As Britain embarks on extricating itself from the EU’s economic institutions after Brexit, and takes up the mantle of championing free trade, it is important the Government recognises the national assets it has at its disposal. Crafting a ‘Global Britain’ is a truly exciting ambition, and one wholeheartedly supported by most Brexiteers. As such, it is vital Prime Minister Theresa May – and her Cabinet – are not afraid to pursue policies which mark a distinct break from the status quo. Cutting ourselves free from the EU must not simply mean the UK Government continues policies previously sanctioned in Brussels.
Reforming our port system represents one vital way in which British international trade can be injected with dynamism. The capabilities are there for all to see. Our vast coastlines are scattered with countless seaports from Glasgow to Southampton, dealing with 95% of our imports and exports. This is an industry which provides employment for tens of thousands of people.
However, more can – and must – be done to harness the true potential of Britain’s coastal gateways. Leaving the EU will enable the introduction of ‘Freeports’ to take place – a concept which designates specific areas as exempt from customs duties and tariffs. This would make ports more attractive for exporters. This is an idea which could enable Britain to act as a middle man between Europe and the rest of the world – with unfinished goods being delivered to the UK port, turned into higher value products, and then shipped onwards to their final destination.
The climate this would nurture, with reduced administrative hurdles and lower import charges, means goods which would otherwise go elsewhere, are drawn to Britain. Estimates predict up to 100,000 jobs could be created by such a move – caused by an explosion of manufacturing opportunities. Freeports would stand Britain in good stead to become the lynchpin of global commerce, enabling us to tap into flows of trade to which we would otherwise not have been party.
As it stands, our current membership of the EU has categorically prevented the development of such zones. Tight rules on state aid block the Government from taking measures to improve the competitiveness of the UK economy. This is coupled with an inexcusably confusing customs code, which saddles any such endeavours with senseless hindrances and binds Britain’s hands.
These rules are infuriating to many in the industry who appreciate the true potential of Britain’s ports, and see them for the national asset they really are. The CEO of Associated British Ports, James Cooper, has said: “Ports and maritime represent a major global opportunity for the UK economy; an opportunity for Britain to increase its trade with countries throughout the world.”
With over 50% of UK exports going to countries outside the EU, our port system should be capable of dealing with these flows of trade. However, the EU Commission drowns Britain’s small, yet plentiful ports with cascades of ill-fitting regulation which, whilst suitable for the larger, less-numerous ports on the Continent, serve only to stifle those in Britain.
The Port Services Regulation is one such example. Designed to regulate the less commercial ports on the Continent, this piece of legislation has deterred investment in the UK, and could see less money being spent on major infrastructure – such as cranes. Indeed, the UK Major Ports Group was vehemently opposed to this move and argued “a one size fits all approach regulation at the EU level will not work” – yet, as usual, British concerns fell on deaf ears.
The port of Liverpool is just one British example which could be adversely affected. The ownership group Peel Ports have recently invested £300 million to transform the city’s harbour into a deep-water terminal – one capable of receiving larger ships. This would allow it to compete with its southern rivals, in attracting huge container vessels and thus bring greater prosperity to the region. However, remaining within the orbit of EU rules would see greater costs inflicted onto the company, and greater bureaucratic hurdles to jump over. Mark Whitworth, the CEO of the group, has said “Brexit genuinely gives us some opportunities” and is pleased “the EU directive which was coming our way will fall away”.
The ‘Rotterdam effect’ – which artificially inflates statistics on Britain’s exports to the EU – is a symptom of this problem. With our harbours unable to fully flourish whilst we are in the EU, necessity dictates our global exports are first sent to the large ports of Netherlands and Belgium, before onwards to their final destination. This gives the false impression of the UK having a greater weight of trade with the EU than it actually does, and simultaneously boosts the quantity of exports leaving from the EU27 – adding an undeserved gleam to their statistics. Outside the EU, and able to pursue policies which are in Britain’s interests, this bizarre quirk of international trade can be addressed.
The Referendum result was an instruction to the Government to Get Britain Out of the EU, its economic institutions, and to strike a global future for this country. Rejuvenating our port system is an instrumental way through which this can be done.
Robert Bates is a Senior Research Executive at grassroots, cross-party campaign Get Britain Out