The Press and Journal (Inverness, Highlands, and Islands)
Warning freeport may not deliver jobs boom
Long-serving Liverpool councillor Richard Kemp remembers the promises of jobs and investment the first time “freeports” were set up by Margaret Thatcher in his city.
More than 10 years after the special tax zones were scrapped by David Cameron, the policy has been revamped and rebranded, with two coming to Scotland at Cromarty and along the Firth of Forth.
Drawing on past mistakes, Mr Kemp warns:
Freeports didn’t create new 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.
It revives an idea first put into practice under Mrs Thatcher’s government from 1984 when seven sites were designated as freeports in England.
Mr Kemp, a former regeneration adviser, does not believe they will work, arguing the city’s past experience with the special tax zones failed to deliver.
He was a councillor from 1975 until 1984, and from 1992 until the present day.
Mr Kemp said: “Most of the people that moved into both the freeports and enterprise zones, the companies moved locally. The job increase was minimal.
“There was a general agreement they were tired and hadn’t worked.”
The UK Government says tax incentives have been designed to encourage new investment to create businesses and economic activity, not displacement.
Supporters of the scheme 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 that were “little different from what was available elsewhere in the country via other schemes”.
The IFS says the new freeports are “more substantive” and will include a range of tax reliefs, enhanced support for trade promotion, innovation and seed capital.
Cromarty Firth will be one of the two sites to gain special freeport status.
There are plans to make the area a global hub for green energy, maximising on the opportunity offered by offshore wind.
With the Forth freeport, both sites are expected to deliver 75,000 jobs.
A UK Government spokeswoman said: “We have developed an ambitious new freeport model that has a simplified customs process, tax measures to incentivise private business investment, locally led planning facilitations, and targeted funding for infrastructure s.
“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 said the larger freeport areas mean there is “possibly less likelihood of people moving half a mile to take advantage of something”.
But he also sympathised with the Scottish Greens, agreeing freeports “go for minimum wage jobs” and it is “very difficult to enforce employment standards”.
Malcolm MacLeod, Highland Council’s nominated director on the green freeport board for Cromarty, described the scheme as a “new generation of green freeports” and workers’ rights were a “fundamental” element.
A Scottish Government spokesman said green freeports will create “highquality, well-paid new jobs”, promote growth and regeneration, and help Scotland achieve its netzero ambitions.