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Politics

Freeport will not be a silver bullet

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AT THE beginning of September, before political focus temporarily dimmed, the Welsh and UK Governments invited applications for Wales’s first freeport, which is planned to be up and running next year.
After years of wrangling, Welsh Ministers agreed to support freeport policies in Wales after the UK Government agreed delivering them would meet the Welsh Government’s demands for a “partnership of equals”.
Part of the agreement reached placed Wales on the same footing for starter funding after three years in which the UK Government refused to fund Wales to the same level as Scotland and England.
A Welsh freeport will be a special zone with the benefits of simplified customs procedures, relief on customs duties, tax benefits, and development flexibility.
Milford Haven Port Authority, which has already expressed interest in Freeport-status, to push the Haven’s claims to be the location of a Freeport in Wales.

WHAT IS A FREEPORT?

Freeports are a special area where normal tax and customs rules do not apply. These can be airports as well as maritime ports. At a Freeport, imports can enter with simplified customs documentation without paying tariffs.
Businesses operating inside designated areas in and around the port can manufacture goods using the imports and add value before exporting again without ever facing full tariffs or export procedures.
Suppose the goods move out of the Freeport into another part of the country. In that case, however, they must go through the full import process, including paying any tariffs.
The UK was previously home to several Freeports, including Liverpool, Southampton, and the Port of Tilbury.
The legislation governing them was not renewed in 2012 because – while the UK remained a member of the EU and in the EU customs area – the economic case for keeping them was lost.
The UK could have chosen to retain freeports; nothing in EU law prevented them. Ending them was a political choice made by the then-administration.
Despite the absence of freeports, England remains home to 24 free zones, which operate on the same principle: in the Tees Valley and Manchester.

THE BENEFITS FOR PEMBROKESHIRE

The Milford Haven Waterway, a busy energy industry hub, is also a sensitive marine environment.
Supporting a scheme which could potentially undermine the Haven Waterway’s environmental status while pursuing a green energy future will be a difficult balancing act.
Milford Haven Port Authority argues that locating a Freeport in Milford Haven makes sense due to the Haven Waterway’s status as a nationally strategic energy asset and a key trade hub for the British energy supply.
A Freeport, it claims, will be an essential vehicle to help safeguard the existing professional energy jobs and skillsets to utilise for low-carbon ambition while regenerating the economy.
The Port Authority says the port’s existing energy infrastructure presents the opportunity for large-scale hydrogen production and injection with minimal additional infrastructure requirements. Alongside strong wind, wave and tidal resources, deep water access has already accelerated an emerging renewable sector such as floating wind in the Celtic Sea.
The Authority claims that a Freeport could support supply chains from equipment manufacturing to system integration and power connectivity, helping companies develop bankable projects and lower energy costs for UK consumers.
The proximity to major shipping routes and the existence of LNG terminals mean the Haven Freeport could also support a cleaner global maritime sector.

NOT PLAIN SAILING

Although freeports could, theoretically, redress imbalances in the UK’s economy by encouraging economic activity in areas where the economy is weakest, a careful balance must be kept.
The use of government subsidies for freeports – whether through direct grants or tax breaks – potentially falls foul of the WTO rules upon which Westminster seems determined to trade.
While freeports are successful in stimulating investment and jobs in a range of locations worldwide, they are neither a “silver bullet” for all locations nor the only way of boosting the UK’s main global gateways.
Freeports are notorious globally for being used to evade tax, launder money, and ease the transportation of stolen or illicit goods.
Moreover, as the experience at the Teesside Freeport development shows, they can lack any form of accountability and create fewer and less widespread economic opportunities than hoped.
The financial scrutiny of the Teesside Freeport is not much more than zero, and a box-ticking exercise carried out without any forensic examination of where the money goes and how contracts are awarded.
Milford Haven Port Authority operates a trust port. There are no shareholders or owners, and, importantly, its Board has independence of action without independent oversight.
A freeport’s financial structure is, if anything, even more financially opaque.
As public money is being invested in a freeport, proper public scrutiny – not merely loose “oversight” or lip service -must be the minimum standard.
Moreover, a freeport could be a money pit and public funding magnet. Too big an opportunity and too large a political totem to allow to fail, even when its economics don’t add up, freeports could end up being propped up by public money while delivering less than promised on the tin.

