Freeports: What are they and where will they be in Wales?

Freeports have different tax and customs rules designed to act as incentives for investment and trade. Credit: PA Images

The two successful Freeport bids in Wales have recently been announced by the UK and Welsh Governments.

But what is a Freeport and where will they be created?

  • What is a Freeport?

The idea of a Freeport isn’t new. There are around three thousand of them worldwide. 

Freeport status creates a special economic zone, centred on a sea port (or airport or even a rail hub) with different tax and customs rules designed to act as incentives for investment and trade.

The UK Government describes them as “special areas within the UK’s borders where different economic regulations apply.”

The UK Government said Freeports are “special areas within the UK’s borders where different economic regulations apply.” Credit: PA Images

The most recent move by the UK Government to establish Freeports stems from promises made by the Conservative party around the time of Britain’s departure from the European Union.

  • Who is making the decision?

Although the UK Government is the prime mover of the current Freeport Programme, the decision on where they will be based here in Wales was made jointly with the Welsh Government.

That agreement was announced yesterday (Wednesday 22) after a long-standing dispute over the amount of money promised by the UK Government. It will now invest up to £26m in each Welsh Freeport, matching the amounts made available to similar schemes in England.

A bidding process was launched and ended last year, with three bids having been made. They had been jointly assessed by officials from both UK and Welsh Governments.

  • Where will the newly-announced Freeports be based?

The Celtic Freeport - covering Milford Haven and Port Talbot - and the Anglesey Freeport in North Wales have been chosen as Wales' first Freeports.

Together, both freeports aim to attract £4.9bn in public and private investments, with the potential to create around 20,000 jobs by 2030.

Celtic Freeport

This multi-port bid covers Milford Haven and Port Talbot and was backed by a consortium made up of Associated British Ports, Neath Port Talbot Council, Pembrokeshire County Council and the Port of Milford haven. It was also supported by other businesses in the area along with energy companies and universities.

Freeport East in Anglia was recently given final approval by the UK Government. Credit: PA Images

Its backers say it will create a “green innovation and investment corridor” in the South West which will accelerate “innovation and [encourage] significant investment, while fast-tracking modern skills for new green industries and national decarbonisation.”

They say it will “support over 16,000 jobs and generate up to £5.5 billion of new investment.”

Anglesey Freeport

Based around Wales’ busiest port, Holyhead, the bid was led by Holyhead’s owners Stena Line and the Isle of Anglesey County council.

The Welsh Government said Freeports have the "potential to help increase economic activity across Wales". Credit: PA Images

They said that “securing Freeport status can deliver real, transformational change for communities across Anglesey and the wider North Wales region.”

And the backers estimate that it would create up to 13,000 high-salary jobs and deliver a £1bn increase to UK GDP.

They say that it would also make it easier for businesses who use the port to trade between the UK and the European Union and who have seen post-Brexit customs issues impact the levels of trade.

  • What the two Governments say

First Minister of Wales, Mark Drakeford said: "The Welsh Government has a clear economic mission to transform the Welsh economy, creating a stronger, fairer and greener future.

"The designation of these sites as Wales’ first freeports will reinforce that mission, building on the significant investments and partnerships we have made in these regions over many years.

“The joint working between governments on the freeport programme should serve as a blueprint for future intergovernmental work on a whole range of issues.”

Freeports like these have been confirmed - in Milford Haven and Port Talbot, as well as Anglesey. Credit: PA Images

Prime Minister Rishi Sunak said: "Wales is a thriving part of the UK, and today’s new Freeports will see businesses and opportunities for people in and around Anglesey, Port Talbot and Milford Haven go from strength to strength.

"Everyone deserves equality of opportunity and working closely with the Welsh Government has helped to deliver these fantastic new sites.

"Today’s Freeports show the hard work being done day in, day out to bring new, high-skilled jobs to communities across Wales and deliver on my promise to grow the economy."