and committees

I have plenty of other questions, convener, but it is probably time for other members to get a word in.

You mentioned that you have been speaking to the Treasury about that. We can ask ministers about this when they come to give evidence, but are you aware of whether the Scottish Government has engaged with the Treasury on those points?

You have given us plenty to ask the minister when he comes to speak to the instrument.

Thanks very much.

I get why you say that, but given the evidence that we have from the last time that the UK tried freeports, the massive displacement that happened then and, indeed, the gap that we already have between the east and the west, it is reasonable to see this as a risk that, at the very least, needs to be mitigated.

I am interested in the part of your written submission where you talk up the fact that investments in the freeport zones

“will meet strict environmental and social ... criteria”,

which will mean not just economic benefits but wider social and environmental benefits. However, going back to what Liz Cairns touched on a moment or so ago, I understand that, although the tax incentives are very clear and have been laid out in the statutory instrument, a lot of the environmental and social criteria ultimately depend on voluntary agreements. Is there not a significant risk that organisations that invest might fulfil those environmental and social criteria for the first few years and then not do so over the long term? After all, there is no way of guaranteeing they will do so, because there is no clear enforcement mechanism in the instrument to ensure that the criteria are met in the long term.

I have a final question for Derek Thomson and Liz Cairns. Going back to a question that the convener asked, I note that your submission mentions

“a deliberate lack of clarity”

particularly on union access to workers in the freeport zones. I think that the word “deliberate” is really charged, so can you say a little bit more about why you think this is deliberate rather than just an oversight or something that neither Government is prioritising? Do you think that there is a deliberate attempt to leave the fair work stuff pretty vague while pressing ahead with the tax breaks, and, if so, what makes you think that?

For clarification, you mentioned that there is not enough self-assessment data for Scotland. Is that unique to Scottish self-assessment data, or is it a UK-wide issue but one that matters more to us because of scale and the way that our public finances work?

Surely those other forms of investment will, inevitably, be drawn to the east and the north now. I accept that you are saying that there are strengths to greater Glasgow’s economy—of course there are—but the depopulation and relative growth in income and earnings show that there has been a clear shift from the west to the east. Do the freeports not just exacerbate that to the disadvantage of your members in the west?

On a somewhat similar point, about the challenges of the short period in which we are doing this, I am going to ask the same question that I ask every year at this point about the work that you do to look back at behaviour change estimations that are related specifically to changes to income tax. We started making significant variations to the UK from 2018. Given that we are now getting somewhat further away from that point, and recognising that it is hard to disaggregate that from all the other changes that might result in a change in the revenue that is eventually raised, do you have any further observations about whether your estimations on behaviour change related to income tax rises have borne out?

I go back to the convener’s original line of questioning about displacement and the request for evidence. The theory behind freeports has been tested in the UK. In the 1980s, freeports were one of Thatcher’s signature economic policies, and studies have been done on displacement as a result of freeports. I think that the study that I am looking at just now is regarded as the major study in this area but I could be wrong about that; I have certainly seen higher figures. Larkin and Wilcox’s 2011 study said that there was 41 per cent displacement—that is, 41 per cent of the jobs in the UK’s freeports of the 1980s were not new jobs but were displaced from elsewhere.

David Melhuish, you acknowledged that there will not be 100 per cent new jobs at the freeports and that there will be some level of displacement. Would 41 per cent displacement be unliveable? Would that be satisfactory, or would it be too high a rate of displacement if we saw that happen again this time round?