Sinn Fein and the SDLP have blocked a council investigation into Belfast becoming a Freeport with warnings it could turn the city into “Douglas on the Lagan”.
For the meantime, the two parties have ended exploratory work by Belfast City Council officers looking into the potential benefits of Freeport status.
At Belfast council’s City Growth and Regeneration Committee this week, six councillors from Sinn Fein and the SDLP voted against further work on Freeports, to five councillors from the DUP and Alliance who wanted council work to continue.
However, the decision could be overturned at full council level in June if the unionist parties and Alliance block vote against it.
Freeports create economic zones with tax concessions and exemptions from customs and excise duties within a port boundary. From 1984 until 2012 the UK operated a number of Freeports, and one remains in the Isle of Man.
So far eight new freeports have been set up in England, two are intended for Scotland, now termed “Green Freeports”, while plans for Wales and Northern Ireland are still being developed. They are set up at a competitive level with locations competing against one another. Northern Ireland would see potential for one new Freeport.
Research so far here has identified two potential sites that could form part of the NI Economic Zone, Belfast Harbour and Foyle Port, but other locations such as Larne and Warrenpoint Ports and the International Airport will have to come in the mix at a later stage of the process.
At the council committee SDLP councillor Brian Heading told the chamber: “What we may end up getting through the back door is Singapore, where there would be deregulation. And we would firstly be dealing with importing, not necessarily exporting.
“There could be a move there for employers to say, ‘Well we are a Freeport, so we will decide what wages we pay, decide what legislation we are going to abide by, simply because we have that special status’.”
He said there were “certain standards the council had to maintain to be part of this project.”
A council officer said: “At this stage we do not have a prospectus for a Northern Ireland Freeport. The initial work recognises due to the scale of the region, that any such offering would need to be different. And with the situation regarding the devolved administration we would need to engage with the Treasury to shape a potential prospectus to avoid issues of displacement.”
He added: “We recognise for many of you this is a sensitive issue. We would not propose at this stage to use levers such as customs inversion etcetera. We simply want to work with partners to explore if there is a benefit which may come from any future prospectus. And also to shape any suggestions with the Treasury to a bespoke offering in Northern Ireland.”
He said: “There is no potential application or submission at this stage, this work is merely exploratory, there is actually no formal avenue to submit something.”
Sinn Fein councillor Ronan McLaughlin said: “We have huge fundamental problems with the issue of Freeports. Not only in terms of ideology but in terms of deliverability.” He said Freeports were “theoretically just a tax haven.”
He added: “The Scottish government has decided to do some clever PR and call them Greenports, and hand in some zero carbon ambitions and targets, but fundamentally it is about tax exemption, and lower tax rates.
“As a party we don’t believe that is going to create sustainable economic growth. Councillor Heading talks about Singapore. The Isle of Man is exactly the same. If London is Singapore on the Thames then we would have Douglas on the Lagan.
“And then we come to the protocol — the EU rules might not allow any exchanges the UK Government wants to bring in which would sustain that economic development.”
DUP Alderman George Dorrian said: “It is disappointing to hear this, when what we would be doing is exploratory work to try and identify things that could benefit the city. It is disappointing we would rule this out at such an early stage.
“There are always issues that wouldn’t sit well with us here, and that is why we would work to adapt something to Northern Ireland.”
A council report paints the Freeports in a positive light, stating: “Tax incentives under Freeports will increase the attractiveness of the area for the private sector. Drawing in such investment has the potential to encourage new collaborations that benefit centres created through City Deal Investments.”