6. Welsh Conservatives Debate: Free ports

Part of the debate – in the Senedd at 4:36 pm on 8 February 2023.

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Photo of Paul Davies Paul Davies Conservative 4:36, 8 February 2023

Well, the Member needs to read our motion, because the original motion recognises that free ports are an important aspect of developing our economy. And the Member surely recognises that the original motion is not controversial in any sense and merely seeks to demonstrate support for the free-port programme from this Senedd. It certainly doesn't warrant an attempt to delete any part of it. 

From the outset, the UK Government has made it clear that the free-port model has three distinct objectives. The first of those is for free ports to be established as national hubs for global trade and investment, and we know that, from the free-ports programme annual report last year, there is evidence of new investment in free-port areas. For example, free-port status in Humber has enabled the company Pensana to secure a multimillion-pound investment to establish Europe's first rare earth processing hub at Saltend, which is expected to represent around 5 per cent of the world market by 2025. That hub will produce critical components for electric vehicles and offshore equipment. Indeed, that hub has a crucial role in helping establish an independent magnet metal supply chain for the UK and beyond.

Now, Members are aware that free ports are economic areas where tax relief is available for businesses, and there are plenty of other economic incentives for businesses in these areas. Businesses in free-port areas can enjoy enhanced capital allowances, in addition to employer national insurance contributions rates relief and business rates relief. There are also a range of customs benefits for free-port areas that includes simplified declarations and duty deferment on imported goods. And so there are a range of economic benefits for businesses in free-port areas to help them become thriving trade and investment hubs.

Now, the second objective of the free-port programme is to create hotbeds for innovation by focusing on private and public sector investment in research and development. Free ports have developed ambitious plans to innovate, and many are playing an integral role in supporting the UK Government's target to reach net zero by 2050. Indeed, in the east midlands, the free port is using part of its £25 million of seed capital funding to establish a hydrogen skills academy. The academy, which is backed by several universities, is due to open later this year and will be the UK's first practical industry-based training centre, putting the east midlands at the forefront of the UK's net-zero ambition. Free ports, by their design, are environments that help bring innovators together to collaborate in new ways and develop and trial new ideas and technologies, and it's exactly that sort of collaboration and innovation that I'm excited to see at Wales's free ports in the future. 

I've long referred to my own constituency of Preseli Pembrokeshire as being the energy capital of Wales, and should the Celtic free-port bid be successful, I have no doubt that we'll see some very exciting innovation taking place along the south Wales coast. One such area is floating offshore wind, and we know from the consortium's vision that a successful bid for a Celtic free port will accelerate inward investment in new manufacturing facilities to support the roll-out of floating offshore wind in the Celtic sea. We recently debated just how important offshore renewable energy, and particularly floating offshore wind, can be in generating low-cost, clean energy, and so I hope Members will support this important campaign. And in north Wales, let us not forget the excellent campaign for a Welsh free port in Ynys Môn, again with a vision to develop a hub for sustainable energy, which would also support the UK on its net-zero journey.

The third objective of a free-port programme is to promote regeneration through the creation of high-skilled jobs. Free ports have the potential to create widespread opportunities in terms of job creation, and according to free-port estimates, over 41,000 direct jobs would be created in Teeside, over 28,000 jobs in the East Midlands, and over 10,000 jobs in the Liverpool City Region. Some of these job estimates were made in early 2022, and of course, each area is different, but I just wanted to give Members an idea of the significant level of job creation that could be seen in Wales if any of the bids are successful. Of course, the regeneration of an area is largely dependent on ensuring that local people have the skills to access the opportunities provided by the free port, and that's why free ports have skills and workforce strategies as part of their business cases; strategies that are updated regularly to ensure that they're effective and delivering as intended.

Dirprwy Lywydd, it's my hope that the upcoming announcement from UK Government and the Welsh Government confirms that multiple Welsh free ports are successful, so that the benefits of free ports can be felt throughout the country. Free ports have the ability to transform our communities, and I know that Members will want to set out their stalls for why bids in their areas should be successful. The discussions I've had with key stakeholders involved in the Celtic free-port bid continue to be positive and enthusiastic, and I know from my conversations with Members representing other parts of Wales that they, too, have been enthused by the work that has gone on in developing these bids.

Of course, key to the success of any free port is the level of support provided by the UK Government and the Welsh Government. The UK Government has already provided a support package to raise awareness of British free ports with investors, and to highlight the opportunities that there are for investment into British free ports. My understanding is that, once a free port is established, the Department for International Trade will support it with access to its investment and export support services, and that is very welcome. Of course, if a Welsh free-port bid is successful, then it would also have access to these investment and export support services; and more than that, I hope that they'd have access to Welsh Government after-care support too. Therefore, perhaps in responding to this debate, the Minister can tell us what plans the Welsh Government has to support Welsh free ports once they are up and running, and how it intends to work with the Department for International Trade in relation to after-care support.

In the longer term, free ports should be in a position to attract investment and grow international trade independently, but in the very short term, the Welsh Government has a role here, alongside the Department for International Trade, to promote free-port opportunities to global investors.

Now, I appreciate that the Minister is not going to give much away about which site or sites are successful, and so, today's debate really is for us to hear more about the three Welsh bids that are currently being considered and learn more about the role that the Welsh Government will be taking in promoting any Welsh free ports in the future. I've already mentioned the Anglesey bid and the Celtic free-port bid, but there is also a regional bid for south-east Wales too.

And so, on that note, I welcome Members' views on the development of a Welsh free port, as well as hearing more about the bids in their constituencies and regions. We can see the success of free ports in other parts of the UK, and it's important that Wales is not left behind. Free ports can help provide opportunities for generations to come, and so, on that note, I ask Members to support our motion today and show their support for the free-port programme and the opportunities that it presents for Wales. Diolch.