The Challenge of Freeports in Britain: The Promise of 11,000 Jobs in the Post-Brexit Era

FTZ News: Britain’s freeports were something more than merely an economic tool from the very beginning. These zones became one of the main arenas of tension between London and Edinburgh, and debate over them continues to this day in the House of Commons and among Scottish experts. The original idea was put forward by Boris Johnson’s government as part of the “leveling up” program, and since then, few have been able to provide a definitive assessment of its effectiveness.

An official British government announcement in September 2025 stated that the agreement for the Inverness and Cromarty Firth Green Freeport had been signed. According to that same announcement, £25 million in initial funding had been released, and more than 11,000 long-term jobs are expected to be created. The area is intended to become a hub for renewable energy. But when these figures are considered alongside the history of similar zones in Britain and Europe, they raise serious questions for which there are no clear answers.

This policy took shape in the early years following Brexit. The British government at the time viewed freeports as a way to offset the new trade restrictions and revive declining industrial areas. Eight zones were initially announced in England, and then it was Scotland’s turn. The Scottish government initially resisted and proposed its own model under the name “Greenport,” a model that emphasized a real living wage, a commitment to net zero, and fair work principles. After months of negotiations, the two sides agreed on two zones: one around the Firth of Forth and the other in the Highlands. That compromise created a deep rift between the Scottish National Party and its Green partners. The Greens regarded these zones as nothing more than “greenwashing” and warned that they would not have any meaningful difference from the English model.

Now that one of these two zones is approaching implementation, the main question remains: Do freeports create new economic activity, or do they mostly move businesses from one place to another? Reports by the Institute for Fiscal Studies and reviews by parliamentary committees have repeatedly shown that a significant share of the jobs announced in such zones are actually relocations from elsewhere in the country. Given the relatively low level of British tariffs after Brexit, the customs advantages of these zones appear limited. What remains are tax exemptions and investment incentives that can attract companies, but the cost of this attraction for the Treasury and for areas that lose investment remains unclear.

Another concern has existed from the beginning and is still being raised in Parliament: the possibility that these zones could become a haven for tax evasion or suspicious financial activity. Some lawmakers have also raised this concern in conversations with the media. The experience of freeports in Europe has shown that a lack of sufficient transparency regarding the ultimate ownership of companies and stored goods can create opportunities for money laundering. The British government emphasizes that its freeports have moved away from luxury art-storage models and are subject to anti-money-laundering oversight. Nevertheless, opposition lawmakers and a number of oversight bodies continue to call for public registration of beneficial ownership and more detailed reporting. In Scotland, this issue has become intertwined with the debate over workers’ rights. The Scottish government emphasizes fair-work charters, but its ability to enforce them appears limited in the face of employment laws that are controlled by Westminster.

The focus on offshore wind energy in the Highlands Freeport makes geographic sense. Scotland is well positioned for this industry, and there is also a perceived need to develop a domestic supply chain. Investments such as the submarine cable factory at the Port of Nigg indicate that some foreign companies have taken an interest in the area. Nevertheless, the ultimate success depends on several factors: the ability to attract investment from outside the Western sphere amid sweeping sanctions against Russia, the speed at which European suppliers are replaced, and the durability of environmental commitments in the face of short-term profitability pressures.
Britain’s experience with special economic zones over the past several decades has produced limited results. The enterprise zones of the 1980s and 1990s often failed to bring about structural transformation and instead mostly resulted in the relocation of low-skilled jobs. Today’s freeports, with their focus on advanced industries and green requirements, appear different, at least on paper. But being different on paper is not enough. A real assessment will probably become possible by 2027 or 2028, when concrete data on net investment, additional employment, and the impact on neighboring areas becomes available.

Britain’s freeports are less a magic solution for regional growth than a reflection of the effects of industrial policy in the post-Brexit era. Governments want to attract investment, revive disadvantaged areas, meet climate commitments, and contain financial risks at the same time. Achieving all of these goals simultaneously may be somewhat difficult. Economic history shows that without genuine transparency in ownership and close oversight, even programs presented under a green label may drift away from their stated course./.