Scotland in line for free port after Brexit

Grangemouth is one of several docks operated by Forth Ports. Picture: Contributed
Grangemouth is one of several docks operated by Forth Ports. Picture: Contributed
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Scotland is in line to be the location of at least one of 10 free ports planned by the UK Government as a way of boosting trade following Brexit, an industry leader has said.

Forth Ports, one of the largest operators in the country, is considering whether one of the seven sites it manages north of the Border would be suitable for such a venture.

Charles Hammond, the company’s CEO, told Scotland on Sunday that free ports could be a “useful tool” in growing trade, but added they should be implemented as part of a wider package to help import and export businesses.

The UK last had such enterprise zones in 2012 and Boris Johnson has claimed they could create jobs in “left-behind areas”.

Both seaports and airports will be able to apply for free port status under Westminster plans. Such free trade zones are designated areas where usual tax rules do not apply. Goods can be imported, manufactured and re-exported without being subject to tariffs.

A 2013 US Congressional report estimated there were about 3,500 worldwide, with around 80 across the EU - mainly in Eastern Europe.

Forth Ports, which operates Grangemouth, Leith and Dundee docks among others, is weighing up the possibility of such an application.

The company’s biggest port, Tilbury, on the south-east coast of England, is also being considered.

“There probably will be one of the 10 free ports in Scotland,” said Hammond. “The UK Government will try and balance it so they are not accused of bias towards any one given area. There has to be a level playing field.

“But I’m not certain free port status gives you a major advantage unless other conditions apply.”

He added: “Free ports become interesting when raw materials are brought in, and they become the base for a manufacturing or added value business.

"You have a complex where goods come in, they are outside UK customs and duty. The raw materials are turned into something else and then re-exported without duty.

“The whole theory is the Government gives up the duty in favour of creating jobs and economic development.

“What it doesn’t do is stimulate manufacturing by itself. In my own view, I see free ports as a useful tool for invigorating trade.

“It’s a subset of what I think is a wider premise of creating investment zones around ports. By investment zones, I mean creating conditions such as simplified planning, encouraging investment, and superior connectivity.

“It allows businesses connected to a port to start-up in a minimum period of time with a minimum of red tape.”

Labour MP Barry Gardiner, shadow international trade secretary, said earlier this month that the planned UK zones did not constitute new investment.

“It is a race to the bottom that will have money launderers and tax dodgers rubbing their hands with glee,” he told the BBC.

A spokesman for the SNP said: “While the usage of free ports is not in any way illegal and in some situations can bring benefits to communities, it does encourage organisations to centre their operations in a jurisdiction that does not charge tariffs for imports and exports of goods meaning free ports could be used as a tax avoidance loophole for companies to avoid paying tax on imports.”