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As I See It

Anti-Brexit obsession is costing us opportunities

Brian Monteith portraitNow that the EU Withdrawal Bill has been passed, politicians on all sides of the Brexit debate who have been making fools of themselves this past fortnight, have the opportunity to redeem themselves on the Trade Bill that sets out our future trading arrangements and throws up some opportunities that are being overlooked.

One area that offers great potential – but is yet to secure much attention in Scotland – is for the creation of freeports across the UK to take advantage of being outside the EU’s Customs Union.

The idea is very simple: a freeport lies inside a country’s border but is treated as being outside its customs jurisdiction for the purposes of taxation (rather like a whisky bond). 

The freeport idea is gaining popularity in the North of England, as it is recognised by politicians of all parties that it can rejuvenate their struggling local economies. The mayor of Teeside is one such supporter of freeports, recognising that having one there could help make up for the loss of the Redcar steelworks.

Raw commodities and parts can arrive at a freeport and be assembled and then re-exported without facing the tariffs and regulations that they would have if they were inside the customs area. The result is tens of thousands of jobs in the freeport from the handling of the imports and exports as well as the manufacturing and processing on site.  

Yet Scotland has been slow to take up the idea. Why is this? 

Despite the growing evidence in support of the idea there is no Scottish port listed and a possibility that the Scottish Government’s intransigence against working with the UK to achieve the best possible Brexit is costing Scotland this opportunity.

The problem the SNP faces is that to enter into discussions about having freeports in Scotland would mean an acknowledgement that Scotland, along with the rest of the UK, could have some benefits from being outside the EU customs union – which is contrary to its current position.

The idea is not new, as there are many freeports in the United States and elsewhere, but thanks to EU customs union and state aid laws it is almost impossible for an EU member country to establish them.

A 2016 study produced by Centre for Policy Studies estimated some 86,000 jobs could be created in the UK if British freeports attained the economic performance of those operating in the US. A new study by Mace consultancy and construction group estimates that seven freeports combined with enterprise zones in the north of England could raise UK international trade by £12bn a year and add £9bn to UK GDP after 20 years in operation. The jobs gain is put at 150,000. A further study by Policy North established similar findings after studying evidence from 3,000 freeports around the world.

By fixating on the inflated issue of a power grab of Scottish Parliament powers (that are not being grabbed) the SNP is failing to take advantage of opportunities to boost the economy and create jobs. 

Port of GrangemouthTwo obvious contenders the Scottish Government could propose for inclusion in any UK’s Freeport list are Prestwick and Grangemouth (right), but there are others, such as Hunterston, Rosyth and Aberdeen.   

Although Prestwick is not a seaport it enjoys a highly active air freight business and associated businesses that work alongside that. Developing Prestwick as a high tech and avionics freeport could give Ayrshire an economic success story and allow the Scottish Government to sell the nationalised airport on to developers.

Grangemouth already has many port activities. Hunterston offers the advantages of its deep water facility, while Rosyth also has the infrastructure to develop businesses within the existing docklands.  Aberdeen, would surely would look to take advantage of a freeport to help it diversify away from oil and gas.

All that is required is for our politicians to bury their differences and work together for at least some of the time. Jobs and economic prosperity are out there, all it takes is to find the positives in Brexit and exploit them. 

Brian Monteith is a former member of the Scottish Parliament  

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