Communities are being sold a lie about the benefits of green freeports, according to campaigners.
In January 2023 the Forth Green Freeport was approved to become one of two freeports in Scotland. It will allow new developments to operate without being subject to trade tariffs and a range of taxes.
Freeports are areas which aim to create economic activity such as jobs, trade and investment near ports. Goods imported into freeports are exempt from paying tariffs, which otherwise go to the UK government.
The Scottish model of “green freeports” aims to uphold the highest environmental protections and create new green jobs, according to the Scottish Government.
The area of the freeport will span 28 miles from Falkirk to Edinburgh and Fife, with Rosyth set to become one of four designated customs sites. This will mean that goods can be imported into Rosyth Dockyard and then exported again without tariffs being paid.
Criminal activity in existing freeports
Scottish Greens campaigns officer Mags Hall says: “There’s been significant evidence to show that freeports attract illegal activity.”
In 2020 the EU introduced new rules to clamp down on crime in freeports due to the high incidence of corruption, tax evasion, and criminal activity such as drug smuggling. It was identified that the special tariff and duty status in freeports has benefited organised crime.
MP for Dunfermline Douglas Chapman acknowledges: “It’s obviously been an issue with other freeports as well, it just seems to in some respects attract that type of activity.”
Head of Policy and Research at Scottish think tank Common Weal Craig Dalzell is concerned about security checks at the custom sites. He says: “The companies themselves are the ones who are tasked with policing the border at that point.
“I don’t like anyone policing themselves. What happens if something goes onto a truck and comes off it again mid journey is of additional concern.”
The Secretary of State for Scotland Alister Jack disagrees. He said: “Freeport areas are subject to the same legislation and regulations as the rest of the country. All the freeports in the UK uphold our high standards on security.”
Tax breaks
Incentives will mean that businesses operating within the freeport structure will receive relief on taxes such as non-domestic rates and employers’ national insurance. However, employees will still have to pay national insurance contributions.
Miss Hall claims: “The people who lose out are us, as the general population and people who are paying our taxes.
“As regular citizens, we expect companies and corporations to contribute as well. The loss of taxation from businesses leads to less money to spend on public services.”
Mr Chapman is more hopeful, saying: “It needs to be predicated on growth in other areas, so you’re actually offsetting and giving the incentive for somebody to come here.” Defence company Babcock recently announced that they will create 1000 new jobs in Rosyth over the next four years, including 400 apprenticeships.
Mr Jack says: “These initiatives will generate billions of pounds worth of investment and create many thousands of jobs.”
However, Miss Hall disputes this: “The idea that this is going to create huge amounts of jobs for Fife in particular is not evidenced. Freeports don’t attract new jobs, they just move jobs around from one location to another.”
She points to a study conducted by the University of Sussex which found that in five zones created under thatcher, up to 41% of the 58,000 jobs created were relocated from elsewhere in the UK.
One way in which the Scottish Government wants to ensure that freeports benefit employees is by encouraging companies to pay the real living wage, which is calculated by the cost of living.
This is separate from the national minimum wage and the national living wage, which are both set by the UK government.
All Forth Green Freeport partners pay the real living wage, which the official website states: “Will be a central condition in our green freeport investment decision principles guiding new investment.”
Miss Hall says: “If partners of the port are currently living wage employers, great. But they can turn around and change that. My concern is that, particularly the private companies involved in these bids are paying lip service to this and they may not actually follow through on it.”
But Mr Jack has previously stated that forcing employers to pay the Real Living Wage would be “uncompetitive.”
Employees reaction
One employee at Rosyth Dockyard agreed to talk about the freeport but wished to remain anonymous.
They said: “I think it’ll be a brilliant thing for this area. A lot of the jobs round here for people my age are warehouse jobs, with a lot of zero-hour contracts. Jobs in the dockyard can be a proper career.
“The area itself is a low-income area, so if you’re going to bring jobs here you’ve made people’s lives better. I don’t understand how people can see it as a bad thing.
“There’s plenty of criminal activity in places like Dover where there isn’t a freeport.”
On the issue of jobs simply moving from other areas to the freeport, the unnamed worker said: “It’s limited logistically by how many ships they can have in at one time. Thousands of ships hit the UK shore every year, they’re not going to get every one through every freeport because it’s cheaper.”
