Freeports set to go ahead in Scotland – raising the prospect of imminent announcement for Wales

A deal between the UK and Scottish Governments enabling the creation of two freeports in Scotland is expected to be announced this week.

The imminent announcement raises the prospect of a freeport coming to Wales, after Levelling Up minister Michael Gove said this week that he was engaged in “fruitful negotiations” with the Welsh Government.

The creation of freeports in Wales and Scotland has been mired in disagreement, with both devolved governments pushing back against the UK Government’s demands.

The deal in Scotland will now be predominantly funded by the UK government, sources told the Times. The UK Government has doubled its anticipated investment from £25 million to £50 million to cover the freeport start-up costs.

Who would pay for the freeport had also been a sticking point in negotiations with the Welsh Government. Ministers had said that they were “clear” that the Welsh Government could not accept a proposal where a Welsh freeport would receive less financial support than the £25m made available for Freeports in England.

Welsh Secretary Simon Hart had last year said that Wales would have to accept a freeport “come what may”, but Wales’ Economy Minister Vaughan Gething had warned them not to “impose” the port on Wales.

Speaking in the House of Commons on Monday, Ynys Mon MP Virginia Crosbie asked levelling-up Minister Michael Gove about the possibility of creating a freeport in Wales.

“I can confirm that we have had very fruitful negotiations not just with the Scottish Government, but with the Welsh Government,” Michael Gove answered.

“I want to place on record my thanks to Vaughan Gething and other Ministers in the Welsh Government, and I hope that we will be able to make an announcement shortly about the process by which we will allocate freeports in Wales.

“At the moment the proposal is for one freeport in Wales, but I recognise that both south Wales and north Wales have significant potential for freeports in the future, and there are few better advocates, in particular for Anglesey, than my great honourable Friend.”

‘Urgency’

Prime Minister Boris Johnson had also confirmed last week that a tax free port was still in the worst in Wales.

Boris Johnson replied that “my right honourable Friend the Secretary of State for Levelling Up, Housing and Communities [Michael Gove] is indeed talking to his counterparts in the Welsh Government about establishing a freeport in Wales.

“I urge our friends in the Welsh Government to agree to those plans as a matter of urgency.”

The development comes despite the Telegraph reporting last year that the idea of setting up freeports in Wales and Scotland may have been “killed” by Treasury civil servants.

According to the paper, the Treasury privately feared that freeports would simply result in less tax revenue and “displace” existing investment from elsewhere.

First Minister Mark Drakeford had also previously voiced his reservations, saying that “anybody sensible” would be “worried about displacement in freeports”.

But he added in March of last year that those issues were “resolvable” but that the “ball at the moment is in the court of the UK government”.

‘Separatists’

Virginia Crosbie has previously also quizzed Leader of the House Jacob Rees-Mogg as to how the freeport plan was progressing.

He replied by blasting the “socialist and separatists” running the Welsh Government, saying that they are standing in the way of the UK Government creating a tax-free port in Wales.

“I do not know whether you have heard the news that the socialists have gone into partnership with the separatists in Wales, so we now have to wonder whether the socialists are any longer a Unionist party,” Rees-Mogg, the Leader of the House of Commons, replied.

However, he said that “Her Majesty’s Government are committed to establishing the freeports programme in Wales as soon as possible”.

“Freeports are a really important way of levelling up, he said. “They are national hubs for trade, innovation and commerce, regenerating communities across the UK, attracting new businesses, and spreading jobs, investment and opportunity to towns and cities across the whole of the United Kingdom.”