THE COMPETITION

In all the positive publicity about a possible Freeport in Milford Haven, the Haven is not alone in wanting one.
Holyhead is Wales’s largest Irish Sea port. It is also in the key marginal constituency of Anglesey.
The stalled Wylfa development for nuclear power (part of the UK’s Government economic and energy strategy) is also on the island, and an already massive and expanding wind farm lies off its coast.
Holyhead links the North Wales corridor to England’s northwest and the Midlands. Transport infrastructure is already better to and from Anglesey than from Pembrokeshire to those destinations and will need less investment.
Cardiff Airport is another potential rival and one that could be especially attractive to the Welsh Government.
Since it bought a controlling stake in the Airport, the Welsh Government has propped it up with loans and grants.
Without Welsh Government support, the Airport would be insolvent.
The Welsh Government might be persuaded that making Cardiff Airport the first of Wales’s freeports would kill two birds with one stone.
It would attract more air and freight traffic to the site and decrease the Airport’s reliance on financial help from the Welsh Government.
As with Holyhead, the transport and infrastructure links from Cardiff Airport to other parts of the UK – in this case, the Midlands, the M4 corridor, and Bristol – are superior to those connecting Milford Haven with those regions.

MOVING MONEY

A substantial concern expressed in a report on the Freeport scheme presented to the County Council is the undeniable fact they often do not create jobs but move them from one area to another.
The economic displacement of employment and funding opportunities could pull jobs and investments from one community to another.
If a new freeport only moved jobs and capital from (say) Newport to either Milford Haven or Holyhead, the economic case for their creation becomes – at best – shaky.
That raises the question of whether freeports provide value for public money through direct investment or tax relief.
Freeports could also be used to erode the high standards the UK currently places on workers’ rights and the environment.
Granting freeport operators carte-blanche to do what they want within a designated development area: for example, by allowing shortcuts through planning and environmental law or through allowing employment practices prevented elsewhere, involves trade-offs with unions and planning authorities could find problematic.
While jobs are needed, it is reasonable to ask what jobs and at what cost.
The experience of Welsh Enterprise Zones suggests few new jobs at a massive cost per head.
At a time of enormous hardship, it’s easy to be gulled by the prospect of large sums of public money and the prospect of that money pulling in private investment.
Tax and tariffs apart, a cautious individual might wonder why, if freeports are such a sure-fire thing, they need so much public money.

News

Pembrokeshire airport lease expected to be completed by end of year

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HAVERFORDWEST’S council-run airport, which had a circa £119,000 deficit last year, is expected to be leased out by the end of the year following “reasonably complex” negotiations, councillors heard.

Back in May, members of Pembrokeshire County Council’s Cabinet supported the leasing of Withybush Airport as part of plans to make the facility cost-neutral to the authority.

Last year, Pembrokeshire County Council’s Cabinet, members heard the financial position at the council-supported Haverfordwest/Withybush airport deteriorated in 2022/23, with an out-turn position for 2022/23 of £238,000.

That loss has been reduced to an expected £119,000 for 2023/24 “following an extensive review of the operations of the airport”.

At the July 18 meeting of Pembrokeshire County Council’s full council, a series of submitted questions on the airport were heard.

Merlins Bridge councillor John Cole asked: “With the council leasing out the Haverfordwest airport, can members be assured that the lease is at comparable rent with similar airport facilities, and the airport being offloaded purely as a cost savings measure?”

He also asked a second related question: “Are current users protected and assured that their tenancy and rents currently payable to the authority are taken into consideration?”

Responding, Deputy Leader Cllr Paul Miller said the proposed letting was considered to be “best letting,” with restricted private documents detailing the figures available to all members.

On the second question, he said existing tenants had been involved throughout the process, and once the new overall lease was in place tenants would be protected through legislation.

However, he stressed the new leaseholder would be able to change conditions in the future and the council would “not dictate terms” in the future.

A further question was asked by Saundersfoot South councillor Chris Williams: “On a recent services meeting back in 2023, we had a productive meeting at Withybush Airport to look at the impact regarding costs to PCC and to consider options with regards to its future operation.

“Can you please clarify if the airport is still owned and operated by Pembrokeshire County Council and if so at what cost since April 1, 2024?”

Cllr Miller said the airport was still currently owned by the council following the Cabinet decision, with “reasonably complex” negotiations ongoing, complicated by land ownership issues and the need to obtain the civil aviation licence.

“Hopefully by the end of the calendar year we will have completed that transaction,” Cllr Miller said, adding that £25,000 had been spent since April 1.

