My notes from a public meeting about SEZs and Freeports with the Plymouth Green Party on 29th January 2025

My notes from yesterday's (29th Jan) public speaking event on SEZs and Freeports with @JimFunnel1 and @PlymouthGreens it was great with a very lively Q&A session.

Notes

I will talk about what you won’t see on the many council and corporate websites, that are backing Sunak and Starmer’s nationwide rollout of 74 deregulated SEZs and 12 Freeports.

You would think that the UK MSM would be on top of exposing the true nature of councils and companies embroiled in the setup of free zones. The complexity of free zones is their camouflage which needs proper and urgent scrutiny. The public and their respective communities are not being sufficiently informed about the impacts free zones are notoriously known for implementing. At their worst free zones remove the obstacles of regulation and democracy for profit gains at the expense of local community infrastructure and preservation of the environment.

What is a Special Economic Zone (SEZ)?

An SEZ is a designated region 'freed' from the host country's regulations, including suspension of the rule of law which is then tailored for financial gains, and extraction purposes, be that minerals, fossil fuels, or in the case of Dartmoor, Lithium.

The United States Geological Survey identifies “Dartmoor as one of the top five lithium-enriched granite areas worldwide. Dartmoor is now a part of The Plymouth and South Devon Freeport/SEZ. The granite in which the lithium-rich waters are found stretches from the Isles of Scilly 25 miles off the Cornish coast to Dartmoor in Devon.

The Dartmoor National Park wasn’t even aware of the fact it was incorporated in the Freeport/SEZ which is 75km in diameter. Corporations are trusted to ‘self-regulate' inside the boundaries of the SEZ, meaning they can create their own rules, this is known as Adam Smith’s ‘Invisible Hand’ something the EU implicitly rejects as antithetical to the Single Market.

SEZs can house a Freeport, an airport, whole towns, entire cities, and rural areas under a ‘private/public governed authority.’

The UK’s 74 SEZs range from 34 to 75km in diameter. Dartmoor is the biggest. SEZs are expansionist by nature, as businesses chase 10-year tax breaks, and a raft of deregulations that favour the private sector. Companies inside the boundaries of SEZs compete in an unlevel playing field without contributing anything to communities other than job displacement, modern day slavery, environmental pollution, and badly made products.

So, think of an SEZ as a room within a room, or a state within a state.

What is a Freeport?

Traditionally, a port is publically owned and regulated, and deals mainly with transhipment, importing and exporting goods around the world. Publicly owned ports come under port governance where local control over port infrastructure prevents profiteering.

Freeports are privately owned and are all about extending tax and customs advantages to businesses. Freeports come with relaxed laws and by extension relaxed enforcement of those laws.

In terms of what Freeports can achieve, there is no evidence to confirm that Freeports encourage economic growth or provide jobs for local people. Freeports in the wrong hands share similarities with organized crime syndicates. Illegal activity comes in numerous forms, weapons trading, drugs, stolen art, private banking, moving/storing of gold, money laundering, human trafficking, and the scrapping of minimum wage amd Human Rights abuses.

UK Freeports are run by stand-alone corporations with a future scope and incentive to expand into the surrounding SEZ territory.

All UK SEZs and Freeports were set up with secondary legislation, which means pretty much zero Parliamentary and public scrutiny.

Now for some numbers.

There 48 SEZs and 8 Freeports in England

18 SEZs and 2 Freeports in Scotland

8 SEZs and 2 Freeports in Wales

Bidding on all free zones took place between 2021 and 2022.

Labour MPs, Mayors, councillors, Lords, and Baronesses were active board members of Sunak and Truss’s nationwide SEZs/Freeports consortia.

Each SEZ recieves £160 million in State aid multiplied by 74 = £11 billion 840 million

Each Freeport receives £25 million seed capital which is private money multiplied by 12 = £300 million

Note that Sunak’s flagship Brexit SEZ/Freeport at Teeside has already spent £560 million of taxpayers money. Profits are split 9/10 in favour of the private sector.

Those figures are actually not big enough for long term investment, but are sufficient for a boom-and-bust approach.

What is the difference between Freeports/SEZs in the EU and the UK?

It comes down to EU regulations on State Aid where the European Commission is charged with ensuring that State aid rules are applied and observed equally across all the Member States to prevent fragmentation and distortion of its Single Market. The EU prohibits govts of member states from allocating public subsidies to companies of their choosing as a profit motive.

The EU cannot accept a country that has laws in place that create unfair competition by setting up an unlevel playing field.

This is why Keir Starmer says "There will be no rejoining the EU in my lifetime.”

Labour along with the Tories know that Brexit has rendered the UK capital hungry and desperate for growth. The duopoly are selling off UK sovereignty and vast swathes of territories to foreign capital such as Blackrock, DP World, PEEL Group, Deloitte, Exxon Mobil, Chevron and many more corporations with atrocious track records in fraud, tax evasion, human rights abuses, environmental pollution, weapons smuggling, stolen art, and all the while perpetuating the 40-year-old lie that is Foreign Direct Investment (FDI). All public services are privatized, councils are bankrupted and asset-stripped ready for private equity to step in and buy up, on the cheap, all public buildings, agricultural, business, and residential properties under mass Compulsory Purchase Orders (CPOs). Last October 2024, the Labour Govt department for Ministry of Housing, Communities and Local Government quietly published an update on Compulsory Purchase Orders, called Guidance on the Compulsory Purchase, it is 189 pages long.

What I call ‘Zone Fever’ was smuggled inside the Brexit Trojan Horse. The transition period after Brexit is currently busy with preparing the UK for total privatization.

It gets worse. What is ISDS and LCIA?

