There’s every reason to be sceptical about Boris Johnson’s highly touted plans for free ports

Trade experts say there’s little evidence to back claims they’ll create jobs and investment, writes James Moore

Is a tariff-free zone coming to your local port? (AFP/Getty)

Free ports? They’re a bold new way to boost trade and investment in the eyes of their Thatcherite supporters. A golden opportunity to turbocharge the “levelling up” of the deprived areas of Britain which gifted Boris Johnson his thumping majority, alongside extending high-speed rail to Leeds and Manchester.

HS2 looks likely to get the go-ahead this morning, despite the objections of a substantial number of Tory MPs, who’ve been vocally criticising the sky-high cost, not to mention the problems that will be created from the thing cutting through their constituencies. Did anyone say nimby?

But running a little ahead of that on the tracks was the launch of a free ports consultation.

Ten of them are planned and there’ll obviously be a bidding process, which will, of course, be all above board. Still, if you wanted to put some money on former Labour strongholds that elected Tory MPs putting in tip-top bids, well I wouldn’t put you off.

A bit of explanation is due here. These things don’t actually have to located in ports. The name is something of a misnomer. They’re designated zones in which no duty is paid on goods until they enter the UK market proper or move on to a different destination.

As such, free ports have to have a customs entry and exit point. Oh, and a fence.

You can, in theory, import raw materials duty-free and then make stuff within their confines. The promise is that this, and maybe other tax breaks, will create stacks of new jobs. Hooray!

If you’re sensing that there might be a “but” coming, give yourself a gold star.

David Henig, the former civil servant and founder of the UK Trade Policy Project, is among those who’ve raised buts. He tweeted that he awaits “with interest evidence that free ports in the UK will be economically beneficial, not having seen any to date”.

He also said he would be “interested to see whether trading partners including the EU will definitely include them in trade deals”.

In summary: don’t believe the hype.

But, but, but, they’ll cut through red tape.

Ah yes, that old Tory bugbear.

The government has created lots more of that with Brexit and the walls it will erect between us and our largest trading partner. It’s quite hard to see how free ports will come even close to cutting enough of the tape to overcome the damage done by Brexit.

Want some more inconvenient facts? The University of Sussex has some, having conducted a free port fact-checking exercise. It isn’t terribly flattering.

For example, the upside they’re supposed to offer disappears if the final destination for the goods put together in one of these places can prove they benefited from an unfair subsidy under the World Trade Association rules the Johnson government loves.

And the university says you’ll need tax breaks and/or subsidies to make them effective because the UK is already one of the least regulated economies in the world as it is.

It further points out that most of the new jobs these places are supposed to create are likely to be manual ones, as opposed to, for example, exciting well-paid tech roles. What’s more, it is highly questionable as to how many jobs will actually be new.

There’s a real risk that they simply relocate work from parts of the country that don’t have free ports.

The plan looks a bit like a small plaster for the gaping wound of Brexit, and not a very sticky one. But it does provide an opportunity for the government to make a lot of noise. Look, look, we’re busy. Here’s something we couldn’t do under EU rules!

Except that, despite what government minister Rishi Sunak told Sky News, the EU has these things.

I wrote about the Luxembourg one a few years ago, corresponding with Richtung 22, an arts collective that vehemently opposed it. The group intensely disliked the local free port because of the penchant rich folk had for using it to store their art treasures in a place where no one else could see them.

The collective hasn’t exactly warmed to the place in the years since I spoke to it.

“In Luxembourg the opening of the free port was praised by economists and politicians but they then soon dropped the subject as they noticed that it was seen as yet more proof that Luxembourg is still a shady tax haven,” was part of the response when I approached the collective about Britain’s plans.

The UK similarly becoming a shady tax haven under Johnson is a real concern (particularly in Europe).

Sunak denied that free ports would be catnip to people interested in tax avoidance, money laundering, the storage of illegal goods, even terrorist financing.

But these issues, and others, keep getting raised by critics, which include Labour’s John McDonnell and the former European justice commissioner, Vera Jourova, and they appear to have good reason to do so.