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Charity

More than 19k animal lovers call to end greyhound racing in Wales

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IN RSPCA open letter signed by an astonishing 19,715 people which calls for the end of greyhound racing in Wales has been delivered to the First Minister’s office.

The open letter, addressed to Vaughan Gething MS, the First Minister of Wales, stated that the thousands of signatories wish to see a phased end to the “outdated practice” in Wales in order to protect the welfare of countless dogs at risk of injury – or worse.

The RSPCA is part of the Cut the Chase coalition – which includes the Dogs Trust, Blue Cross, Hope Rescue and Greyhound Rescue Wales – who have long expressed concern about the negative welfare consequences that racing and the greyhound industry has on the dogs involved. The regulated sector’s own figures show that between 2018 and 2023, 2,751 greyhounds died or were put to sleep for reasons other than natural causes or illness. (data covering England and Wales).

Meanwhile, more than 26,500 injuries were recorded from greyhound racing over the same time period*. The latest statistics from the Greyhound Board of Great Britain (GBGB) – which regulates Wales’ only track – show that the number of dogs involved in racing who died increased by 47% in 2023, further adding to the coalition’s concerns.

Wales could be the first nation in the UK to phase out the activity. Earlier this year, the Welsh Government carried out a 12-week consultation which is considering the future of greyhound racing. The consultation closed in March.

The Welsh Government has yet to publish the outcome of the consultation – and in the meantime dogs at the Valley Greyhounds Stadium in Ystrad Mynach continue to risk death or serious injury due to being knocked over or falling at speeds often in excess of 40mph.

Published results from races and trials at the Valley track, analysed by Greyhound Rescue Wales, shows that, between 3 March and 29 May this year, nine dogs were recorded as “fell” and 15 more were recorded as “knocked over”.

But these stats don’t show the full picture. Injury data from individual tracks and veterinary reports aren’t released publicly, so the exact welfare impact of the dogs who have fallen in races remains unknown.

Billie-Jade Thomas, RSPCA Senior Public Affairs Manager in Wales said: “Greyhound racing is inherently dangerous for the dogs involved. Running at speed around oval tracks causes significant injury to many dogs, and in some cases, the injuries are so severe that it is necessary for dogs to be put to sleep.

“There are only 10 countries in the world – including all UK nations – where commercial greyhound racing still goes on in 2024. But the Welsh Government now has a golden opportunity to commit to phasing out greyhound racing in Wales once and for all, sending an important message to the rest of the UK that they need to act to deliver a better life for greyhounds.

“We’d like to thank everyone who signed our open letter – we were delighted to have such a strong response and have more than 19,000 people support this cause. It really does show the strength of feeling there is about ending greyhound racing, and what we can achieve together for animal welfare.”

At its peak, there were 250 licensed tracks in the UK. Today, only 20* remain, with only one that is unlicensed in Great Britain.

The Cut the Chase coalition has called for greyhound racing to be phased out over the next five years, and remains committed to the welfare of the dogs involved in the industry during this time.

Phasing out greyhound racing in Wales is a major campaign priority for the RSPCA, as the charity marks its landmark 200th anniversary this year. Since its formation in 1824, the RSPCA has changed more than 400 laws for animals.

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News

Senedd Chief demands evidence from Gething on Blythyn sacking

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IN an unprecedented move, the Senedd Chief Executive has issued a formal request to First Minister Mark Drakeford, asking him to provide the evidence that Vaughan Gething relied upon to sack Hannah Blythyn. This request comes in response to a motion put forward by the Welsh Conservatives, demanding transparency from the Welsh Government.

Andrew RT Davies MS, Leader of the Welsh Conservatives, emphasised the gravity of the situation, stating, “This notice to the First Minister is unprecedented. We are facing unprecedented circumstances and hope the First Minister will comply with this notice. The people of Wales deserve answers regarding this saga.”

Davies also raised concerns about the potential existence of other undisclosed communications relevant to the ongoing COVID inquiry. He remarked, “The next important question is how many other sets of messages that may be relevant to the COVID inquiry are lurking around.”

The Senedd Chief Executive, Manon Antoniazzi, has given the First Minister until 5pm on 1st August to respond to the motion. The letter detailing this request has been made public and is expected to increase pressure on the Welsh Government for greater transparency.

The Welsh Conservatives’ push for accountability highlights a significant moment in Welsh politics, with the potential for broader implications on the management and oversight of governmental decisions during the pandemic.

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