Conclusions and recommendations
Arguments for and against introducing freeports to Wales
1.The current UK Government consultation on freeports, and the strong interest being shown by Welsh ports in pursuing freeport status, make this an important moment to recognise the positive role played by ports in terms of trade, inward investment and job creation in Wales. (Paragraph 42)
2.While there are competing arguments about the potential economic benefits of freeports, the major Welsh ports have responded positively to the consultation and have set out different proposals for how Freeport status could enhance their operations and boost their contribution to the Welsh and UK economy. (Paragraph 43)
3.Freeports could play an important role in stimulating economic development and regeneration and potentially offer much-needed opportunities for supply chains and manufacturing in Wales following the UK’s withdrawal from the European Union. (Paragraph 44)
4.Freeports are not, in themselves, a silver bullet for economic regeneration and development. Freeports need to fit alongside other policy measures to boost productivity and stimulate economic growth - particularly if the problems of economic displacement activity are to be avoided. (Paragraph 45)
5.The nature of ports means that the economic gains that accrue from their activities are often felt nationally while port communities themselves remain among the poorest parts of the country. If freeports are to make a lasting contribution to ‘levelling up’ the poorest regions and nations, freeport bids should be assessed for the additional economic and social gains envisaged for the communities nearby. (Paragraph 46)
6.The UK Government should set out in greater detail its assessments of the economic potential of freeports and how it intends to use freeports as one tool among a broader set of policies to promote economic and regional development and to ‘level up’ the regions and nations of the UK. The Government should also detail the lessons it has learnt from the experience of enterprise zones, and from the previous incarnation of freeports from 1984 until 2012. (Paragraph 47)
Freeport locations in Wales
7.Given that Ports policy in Wales is generally devolved to the Welsh Government, and so are the policy areas that support Ports activity such as road, rail and land use planning, implementing freeports successfully in Wales will require close cooperation with the Welsh Government. (Paragraph 61)
8.The UK Government must not allow the complexities created by the devolution settlement to disadvantage the bids submitted by Welsh ports. For its part, the Welsh Government should recognise the potential opportunities provided by the freeports concept and work constructively with the Welsh ports to deliver outstanding bids to the UK Government. (Paragraph 62)
9.The UK Government must neither artificially cap the number of potential freeports in Wales, nor create a ‘Welsh freeport’ purely for optical or political purposes. All bids should be assessed on their merits even if that results in no freeports, or several, being awarded to Wales. (Paragraph 63)
Issues for consideration going forward
10.There needs to be greater clarity about how the bidding process for freeport status will work, including whether consortium bids are to be encouraged and what role public sector bodies could or should play in the process. There also needs to be clarity about the governance structures that will be required for freeports, and where public bodies will fit into these structures. (Paragraph 69)
11.If the UK Government chooses to proceed with freeports after the consultation process then it should, as a priority, publish details on the bidding process that it intends to adopt. The UK Government should consider using the bidding process to encourage bids by consortiums (including multiple terminals) and should explain what role bodies such as city regions or enterprise zones could expect to play. The bidding process should also provide clarity about the governance structures that would be expected for freeports and could, for example, include an illustrative example of such a structure. (Paragraph 70)
12.The establishment of freeports is likely to have implications for port infrastructure and for customs, and planning, processes. Ahead of any bidding process, it is important that clarity is provided as to the customs processes that will be required at freeports, as well as the infrastructure implications. The UK Government should also work with the devolved administrations, local government and key stakeholders in the freight, ports and airports sector to discuss what changes would be required to planning processes to accommodate the establishment of freeports. (Paragraph 74)
13.Freeports could offer benefits to the Welsh, and broader UK, economy, but it is clear that they are not an economic panacea. If implemented effectively they could form one of a broader number of measures to ‘level up’ the UK economy. (Paragraph 75)
14.If the UK Government is committed to establishing freeports across the UK then there remain questions that need to be answered. These questions include:
- How will the UK Government work with the Welsh Government and other devolved administrations in ensuring that freeports can be successfully established and integrated in the local, as well as national, economy?
- What role should consortiums and public sector bodies play in the bidding process and delivery of freeports?
- What additional hard and technological infrastructure will be required as a result of freeports?
- What additional customs arrangements will need to be in place at freeports?
- How will the UK Government ensure that any jobs or economic growth generated by freeports is new and not the result of economic displacement from other locations in the UK?
- Are there other policies that could be pursued which would deliver more meaningful economic development for regions across the UK? (Paragraph 76)
Published: 8 May 2020