We need national cohesion on Freeports to drive innovation and growth
It’s essential for government to encourage Freeports to move ahead at pace. But we also need a cohesive UK-wide plan so that Freeports complement rather than compete with each other, and we release their full potential.
Freeports are anticipated by the government to become national hubs for global trade and investment; powerhouses that promote regional regeneration and valuable job creation, hotbeds for innovation and catalysts to ‘levelling-up’.
Freeports must be allowed to drive forward innovation and growth, without being stifled by government. One example is Malta Freeport, whose legislation “regulates all activities within the Freeport” in support of "efficient and cost-effective operations" and "a solid foundation on which... to excel its edge in its sector of business" and with legislation "continuously being updated... to guarantee the right business climate and effective management."
But equally, Freeports mustn’t be allowed to operate in isolation. They are about two sides of the same coin: the UK’s outward facing post-Brexit strategy for international trade and driving post-COVID-19 economic recovery.
While Freeports have a regional focus, we can only maximise their benefits by ensuring national cohesion; a plan that takes a broad, strategic approach to harmonising regional activity, coordinating sector specialisms and strengths within each region, to encourage targeting innovation and coordinated development.
Similarly, any support they receive through the Department for International Trade should be allocated equitably; and not left to the fact that those Freeport consortia whose voices are loudest gain the best support.
Innovation works best when it’s formed by a consortium or group, and when it’s pooled and shared.
So, this too, must be carefully coordinated if Freeports meet their overall objective to provide the best opportunities for UK plc as a whole. The government has said it “will be establishing a cross-Whitehall governance body to oversee the implementation of Freeports as a whole”; a promising sign.
Multimodal transport connectivity is one example of why national oversight is needed. Excellent transport links cannot be established on a local or regional basis alone, there must be national oversight to support the moving of goods coming out of Freeports efficiently up and down the country.
We have blueprints we can refer to; Hinkley Point C nuclear power plant in Somerset is a major investment programme, creating 25,000 jobs, and boosting local businesses in the supply chain. It has national purpose and focus, and support and investment from all over the UK.
National cohesion would:
- Safeguard national resilience
The Port sector is part of our national critical infrastructure. Freeports are likely to become the most critical assets in that system, so we need to spread risk. The government needs to apply a national risk assessment standard, such as it does with money laundering to counter criminal activity, and it should ensure local and national plans are in place to avoid any potential disruptive outages to business-as-usual port operations. These need to cover data and cyber resilience as well as the financial and physical resilience of Ports.
- Promote stronger competition in the supply chain
De facto, manufacturing companies want to make a profit. Sometimes this leads to short-term decisions not in the best national interest. Freeports are long-term investments designed to help rebuild manufacturing, grow the economy, and drive the green revolution. The government needs a plan to use its buying power to encourage this long-term investment. It should target its innovation funding to green Freeport projects. It should buy according to social value and goods or services that are close to home. It should encourage SMEs to grow rapidly and scale-up technology. And it should support exporting across the world in a coordinated way. It should examine the supply chain in buying, and business support decisions, and apply the criteria throughout.
- Take a national view of skills
The government’s Kick Start scheme has an important role to play. Linked to the UK’s industrial strategy, a complementary national skills strategy must take the opportunities Freeports are providing and run with them. This links back to further and higher education and R&D talent. Look at the strengths of each location or region: feed the skills requirement back into the local college or university curricula, and ensure we’ve got everything covered across the UK.
- Ease regulation to boost innovation
Freeports have the potential to ease regulation, through the Freeport Regulation Engagement Network (page 30). While there’s rightly some caution around loosening Freeport regulations – and its perceived impact on safety controls or working time directives – out of date and inappropriate regulation needs to be updated to allow for innovation. For example, current regulation of the air was designed for manned aircraft. That means drones, air taxis and automated vehicles simply don’t fit the model. Regulation must be fit for purpose, so it doesn’t hinder innovation.
Innovation works best when it’s formed by a consortium or group, and when it’s pooled and shared. Freeports have an important role to play in ‘levelling-up’ regional deprivation. But if we are really going to drive the UK into the international marketplace, only national coordination can ensure we gain maximum benefit.