Wales’ first freeport to open next year after Welsh and UK governments come to deal

The Welsh and UK Governments are today inviting applications for Wales’ first freeport, which should be up and running by summer 2023.

Welsh Ministers said they had agreed to support freeport policies in Wales following the UK Government’s agreement that it would meet the Welsh Government’s demands that both governments would act as a “partnership of equals” to establish freeports in Wales.

In addition, UK Ministers also agreed to provide up to £26 million of non-repayable starter funding for any freeport established in Wales – the same as with the deals offered to each of the English and Scottish freeports.

Initially Wales was being offered just £8m to set up a Freeport. Wales’ former Welsh Secretary, Simon Hart, had also threatened to impose a Freeport on Wales without an agreement from the Welsh Government.

A Welsh freeport will be a special lower-tax zone with the benefits of simplified customs procedures, relief on customs duties, tax benefits, and development flexibility.

Wales’ Economy Minister, Vaughan Gething, said: “As an intrinsic part of our rich industrial history and the engine room of our economy, ports have huge potential to accelerate future industries which support net zero – from off-shore energy to advanced manufacturing.

“Thanks to the agreement we have reached with the UK government, we are launching a Freeports Programme in Wales which offers an opportunity to harness Wales’ abundant economic potential domestically and internationally by reimagining the role of ports, whilst promoting fair work and sustainability.

“The Welsh Government believes a better deal for workers is essential to a fairer and more equal Wales. So, I am looking for bids that break the industry ceiling on net zero standards, exemplify the high labour standards that promote fair work, and articulate a shared vision formed by long-lasting partnerships which genuinely involve all social partners.

“I look forward to considering innovative bids which deliver meaningful economic and social benefits for Wales.”

Trade unions

The Welsh Government said they had worked with the UK Government to design a freeport model which will deliver on three main objectives which must be met by applicants:

• Promote regeneration and high-quality job creation.
• Establish the Freeport as a national hub for global trade and investment across the economy.
• Foster an innovative environment.
• The Welsh Government has a clear Economic Mission to transform the Welsh economy to be more prosperous, equal and green than ever before.

They said that they had “successfully argued” that a Welsh freeport will need to operate in a manner that aligns with the Welsh Government’s policies on fair work and social partnership.

“This includes workers being fairly rewarded, heard and represented, and can progress in a secure, healthy, and inclusive working environment, where their rights are respected,” they said.

As a result, the Freeports Programme in Wales includes made-in-Wales policies, such as:

• The inclusion of the Welsh Government’s Economic Contract.
• Trade union involvement in freeport governance structures.
• An emphasis on the real living wage and lifting the wage floor.
• Setting expectations around employers’ treatment of employer national insurance contributions.
• A Welsh freeport will need to operate within the Welsh legislative framework on sustainability and well-being – The Well-being of Future Generations (Wales) Act 2015 – and the Welsh Government’s net zero commitments.

Bids

As part of a “fair and open competitive process” to determine where the policy should be implemented in Wales, the Welsh Government and UK Government are today jointly publishing a prospectus which sets out the policy objectives both governments seek to achieve through the establishment of the Freeports Programme, and the parameters for how bids will be assessed.

The bidding process opens today (Thursday 1st September 2022). Applicants will have 12 weeks to complete and submit their bids. Bids must be summited by 6pm on Thursday 24th November 2022.

The successful bid will be announced in early spring 2023, with the freeport being established by summer 2023.

Both governments will work together to co-design the process for site selection and will have an equal say in all implementation decisions, including the final decision on site selection.

Both governments remain open to the possibility of a multi-site freeport in Wales, and to the possibility of allowing more than one freeport in Wales, should they be presented with a sufficiently compelling business case.

The UK Government’s Secretary of State for Levelling Up, Greg Clark, said: “A new Freeport will provide a huge boost to people in Wales, and I am delighted to open bidding as we continue our work with the Welsh Government to bring jobs and prosperity to the country.

“The UK Government’s Freeports programme is already delivering benefits to businesses and communities across England, with operations in Teesside and Liverpool already underway.

“I look forward to seeing similar benefits for Wales as we deliver a ground-breaking new Freeport and level up the whole of the United Kingdom.”

‘Thrilled’

Today’s news has been welcomed by the Ynys Môn MP Virginia Crosbie  who said today that she was “delighted” that the UK Government and the Welsh Government had launched the freeport bidding prospectus.

Anglesey’s bid will be headed up by Stena Line Ports.

Mrs Crosbie has campaigned for several years for Anglesey to be home to a freeport, she told the local democracy reporter service.

“I am delighted and thrilled we are now able to put forward a brilliant case for Anglesey to be a freeport and all that means for jobs and investment for our island if we are successful,” she said.

“For too long Ynys Môn has been neglected and now we have a chance to change this. This bid will be about levelling up, regeneration, decarbonisation, attracting investment in green technology and other industries and securing us as the Energy Isle for decades to come.

“The generous customs and tax incentives to attract businesses and seed funding to develop key infrastructure are huge game changers for us here on Anglesey, if we can get them.

“I am very pleased this transparent, fully competitive bidding process will be overseen by officials from the UK and Welsh governments with both having an equal say on the final selection.

“I am already planning my next moves to ensure Anglesey is chosen. I will be banging on quite a few doors and making quite a few phone calls as I do everything I can to support the bid and make sure we are successful.

“There’s a way to go and there can be no guarantees but I know Stena and others who want this freeport here on our island will do the best they can.”