5. What assessment of the tax implications for Wales has the Minister made of the UK Government's freeports policy? OQ56832

Whilst we are willing to engage constructively with the UK Government on this issue, we still haven't received a formal proposal from the UK Government to establish a free port in Wales. Hence, in the absence of detail, we're unable to assess fully the tax implications of the policy.

I thank you for that answer, Minister, but I'm not at all surprised by it. I have put on record my doubts about free ports. I'm not convinced of the economic argument, and I have concerns relating to the environment, and also to any labour standards that go alongside that. But what I am sure of, however, is that Wales must not be short changed, our key strategic ports like Milford Haven must not be disadvantaged, and policies must not be imposed on us by the UK Government. So, has there been any progress on these issues since July, which is when you last outlined the details coming out—or lack of details coming out—from UK Ministers?

There's been no real progress since July, unfortunately. And, in frustration, in August, I wrote a joint letter with Ministers from the other devolved Governments to the Chief Secretary to the Treasury seeking an urgent meeting on free ports, and I'm very disappointed that we have yet to receive a response to that, and disappointed, really, with the general lack of engagement from the UK Government on this policy. As I say, we do remain committed to working collaboratively with the UK Government on free ports, although we do share Joyce Watson's concerns about displacement of activity, for example.

There are three things that are really important if we are to work with the UK Government on this, the first being joint decision making between the UK Government and the Welsh Government in terms of where those ports will be and what the parameters of the deal will be—conditionality, because, like Joyce Watson, we are really concerned about the effect of free ports, potentially, on standards. So, it's important that any free ports in Wales reflect our values and our priorities in terms of environmental standards, but also fair work, for example. And, crucially, it's important that we do receive a fair funding settlement. So, clearly, this is a place-based intervention for which the Barnett consequential just isn't an appropriate way forward. It would not be appropriate for UK Government to be spending £25 million on a free port in England, but only £8 million in Wales, for no other reason than they think that a Barnett share is appropriate.

Minister, manufacturing accounts for just 10 per cent of the UK's gross domestic product, which is amongst the lowest of all countries in the Organisation for Economic Co-operation and Development. Increasing manufacturing can boost national earnings, and the value of free ports lies in its power to boost economic activity and create new job opportunities in areas of deprivation. A report by the consultancy Mace said that free ports could boost trade by £12 billion a year, increase UK GDP by £9 billion a year and create 150,000 new jobs. I know you just mentioned three points in the previous answer of what you were looking to do and achieve, but do you accept, Minister, that any initial reduction in tax revenue caused by free ports will be offset by the benefits of greater economic activity in deprived areas, more jobs and increased trade, thereby growing the economy as a whole? Thank you.

As yet we haven't had those discussions with the UK Government, because they haven't yet responded to our letter from August seeking that urgent meeting. But I think it's fair to say that any kind of open-ended commitment by the Welsh Government to match the UK Government's offer in terms of non-domestic rates and stamp duty land tax, or land transaction tax as it is in Wales, would present a risk to Welsh tax revenues until we have those discussions to better understand the policy that the UK Government intends to implement. And we are more than ready to have those discussions, but, as yet, we haven't even had a reply to a simple letter.