Earlier this year Rishi Sunak undertook a consultation on freeports. I submitted extensive evidence. So did others. I could not see an objective observer who could see any reason for freeports. But in October the government said it was going to push ahead.
Today the government has announced that bidding to run freeports is open.
I tweeted this in response:
Interesting. Is there any legislation to support this process as yet? If not, what are the bid criteria? https://t.co/tiywCYZskK
— Richard Murphy (@RichardJMurphy) November 16, 2020
How, I wonder, can you bid for something that has not been legislated for as yet? Isn't that ultra vires spending, and potential contracting, by the government? How can it do this?
I then added this:
When your invitation to bid says “freeports will adhere to the OECD Code of Conduct for Clean Free Trade Zones, and current obligations set out in the UK's Money Laundering Regulations 2017 will be maintained” you know this is all mightily dodgy - because these places usually are https://t.co/tiywCYZskK
— Richard Murphy (@RichardJMurphy) November 16, 2020
Could there be a more candid admission that these places attract criminality? I doubt it. But they're going ahead, coupled with 'light touch' regulation (call it 'turning a blind eye') nonetheless.
So we have a government acting without legislative back up to contract for arrangements so far not legal that are known to be hubs for illegal activity.
You really could not make it up.
PS And not a mask in sight
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This is all deeply unfair & you know it. Myself and associates (they do not wish to be known) plan to set up a marijuana processing & shipping business in one of the UK’s freeports. We will transport many tonnes of the plant from places in the USA (where it is legal) to the Netherlands (where it is legal). We have hired the reputable security company “Gruyere Security Inc, BVI” to handle all concerns with respect to any product leakage. Our agents in the Netherlands are likewise highly respected Chinese gentlemen belonging to a highly respectable business club called “Triad” (interesting tattoos btw). In keeping with our ethos of helping the community we also plan to make charitable donations to firstly a foundation for distressed businessmen called Riki-Tic Charities Ltd (Panama) and secondly to the “Herod Homes for First Children” (they seem to be located in a place called “Hell” — funny but I don’t seem to be able to quite place it on a map — however, Dante said he would give a hand). Those nie tories say that there are loads of other companies just like our hoping to set up in these ports.
Have a nice day y’all.
Free ports.
The name should not be allowed.
Sickening.
How low can we go? With the the ‘non-free’ sticking to the rules we have just put perhaps the final nail in the coffin of decently ran businesses.
I can see the piranha’s everywhere – our local and very good senior school is now the subject of an academisation move and you just know that somewhere some greedy so and so has their eye on the prize.
Gosh, innovation sounds good doesn’t it. But at a free port? I wonder if the government can provide is with examples of “innovation” taking place at other free ports around the world, that would not have taken place anyway without the free port being in place.
How about from the UK’s experience of operating free ports at Liverpool, Southampton, Tilbury, Sheerness and Prestwick until 2012. Were they all “national hubs for innovation”? Did they cease being centres of trade and commerce after 2012?
🙂
As Richard knows, a family friend with deep experience in this area also submitted evidence. Free trade areas are hot beds of illicit trading, piracy, tax avoidance, fake products, organised crime and the rest. They have been mostly phased out in Europe for just these reasons.
A less known fact is that Sunak has family connections back in India into just this kind of trading world. Highly questionable.
The govt on Freeports: “Seizing on the opportunities presented by leaving the EU, ports and their communities across England can now apply for Freeport status in a move that will transform historic sea, air and rail ports into national hubs for trade, innovation and commerce to regenerate communities in our industrial heartlands as the nation levels up and builds back better.”
https://www.gov.uk/government/news/freeports-bidding-process-opens-for-applications
Also the govt on Freeports: “Does the EU prevent the creation of freeports? No. The UK could create freeports as a member of the EU. Indeed, the UK has previously been home to several freeports, including Liverpool, Southampton, the Port of Tilbury and Glasgow Prestwick Airport. There was a total of seven freeports between 1984 and 2012, when the UK legislation that established their use was not renewed.”
https://www.instituteforgovernment.org.uk/explainers/trade-freeports-free-zones
Have you read the materials at https://bakerstreetherald.com/ ? Particularly https://bakerstreetherald.com/category/tabularasa/. It seems this is a part of a much bigger international libertarian project.
This makes sense of the fanaticism shown by the extreme Brexiteers. It’s illuminating, and it explains who the No Deal Brexit they’re insisting on will benefit. They all seem to be bonkers though so I don’t fancy their chances of pulling this off.
I’m hearing now the thinkiing may well be for car makers etc to set up factories/assembly plants within the freeports and, more realistically, the freezones. The idea would be that car parts etc could come here, be assembled into cars and exprted from here but legally they’d never have been in the UK so, I suppose, problems with rules of origin and other complexities could be avoided.
Does assembly in a freeport – and so formally outside the customs territory of the UK – side-step rules of origin? Or just obfuscate them? Is “it was assembled in a UK freeport from parts from the UK and elsewhere” any better than “it was assembled in the UK using parts from the UK and elsewhere”? I suspect “origin=nowhere” may in many cases be worse than “origin=UK”.
Setting aside the obvious the risks of criminality, the commercial risk is that you simply encourage business that would otherwise be established elsewhere in the UK to set up inside the freeport instead, because (a) the rules are lighter and (b) there are tax breaks. The existing reliefs for inward processing and temporary importation get you most of the way there, but subject to compliance requirements. But of course the freeport won’t have the compliance rules.
Any tariff benefits of freeports are likely to be marginal. The real meat of the proposal is subsidies – the kind of directed state aid that tips the playing field so would be illegal under EU law – yet another example of this Conservative government putting public money in the pockets of its business friends.
We simply do not know yet – there are bids, but no law
That’s the way we run this country these days
And I have read all the consultation docs
And discussed such issues with HMT who said pronouncements were vague ‘to keep options open’
Would the EU be likely to put up with such subsidies? It seems unlikely. Are there similar arrangements already in place elsewhere you can think of, Andrew, which have the EU’s even tacit approval?
The EU does permit freeports – but is moving heavily against them as they are seen as hotbeds of much abuse, some illicit