A FREEPORT in Wales would bring new economic opportunities to a sector bashed by a "double-whammy" of Brexit and coronavirus, an industry expert has warned – but delays to the bidding process here means Wales risks falling behind rival English candidates.

Freeports are special economic zones with different rules on taxation that are designed to promote regional economic growth. The UK government is pushing ahead with reviving the scheme and has already announced the creation of eight in England. 

Ian Davies, the head of UK port authorities for Stena Line, said Welsh ports had been "severely affected" by Brexit, with trade down by more than 25 per cent compared with pre-pandemic levels.

Freight from Northern Ireland was going to other UK ports, while Irish traders were choosing to sail around Britain and ship directly to other European Union members, rather than use the 'UK land bridge' route between Ireland and the continent.

"The longer people find alternative trading routes, the [more] they become established," he told the Welsh Affairs Committee of MPs. "We’ve taken a big economic hit over the past 12-18 months. Some of those volumes will come back, but west-facing ferry ports particularly have been hit hard."

Meanwhile, ports and ferry operators were navigating the effects of the pandemic, which had cut into a "sizeable" part of the market. Davies said tourist traffic was down 80 per cent and freight down 35 per cent due to coronavirus.

He told MPs it was "absolutely" Stena's intention to bid for a freeport in Holyhead, but while there had initially been good – but separate – discussions with Welsh and UK ministers, things had "gone very quiet over the past few months".

“Any delay is a wasted opportunity," he said. "Our preference would be to have clarity and start moving on these things.”

Davies warned that rival freeport candidate Liverpool, 90 miles to the east, was "ahead of the game" and he called for "aligned thinking" from Cardiff Bay and Westminster.

Ynys Môn MP Virginia Crosbie said the bidding prospectus for English freeports had already opened and closed, with eight candidate locations announced in March.

"I've got companies who are keen to invest on Anglesey should it become a freeport," she said. "Will we have to sit and see Liverpool booming as it becomes a freeport [while] we actually see Wales falling further behind?"

Davies said "the longer we don't have certainty on freeports, then businesses will make their own minds up" and "the sooner we start moving on this business, the better".

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Wales' economy minister Vaughan Gething described dealings with Westminster over freeports as "frustrating and entirely uncertain".

He said Welsh minister had written to the UK government in February offering to be "constructive partners" on a freeport project, that would involve some overlap between devolved and non-devolved responsibilities.

But no "formal offer" for a freeport had been put forward by Westminster, and those delays were being strained by "unhelpful" comments from the office of the Secretary of State for Wales, he added.

Rebecca Evans, the Welsh finance minister, said "certain conditions have to be met" for her government to approve a deal – the Welsh Government would need to be joint decision-makers with Westminster and help choose a freeport's location, would need to be guaranteed that a freeport would meet Wales' fair work and environmental policies, and would "absolutely have to have a fair funding settlement".

"If every freeport in England gets £25million but we only get a Barnett share of £8million, that clearly sets out from the outset that our freeports would be at a huge disadvantage... and there's no rationale for treating a freeport in Wales differently," she told MPs.

Gething said Wales risked being "sold short" by Westminster, but without a formal offer from Westminster, there was no basis on which freeport negotiations could be held.

Welsh secretary Simon Hart said the UK government was also "keen to see some progress" but said relations with the Welsh Government had cooled despite being "initially quite warm" under Gething's predecessor Ken Skates.

He described the Welsh Government's conditions as "rather innocent-sounding but actually pretty drastic reasons why we haven't been able to sign on the dotted line". 

Hart said the difference in funding offers were because a freeport would "produce numerous advantages" for the Welsh Government including higher tax revenues and inward investment.

"I don't think it's quite as simple as saying England gets £25 [million] England and  Wales gets £8 [million], therefore it isn't fair and we're taking our toys home," he told MPs. "To me that doesn't seem a legitimate argument."

But delays to the plans in Wales risked "job displacement" to England and proved why decision-makers should "get on with it," he added.

A Welsh freeport had been a manifesto commitment for the UK Conservative Party, Hart said, and "the determination is undiminished for us to do this," Hart said.

On the risk the UK government could push ahead with freeport plans without striking a deal with Welsh ministers, Gething said such a "provocative step" would cause "a huge constitutional row".

"I just don't understand the purpose of that – why would you want to pick a fight on this issue, when we're prepared to talk?" he said.

  • This article originally appeared on our sister site The National.