The UK government is proposing a series of ten freeports across the country. Freeports are areas, not necessarily connected to actual ports, in which business activity can take place free from the normal tax and regulations that apply in the rest of the country. The intention is that they encourage business development in those areas.
However, we think freeports are a bad idea. They create an uneven playing field between businesses that can move to the freeport zone and those that can't, and international experience has shown that they are notorious as being havens of criminal activity and money laundering.
The European Parliament produced a highly critical report of the Luxembourg example commenting that, 'Free ports are conducive to secrecy. In their preferential treatment, they resemble offshore financial centres, offering both high security and discretion and allowing transactions to be made without attracting the attention of regulators and direct tax authorities.' The Financial Action Task Force went further saying that they can be 'misused for money laundering and terrorist financing'.
Moreover, there is scant evidence that they do actually create a significant number of good jobs; they seem to just shift jobs from one area to another.
There is currently a government consultation taking place and CATJ has responded to it. You can read our consultation response here
Dr Justin Thacker is the National Coordinator for Church Action for Tax Justice