Freeports

Douglas Chapman Excerpts

Thursday 11th October 2018 Westminster Hall

[Douglas Chapman (Dunfermline and West Fife) (SNP)]

Thank you, Mr Hanson, and it is a pleasure to serve under your chairmanship. I warmly thank the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) for bringing the debate to the Chamber.

The hon. Member for North East Derbyshire (Lee Rowley) said early on that he was present to listen rather than to speak. Given some of the comments we have heard and will continue to hear about Brexit, clearly we need to start listening a lot more, because we need to learn new tricks if we want our economy to survive and to be a real success.

I do not want to detract from the cross-party consensus, but Brexit takes away the European Union customs union—or is likely to—which in effect is a huge economic free trade zone, with no costs from borders or additional taxation in each individual member state of the EU. In the absence of the customs union, therefore, we will have to invent or reinvent a freeport or free zone area in our own country to compensate.

Even so, many EU countries have freeport or free zone areas—22 countries have such arrangements, I think. In Spain, for example, elements of free trade zones are found on the Mediterranean coast in the ports of Barcelona and Cadiz; in the north, on the Atlantic coast, in Vigo; and in the airport area in Madrid, which was fairly landlocked last time I looked—though perhaps not as much as eastern Derbyshire. Closer to home, the Isle of Man has a free zone, as do other countries in the EU. From my perspective, the great bonus of freeports is the boost to economic activity in areas where trading conditions need a shot in the arm to increase jobs, economic vibrancy, trade and exports.

According to many reports, Brexit will have a more detrimental effect in Northern Ireland, north-east England, Wales and Scotland than elsewhere. In Scotland, according to a fairly recent report, we are looking at a 9% reduction in gross domestic product if we go into Brexit under World Trade Organisation rules. If there is a no-deal Brexit, the GDP of north-east England is expected to drop by some 16%, and 80,000 jobs in my country will be at risk. I hope that we do not get to that stage, but the warning signals are clearly there.

To have the most impact, free trade or freeport zones are best placed outside London and the south-east. If someone is determined—as I am sure the Minister is—to address economic inequality throughout the UK, we need to consider how to boost the economy in other parts of the UK—the parts that will be worst affected by Brexit. The British Ports Association has said that freeports would be most beneficial where a port has plenty of land so that value-adding economic activity can also take place.

All Members who have spoken in the debate have made a case for their own neck of the woods, and I am delighted to let everyone know a little about my constituency. Our local port, Rosyth, has all the ingredients necessary for the successful operation of a freeport: a lot of available land, much of it on brownfield sites; a rail link that is greatly underutilised but nevertheless only a mile from the main east coast line; and a motorway system that includes the new, iconic Queensferry crossing, providing a 15-minute corridor between the port of Rosyth and Edinburgh airport. We also have a talented workforce—the usual situation in Scotland, as I think every Member would accept—and the desire to become the beating heart of the Scottish economy, ready to take on opportunities wherever they may appear.

An opportunity that no one has yet mentioned is an unwanted feature of climate change: more and more sea routes are being created to the north and through the Arctic. Ships can now move along the northern coast of Norway, past Russia and to China, with a number of months in the year seeing more seaborne activity. In a northern port such as Rosyth, with easy access to those waters, we see that as a bonus.

We also have to take care. As the hon. Member for Redcar (Anna Turley) pointed out, freeports cannot be introduced to push along a low-wage economy or to act as a centre for illegal trade just because some of the rules have been softened or relaxed. They might also be disrespectful of the environment—even in a freeport, the “polluter pays” principle must still apply.

The British Ports Association briefing, which I think we all received, made for some encouraging reading: 95% of trade is carried by sea, whether imports or exports, container traffic or bulk goods; 60 million passenger journeys are made between the UK and the rest of Europe every year; and 500 million tonnes of freight pass through all ports in the UK, which employ almost 100,000 people. We have a really good ports sector on which to build, and that is a real feather in our cap, a real hand-up and a great start in developing our port facilities.

I am a member of the all-party group on freeports, under the chairmanship of the hon. Member for Cleethorpes (Martin Vickers), and I believe that we will be able to highlight some of the pros and cons of freeports. We are all determined to grow our economy, to create jobs and to deal with some of the vagaries of Brexit in the parts of the country that will be hardest hit. The hon. Gentleman mentioned the possibility of creating a super-freeport zone. If that included a specific focus on inward investment and a wider economic corridor, we could gain different benefits from a wide range of enterprises, and perhaps bring in an innovation hub linking universities and colleges in whichever area the freeport might sit.

I look forward to hearing the Minister’s views. An early announcement on freeports and how they will be financed will be very welcome.