Investor-State Dispute Settlement (ISDS) allows corporations to sue Govts for billions in damages when a corporation believes its rights have been infringed upon; such as polluting the environment, shredding workers rights, and making faulty products. ISDS is a secretive corporate justice court that can bypass a country’s domestic courts and sovereignty, it was set up by The World Bank in 1966, it has a committee of 3 individuals, none of whom have a law degree. ISDS also has another UK equivalent known as the London Court of International Arbitration (LCIA), which is written into the 25-year licenses of all 86 UK free zones. ISDS is written into the UK's post-Brexit CPTPP free trade deals. Jacob Rees-Mogg’s Retained EU Law bill sunsetted 600 laws on 31st December 2023 with thousands more for the chop by 2026, the 3 main targets were employment rights, food safety and environmental laws. The REUL Bill is now in Keir Starmer’s intray.

Read Silent Coup - How Corporations Overthrew Democracy by @kennardmatt and @ClaireProvost for more on ISDS and SEZs.

What is the ideology behind Freeports and SEZs?

The current ideology embraced by Sunak, Truss, Starmer, and Reeves, hails from the US, the goal is to abolish the centralised state and replace it with more manageable small states all of which are privatised. This has its roots in empire-building and British colonialism from the East India Company in 1600 through to Hong Kong and Singapore in the mid-1800s, where the British installed dozens of Freeports, bringing with them their own laws, and courts, this was known as ‘China’s century of humiliation.’

In the 1980s Thatcher and Geoffrey Howe’s aim was to turn the UK into 1 big tax haven filled with dozens of free zones, subdividing the land for corporate rule, but they came up against the EU’s rules on State aid and SEZs.

What comes next after Freeports and SEZs?

Freeports and SEZs are stepping stones to charter cities, these are a type of city in which a guarantor from a developed country would create a city within a developing host country.

The public is basically paying for the privatisation of their own towns, rural areas, and cities.

Once the UK’s Freeports and SEZs have sufficiently established themselves, they grow by penetrating the social collective fabric of a region, a charter (private) city will eclipse and replace the ‘public city.’ Charter cities are hotbeds of corporate corruption as governance powers are fully handed over to CEOs, under ’localised freedoms.’ Cardiff would compete with Birmingham, Plymouth would compete with Glasgow, and so on, tax rates and laws between cities would wildly vary causing fiscal anarchy and societal chaos.

List of companies working with the 3 councils of Plymouth, South Devon and South Hams.

Babcock secures a multi-million pound contract in partnership with Devon defence vehicle designer and manufacturer Supacat. This contract will deliver 90 new jobs and enables Babcock to expand its operations in the Freeport’s South Yard tax site

Tax benefits are available at the Freeport’s 3 tax sites, located at:

South Yard, the centrepiece of the Freeport’s innovation hotbed, offering industrial units and a mezzanine office space within a purpose-built innovation centre

Langage, providing a variety of industrial units focused on advanced manufacturing and logistics

Sherford, aimed at logistics purposes, providing warehousing, storage, and engineering space.

Last October 2024 The Labour Goverment published a 189 page document on Compulsory Purchase Orders, CPOs apply to business, agricultural, and residential properties.

The rollout of Special Economic Zones (SEZs) and freeports in the UK has sparked concerns over the potential loss of public autonomy. Here are some key downsides:

Reduced Democratic Oversight: SEZs and freeports often operate under different regulatory frameworks, which might bypass standard democratic processes. This can lead to a situation where local and even national laws are less effective or applicable within these zones, reducing public and elected officials' oversight over economic activities, land use, and environmental regulations. The governance of these zones can be outsourced to private entities or special bodies, which might not prioritize public interest over corporate benefits.

Erosion of Public Control Over Land and Resources: These zones can lead to significant portions of land being controlled by private interests with minimal public input, potentially leading to a scenario where public land is sold or leased under favourable terms for private entities rather than for the benefit of local communities. There have been allegations and concerns about land deals in areas like Teesside, where public land was transferred to private hands at very low costs, suggesting a loss of control over public assets. Mayoral development corporations can bring about regeneration by assembling land and providing infrastructure over a wide area to secure or encourage its development by others. A Mayoral development corporation may do anything it considers appropriate for the purposes of its object (i.e. securing the regeneration of land in its area). Likewise, it may have powers to acquire land in its area by compulsory purchase.

Taxation and Financial Transparency: The tax incentives provided to businesses within SEZs and freeports can be seen as a form of corporate welfare, where public revenue is foregone in favor of private profit. This can lead to reduced public funds for services, and there's also the worry about these zones becoming havens for tax evasion or money laundering, further diminishing public financial control.

Impact on Workers' Rights: Deregulation in free zones often leads to a rollback of labour standards, potentially undermining workers' rights as companies could exploit the regulatory leniency to reduce wages or bypass labour protections. This has been a point of contention, with critics arguing that the drive for economic growth might come at the cost of workers' well-being.

Environmental Regulations: Freeports and SEZs deregulatory frameworks lead to ecological degradation or pollution, as the drive for economic activity overshadows environmental considerations. There have been reports of environmental concerns linked to freeport developments, like in Teesside, where industrial activities have been linked to marine life damage.

Economic Displacement: There's a risk that SEZs and freeports might not create new economic activity but rather displace existing businesses from outside the zones to within, leading to no net economic gain but rather a redistribution that favors areas with freeport status, potentially at the expense of other regions.

Public Autonomy in Policy Making: The concentration of economic activity and decision-making power in these zones could lead to a scenario where national or local economic policies are influenced or dictated by the needs and demands of these zones, reducing the autonomy of public institutions in shaping economic strategies that should serve broader public interests.

In summary, while SEZs and Freeports aim to spur economic development, the potential downsides include significant losses in public autonomy over economic, environmental, and social governance, with concerns about transparency, equity, and democratic control being paramount.

David Powell January 2025