I was asked yesterday if I might be available to discuss freeports on the media and what my ‘top lines' would be if I did. These were what I suggested was wrong with them:
1) Freeports are bound to reduce the protection for workers. Light touch regulation always does in the end. Employers NIC is already going. Maybe it will be pensions next, and then what as desperate measures are taken to make this policy work.
2) Freeports increase the risk of criminals using the port, whether for drug or human trafficking, counterfeit goods or other illicit activity.
3) Having a border around the port will increase paperwork and costs for those using the port. Just look at Northern Ireland.
4) Regulation in freeports is going to be outsourced to the freeport operator. Really? Is that wise? Surely this creates the most massive conflicts of interest? Won't they turn a blind eye to deliver their own economic success?
5) Unless anyone knows what jobs are going to be created in a Freeport, why do it? What jobs are going to be created in each freeport rather than be shifted into them?
6) Freeport jobs are usually 'shed jobs' that usually attract fewer women. Is that the basis in which we wish to build economic development?
7) Freeports in the UK were abandoned in 2012 by David Cameron because they did not work. Why repeat the mistake now?
8) Jobs could simply be moved into the port with no real gain at all, and real losses in local areas that force employees to travel further to work.
9) It is still not clear how local authorities gain - and they may lose out from business rates cuts in freeports.
10) These are tax havens at the end of the day. The government will get less money - and when this government says that it needs to raise more tax that means someone else will pay. Why should we all subsidise those who want to free ride us by using a freeport?
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Add 11 – encourage corruption in the body politic.
True
In addition, the Government intends to promote “economic freedom” for companies within these free ports, but when it comes to political freedom that comes a very poor second: if the SNP demand a vote on independence after they are successful in the May elections I suspect the answer will be “ now is not the time:” Any attempt to declare UDI will be forcefully resisted.
If the employers don’t have to pay NI, does that mean he workers lose credits for their OAP, sick pay etc?
No, that comes from their personal payment
Freeports allow users to opt out of the society they operate in. It absolves them from tax and allows them to cuckoos nest for their personal economic gain.
Thank you Richard – very useful.
You’re only half-right to say few new jobs will be created and many will be shifted in from the neighbourhood. There will be a big increase in work, jobs and fees going to advisory companies, etc, who will be planning, strategising, advising, lobbying on international comparisons, trade flows, tax and regulation. Freeports are meat-and-drink to global advisory firms; for them, local job effects are just one factor to list amongst many. This is never taken into account.