Aberdeen businesses were left bitterly disappointed in January when the city’s bid to set up a low-tax green freeport was unsuccessful.
Now the prospect of the north-east benefiting from a special economic area is back on the cards, this time in the form of an investment zone.
But just what exactly are they, and is Aberdeen likely to be in the running for one?
What are investment zones?
Similar to freeports, investment zones are special economic areas focused in a city or region which offer companies tax breaks in the hope of spurring on growth.
They were heavily promoted by Liz Truss during her brief tenure in power as a consolation prize for areas which failed to win a freeport.
In his Budget last month, Tory Chancellor Jeremy Hunt announced a scaled back version of the policy as he confirmed there will be 12 investment zones across the UK.
Scotland is guaranteed to get at least one of those, and may even benefit from a second if applicants can beat out competition from the other devolved nations.
Those in favour of investment zones claim they will help fuel job creation by encouraging more businesses to regions such as the north-east.
Firms operating in the special economic areas would be expected to work closely with local universities when it comes to research projects.
Each of the winning regions will be given £80 million to spend over a five-year period.
Is there interest in the north-east?
Aberdeen’s freeport failure was especially disappointing for businesses given the north-east is in the midst of shifting away from oil and gas.
Any investment which can help ease the region’s transition toward focusing on renewable energy will be welcomed by major companies.
The Port of Aberdeen was front and centre of the north-east’s efforts to obtain a freeport.
Bosses from the port are in favour of investment zones and revealed they have raised the matter with senior figures from both the Scottish and UK Governments.
Meanwhile, an Aberdeen University spokesperson told us: “The university has studied the relevant policy documentation with interest, noting the important role that universities are expected to play.
“The University of Aberdeen would be keen to participate in an investment zone in the North East of Scotland should the opportunity arise.”
Labour leader Sir Keir Starmer has also said launching a low-tax zone in the north-east would be a “good idea”.
When will investment zones be in place?
The UK Government is yet to set out a clear timescale for when any investment zones would start operating, meaning plenty of uncertainty remains.
Aberdeen council chiefs are still waiting for more information from both Holyrood and Westminster before they start pursuing a bid.
The Scottish Government is keen to work with Downing Street on investment zones, but said “further detail” is needed.
Holyrood also wants assurances the special economic zones will not encroach on areas where policy is devolved to Scotland.
Will Aberdeen face competition?
Given there’s a chance only one Scottish bid may be successful, the north-east could be at risk of missing out on another major economic opportunity.
Glasgow’s bid for a freeport was also unsuccessful in January, and council bosses in the city have expressed an interest in setting up an investment zone.
It has also been hinted Dundee could also be in the running as a possible area for investment too.
Dundee-based North East MSP Maurice Golden, who also represents Aberdeen, reckons the City of Discovery may be a better choice.
He said: “There’s a case that as Dundee has missed out on oil and gas, which provided a lot of prosperity to Aberdeen, an investment zone would provide prosperity to Dundee.
“Aberdeen does have a strong case, but there’s also a lot of private finance available in Aberdeen.
“Do we invest in an area that might struggle to attract that sort of private finance? I think that’s where Dundee sits.
“Aberdeen could produce a strong bid, but I think Dundee perhaps needs the government investment zone.”
Veteran Aberdeen Labour Councillor Barney Crockett believes learning from mistakes made during the freeport process could be key to a successful bid.
He told us: “We need a more informed discussion about what exactly went wrong with freeports.
“I don’t think we’ve seen a good enough insight into it. It’s been shrouded in a little bit of mystery. We need to look carefully at that.”
Is everyone in favour?
The Scottish Greens, who share power with the SNP, opposed freeports and warned they will lead to lower wages and erode workers’ rights.
When it comes to investment zones, they have the same concerns.
Aberdeen-based MSP Maggie Chapman said: “If they are low tax and low regulation areas, then they will drive down wages, conditions and standards.”
But as with freeports, the Greens have no government duties related to investment zones.
That means the SNP and Tories will be able to forge ahead with setting at least one up north of the border after they iron out the details.
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