Freeports have a better chance than Thatcher’s model scrapped in 2012

Long-serving Liverpool councillor Richard Kemp remembers the promises of jobs and investment the first time “freeports” were set up by Margaret Thatcher.

Now, more than 10 years after the special tax zones were scrapped by David Cameron, the policy has been revamped, with two in Scotland, at Cromarty and the Firth of Forth.

Discussions about the failures of the past freeports appear to have been drowned out by promises about the new plans, announced by Boris Johnson.

Drawing on past mistakes, Mr Kemp warns:

Freeports did not create jobs, they just moved them around.

The new plans are “better” but could still fall short of jobs promises.

Greens might be right about workers’ rights being “eroded”.

The revised strategy is a key plank of the UK Government’s so-called levelling up agenda, and is being delivered jointly with the Scottish Government.

In 1984 seven sites were designated as freeports in England but were retired by Mr Cameron in 2012.

Mr Kemp, a former regeneration adviser, still does not believe freeports will work.

He was a councillor from 1975 until 1984, and from 1992 until the present day.

With the benefit of hindsight, he says: “There’s nothing new about a freeport. They didn’t create new jobs, they moved jobs around. Most of the people that moved into both the freeports and enterprise zones moved locally. The job increase was minimal.

“There was a general agreement they hadn’t worked.”

Now, the UK Government says tax incentives have been designed to encourage new investment, to create businesses and economic activity, not displacement.

Freeports aim to create economic activity, including trade, investment and jobs near ports or airports. Supporters argue their effectiveness was previously limited by EU state aid rules.

A report by the Institute for Fiscal Studies (IFS) argued pre-2012 freeports were “limited affairs”.

These focused on customs measures like duty and VAT suspension “little different from what was available elsewhere in the country”. The IFS says the new freeports are “more substantive” and will include a range of tax reliefs, enhanced support for trade promotion and innovation and seed capital to help pay for infrastructure.

The sites are expected to deliver 75,000 jobs.

A UK Government spokeswoman said: “We have an ambitious new model with a simplified customs process, tax measures to incentivise private investment, locally led planning facilitations, and targeted funding for infrastructure.

“Freeports uphold the UK’S high standards on workers’ rights. They are subject to the same legislation and regulations to protect these as the rest of the country.”

Mr Kemp believes that while freeports will not ultimately be successful, there is a “better chance”.

He points to the larger size of the freeport areas which means there is “possibly less likelihood of people moving half a mile to take advantage of something”.

He also concedes the key players are involved “much more satisfactorily” this time round, including the public and private sector.

But he also sympathises with the views of the Scottish Greens, agreeing freeports “go for minimum

wage jobs” and that it is “very difficult to enforce employment standards”.

In January, the new Liverpool City Region Freeport officially opened for business with estimates it could create more than 14,000 highly skilled jobs and deliver £800 million of investment.

A spokesman for the Liverpool City Region described it as an “entirely new entity” unlike the pre2012 model.

He added: “There are strict rules, including clear monitoring and evaluation criteria in place to prevent displacement. The freeport incentives and benefits are only available to businesses who meet this criteria.”

Malcolm Macleod, Highland Council’s nominated director on the board for Cromarty, described the scheme as a “new generation of green freeports”. He said workers’ rights are a “fundamental” element.

Mr Macleod added: “The Inverness and Cromarty Firth areas are recognised as the key location in Scotland for the growth of offshore renewables and an area with potential benefits for regeneration, diversification of jobs and skills and the retention of young people in the area.”

A Scottish Government spokesman said green freeports will create “highquality, well-paid new jobs”, promote growth and regeneration, and help Scotland achieve its net zero ambitions.

He added: “By targeting specific sectors and types of business, we are confident that, in addition to delivering significant numbers of new, good, jobs, the freeports will be able to manage and mitigate the risk of job displacement from elsewhere – and we have asked them to set out how they will do so.

“We will monitor developments closely

There was a general agreement they hadn’t worked

FAILURE: Veteran Liverpool councillor Richard Kemp says ports did not deliver jobs.