There’s nothing free about freeports

On the back of the UK Government ramping up plans to create freeports across the UK, Green Party member Andrew Bell highlights the risks posed to business, society and the planet if this happens.

Exeter airport
Andrew Bell

The government is ramping up its spin on plans for freeports around the UK, with Rishi Sunak boasting they will be ‘national hubs for trade, innovation and commerce, regenerating communities across the UK and supporting jobs.’ The chancellor has long been an advocate of freeports, which are at best controversial, at worst little more than deregulated tax havens. 

Freeports are described as areas geographically inside a country but legally outside it for customs purposes. This means that goods can enter and re-exit the freeport zone without incurring tariffs or undergoing import procedures. Typically, such zones enjoy lower taxes, tariffs and duties than the rest of the domestic economy.    

The Tories have heralded freeports as an opportunity to turbocharge the economy post Brexit. They have also falsely claimed that the EU is the only place where freeports don’t exist. In fact, there are around 80 such free zones within the EU. However, a recent European Parliament report concluded that they encourage corruption, tax evasion and criminal activity and so are likely to become more regulated.  

The UK therefore sees leaving the EU not so much as a new opportunity to create freeports, but to fashion them in a way that places the country at a competitive advantage against the EU. 

The calamitous hit our businesses and economy are expected to take at the end of the transition period – with or without a deal – means the UK Government is frantically trying to find ways of deregulating, undercutting and lowering standards and cutting taxes to give UK businesses the competitive edge. 

And ports don’t just mean seaports. Regional and city airports are key advocates of turning the UK’s regional airports into freeports. For example, in the South West a consortium of key public and private partners responded to a government consultation arguing that Exeter Airport was well-placed to become a regional freeport. The response boasted about how aviation activity at the airport grew by a staggering 150 per cent between 2005 and 2015. This consortium includes Labour-run Exeter City Council, which appears also to have fallen for Tory hype on freeports.  

Notably absent in this response headed up by regional and city airports is a single mention of climate change or how a freeport, which is set up with the intention of increasing business activity and boosting the movement of goods, will impact on carbon emissions. On the contrary, the consortium in the South West suggests a freeport is an opportunity to ‘streamline existing environmental and regulatory frameworks’. 

In other words, Brexit is being seen as an opportunity to weaken standards compared to the EU – and the UK’s current standards – and embark on a race to the bottom. And clearly the climate emergency is not considered urgent enough to stand in the way of business as usual. 

Or rather, business as unusual. Because that is precisely the point of freeports. Freeports would suck businesses and jobs out of other areas, creating competitive advantages to those that set up there. Indeed, evidence from around the world suggests that in the main it is existing businesses that relocate into freeport areas, encouraged by regulatory relaxations and tax relief. 

Few in society, aside from the wealthy, are likely to benefit from freeports. Especially since the relaxation of rules often applies to employee, product and environmental standards. Also, given the climate emergency, grand plans for economic development move us in exactly the wrong direction, threatening to undermine rather than benefit our future prosperity. 

But we will all pick up the costs, through low pay, less tax revenue, and greater inequality. And sprawling businesses within the zone – especially those based around regional airports – could eat up yet more countryside and rich farmland and dramatically increase a region’s carbon footprint, just at a time when so many local authorities are declaring a climate emergency. 

There’s nothing free about freeports. They come at great cost to local communities, their environment and the climate. 

Andrew Bell is a member of the Green Party in Exeter