Socialist Worker

Tories’ freeports are bad news for workers

Sarah Bates looks at how the Tory promise of new deregulated ‘freeports’ will benefit big business, not workers

Issue No. 2695

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Normal taxes are slashed in freeports (Pic: John Haslam/Flickr)


How do you “unleash the potential” of areas such as Teesside, Essex, Newcastle and Pembrokeshire?

For new chancellor Rishi Sunak and odious prime minister Boris Johnson, part of the answer lies in creating up to ten new “freeports”.

These freeports are little more than another opportunity to give the bosses a break, and a chance to push ordinary people into taking low-wage, insecure jobs.

Freeports, or free zones, would be located on British land—but would be exempt from normal customs tax.

For instance, the free zone operating in the Canary Islands has a corporate tax rate of 4 percent compared to 25 percent in the rest of Spain.

Creating freeports was one of the pledges prime minister Boris Johnson made during his Conservative leadership bid.

Donation

He received a £25,000 donation for his leadership campaign from the Bristol Port Company—the owners of one of the six proposed sites for development.

In a consultation on the question, the Tories boast freeports will “boost global trade, attract inward investment and increase employment opportunities”.

It’s not a new idea. In November 2016 Sunak published a report in the Centre for Policy Studies. It claimed freeports could create more than 86,000 jobs.

Part of the attraction of these freeports is they will allow companies to evade normal taxes and would relax health and safety and planning regulation.

This would threaten the rights of workers working at freeports.

And bosses even come close to admitting this.

Tim Morris, the chief executive of bosses’ organisation UK Major Ports Group, “We’ve always been clear, that for freeports to be sustainable and successful in Britain they need to be more than simply about tariffs”.

And Peter Holmes from the University of Sussex said the government’s plans extended beyond just giving the bosses a tax break—it wanted to create a “regulatory sandbox.”

Holmes said, “Are they going to completely relax planning regulations? They say that they’re not going to undercut labour protection—but if you really wanted to get a big benefit from this, you would abolish the minimum wage in the freeports.

“You’d just massively deregulate health and safety.”

Industry

Freeports are particularly useful for manufacturing industry.

The government has suggested the new freeports could follow a model similar to the tax-free zone near the Nissan car plant in Sunderland.

These are particularly useful for bosses, because it’s cheaper to import components for workers to manufacture in the free zone and export into the domestic market as a finished product.

In these huge complexes, thousands of workers suffer for poverty pay in dangerous conditions.

It’s claimed these free market enclaves will produce employment—but they are just as likely to just replace old jobs with new, worse ones.

And it’s not the only problem—a report from the European Parliament in 2019 said a freeport in Luxembourg had become a hotspot for tax evasion and money laundering.

So under the guise of “economic regeneration” freeports are another way for firms to maximise profits and prop up their exploitation.

And all the while they will undermine the lives and jobs of ordinary people.


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