Celtic Freeport progress despite Government communications mix-up

MILFORD HAVEN Port Authority was dealt a short-lived setback last week when the government indicated it would announce five new freeports in Wednesday’s budget. In a Financial Times report published Friday, a government insider confirmed Downing Street was preparing to reveal five additional freeports across the UK, joining the twelve currently designated sites, including those at Milford Haven and Port Talbot, aimed at boosting economic growth and job creation. The report also suggested that Labour Leader Keir Starmer anticipated the new freeports would “bear this government’s stamp,” despite the policy’s origins in Conservative-led initiatives.

However, in a rapid reversal, the government clarified on Sunday that Wednesday’s budget will not announce new freeports. Instead, Chancellor Rachel Reeves is expected to focus on plans and funding to make several existing designated freeports “operational,” moving closer to full functionality with approved tax and customs status. Milford Haven, along with Port Talbot as part of the Celtic Freeport project, and Anglesey Freeport were designated as Wales’s first freeports in March 2024 but remain awaiting full operational status.

Currently, twelve freeports are scattered across the UK, including sites at Inverness, the Forth, Teesside, the Humber, Liverpool, Anglesey, Plymouth, the Solent, the Thames, and Felixstowe and Harwich.

However, not all are classified as operational, as some await final designation of specific tax and customs sites to activate intended benefits. The government confirmed that the chancellor’s budget announcement will establish five new customs sites within existing freeports rather than launching entirely new locations. Ports at Inverness and the Humber will, for the first time, have designated customs sites, enabling the Humber site to become operational and eligible for tax reliefs and funding.

Meanwhile, Inverness is still awaiting final sign-off. Three additional customs sites will be introduced at Liverpool, adding to the city’s existing infrastructure.

Freeports’ impact on UK economy

Freeports, positioned strategically near ports or airports, exempt imported goods from tariffs, a model aimed at spurring economic activity in trade, investment, and job creation. Businesses operating within these zones benefit from tax reliefs, such as property and employment incentives, meant to attract long-term investment.

Originally active in the UK from 1984 until 2012, freeports were phased out by David Cameron’s government. Rishi Sunak reintroduced them as chancellor in response to Brexit, seeking to soften tariff impacts and establish a stable investment climate. Since 2021, the UK has established eight freeports in England and two each in Wales and Scotland.

However, challenges remain, as some officials and critics argue the zones merely shift economic activity rather than creating net growth. Despite these critiques, industry leaders in Milford Haven view the Celtic Freeport as a green corridor that could foster local prosperity through inward investment and job creation.

The vision for Celtic Freeport

For the Port of Milford Haven, expectations remain high as it partners in the Celtic Freeport project. A spokesperson for the port commented: “We’re encouraged that the parliamentary process to formally designate the Celtic Freeport has begun.

Subject to necessary approvals, we are hopeful the Celtic Freeport will be open for business by the end of November 2024.” Tom Sawyer, Chief Executive of Milford Haven Port Authority, added, “The Celtic Freeport’s vision is to create a green investment corridor, helping to drive major inward investment, future skills development, and decarbonisation. For Pembrokeshire’s communities, that means new career routes, opportunities for business expansion, and greater local prosperity.”

While Downing Street’s recent miscommunication may not directly affect ongoing plans, its mixed signals underscore growing concerns over government coordination and the effectiveness of freeports in achieving their ambitious economic goals.

For the Port of Milford Haven, optimism remains high as they await the final approvals to make the Celtic Freeport a reality by the end of the year, contributing to a green and prosperous future for Pembrokeshire and beyond.