Freeports – Who Benefits is our latest look at the UK Government’s planned policy to develop Freeports around UK, including two in Scotland.
We first looked at Freeports, and the Scottish Green Freeport proposals in an earlier podcast Freeports – A Pirate’s Dream Come True?
Since then, we have been following developments with interest and we are delighted to have had the chance to chat to Peter Henderson whose career was as a customs officer and who is an acknowledged expert in the field of Customs Law Enforcement .
In this episode, Peter explains the thinking behind those tests and shares some of his vast store of experience from his 40 years in the field. Some of the things we talk about:
- a Freeport needn’t a port. It’s just a location It’s just a location that a government declares to be outside the scope of normal regulation.
- they are in effect tariff-free zones
- other tax laws are also waived, to the benefit of employers in that location
- local taxes ae also waived so no benefit to local communities
- health & safety regulations are often relaxed.
You can watch the video version of this podcast by clicking on the image 👇
Six Requirements for Scottish Freeports
Peter developed the thinking behind the “Six Requirements” or tests on the introduction of freeports in Scotland. In 2021 the SNP Conference overwhelmingly adopted this requirements as a safeguard against the economic and social risks of Freeports. You can see him proposing the motion in our blog post. Disappointingly SNP Government has not since followed through on applying those requirements in practice.
Are Freeports a Threat to Democracy?
And for anyone interested in learning more about UK Government’s plans to push ahead with freeports, we recommend reading the set of articles from ByLine Times. Helpfully the Byline folk have gathered them into a digital pullout called Freeports Gazette. We learned loads by reading through those articles. Interesting to learn the Welsh Government’s approach to the two proposed Freeports in Wales. Just to whet your appetite here is an extract from one article by Richard Murphy:
First of all, a freeport need not be a port. It needn’t be an airport either. It’s just a location – from a single warehouse to a whole geographic region – that a government declares to be outside the scope of normal regulation.
Second, the range of regulation that is subject to exemption varies, but there are usually some commonalities. Import and export regulations are usually relaxed in freeports. This means that they are, in effect, tariff- free zones. It’s a bit like they’re still in the EU.
Very often some other tax laws are also waived. The most common relate to employment taxes. All the benefit of this goes to the employer. It is they who get the subsidy. And the country as a whole does, of course, lose out on tax revenue as a result.
There are also local taxes that are usually waived e.g. business rates. That means that unless the council in which the freeport is located is compensated for this loss of revenue – which is another subsidy to business – then the local community loses out or has to pay more tax.
In addition to the tax exemptions, reduced health and safety standards are often permitted in freeports. …. Environmental standards can also be waived in freeports. So too might other standards e.g. on money laundering and other measures intended to prevent crime.
