Westminster’s obsession with Freeports highlights the sickness in our body politic

Liverpool: freeport of the future? Image: Getty.

There is a deep sickness in Westminster that, as we approach Brexit, infects everything. It extends beyond our ludicrous politicians, outwards into the nexus of ideas shared and valorised by politicians, think tanks and lobbyists that grease the wheels of the legislative machine, and threatens every interstice of our national life.

Nowhere is the sickness more evident than in Westminster’s current fetishisation of “Freeports”. This policy wheeze is virtually guaranteed to do none of the things its supporters claim, while causing incalculable harm. And yet it is currently championed by breathless politicians on all sides who are so blinded by events that they apparently can know no better.

Freeports are, essentially, seaside local low tax zones. Goods in freeports are considered to be “in transit”, so do not attract regular import and export duties. This, its champions suggest, brings vital support to a local area’s manufacturing industries, which results in activity, jobs and inward investment.

We are not short of examples; some 3,000 such free trade zones exist worldwide. Most house manufacturers who avoid tax on imported raw materials before exporting finished products. They are also exploited by some of the most shameless spivs in the international art market. Collectors and fencers of Picassos and Hockneys avoiding taxes on purchases by warehousing culture and stockpiling heritage. The Economist suggests that “hundreds of billions of dollars” of goods are stored in such to avoid tax. The famous Geneva freeport in particular is a hive of the lurid and the crass, the unequal and the downright criminal. As a vision for our localities this is bad enough, the closest thing to Tony Blair’s disastrous supercasino plan, which assumed that the way to build our regions is to turn local people into factotums for the feckless and the sozzled.

But a cursory glance at the material shows that the purported benefits of Freeports are based on the most tendentious of data. The right wing Centre for Policy Studies, in a report headed up by the Conservative party’s Rishi Sunak MP, claim that by creating freeport areas in our major port cities in the north we can create 86,000 extra jobs. MACE, a construction consultancy, goes even higher, estimating an enormous 150,000 high value (with an income of more than £60,000) jobs from an extra £12bn a year in revenue to the UK Economy. Policy North, another right wing think tank, estimated that the creation of a necklace of Northern freeports will see 612,000 jobs and £12bn of investment.

Such estimates are farcical. Policy North references numbers from a study by a McMaster University study, which make it clear that it has no evidence to suggest that any of the jobs in question were created by the Freeport. Indeed this report in turn references a study by the International Trade Commission that “determined that FTZs [Free Trade Zones] were having a small overall effect on U.S. revenue collection, employment and the economy in general”.

The Centre for Policy Studies’ analysis fares no better: Sunak’s report is cocktail napkin mathematics. He produces his figure of 86,000 jobs by simply dividing the number of jobs in FTZs in America by the size of the national workforce, and multiplying it by the size of the relevant workforce.

Simultaneously, a report recently published by the World Bank was scathing about the potential of Freeports to improve lives or livelihoods. First, it suggested, Freeports do not catalyse economic development. In fact, on average, most zones’ performance only resembles the national average. Secondly, growth in Freeport areas happens early on in the life of the Freeport. After an initial boost, the economic performance of these zones evens out to that of their surrounding area. Thirdly, the economic spillover from whatever benefits there may be – unconvincing as they are – from freeports only appears to affect the immediate vicinity. “The effect declines sharply beyond 20km and is barely evident beyond 50km from the center of the zone.” Witness Delaware in the United State, which opened a freeport in 2015. The unemployment rate has indeed decreased but only at the national rate since opening. Further, unemployment in Delaware has remained consistently above the national average.

There is an appropriate worry that Freeports are not conducive to quality jobs; that what is on offer to many are low security, low wage, low job quality roles. The World Bank in another report on free trade zones highlight that “union rights have been legally constrained or de facto discouraged [in FTZs]”. The International Labour Organization pulls a similar line from their report, that, “The generous incentives and low costs to entry attracts simple processing industries to invest in the zones; such companies often lack professional management, particularly in human resources and management”.


Professor John Tomaney of University College London is an outspoken critic: “Freeports have become an article of faith for some advocates of “Global Britain”. But the evidence that they would contribute to economic development in northern England is very far from convincing. Experience from elsewhere in the world is that they provide many advantages to firms and their shareholders, but far fewer to local workers and taxpayers. In many parts of the world they have been used as cover to drive down labour standards and reduce environmental protections.”

Supporters of freeports claim both precedent and huge public support. Conservative right wingers find themselves in rare alliance on the matter with centre-grounders like former chief advisor to the Prime Minister, Nick Timothy, who suggested that Freeports should be a limb of the free trade alternative to her Brexit deal. They also point to a recent poll done by Survation which shows 83 per cent of British People support freeports. Once again, the quality of that poll calls into account the self-awareness or bona fides of those quoting it. Freeports were specifically claimed to “encourage domestic manufacturing, increased international trade and job creation”. This, as we have seen, is far from proven. At the very least we must debate the countervailing views.

It is a sign of our desperate and ailing times that such an intellectually and ethically troubling idea, presented in such a ham-fisted way, can achieve almost mythical powers of national healing and restoration quite so quickly. It is worth noting that the above is not some academic discussion; the Treasury in October under the direction of Robert Jenrick MP, initiated a consultation into establishing Freeports across the North. Perhaps we should not be surprised that, in a time of ubiquitous division, anything that on the face of it brings together left and right, social justice warrior and free market fanatic, is seized upon, as a rare, magical object of consensus. The reality is, though, that we are wise to this. Just because those in power agree something is a good idea for the rest of us, it doesn’t make it so: the opposite in fact may well be true. The dignity of our people, for the men with pens, often seems to be expendable.

There are alternatives to this dystopia. Economic models based, not on inwards investment, but building local assets, investing in local institutions, creating local employee owned movements. The inward investment model has a rival in the community wealth movements that find expression in places like Preston and in the work in Chicago of Ted Howard and others and that form a real model of local ownership and hope: an economics of belonging, that if applied might get us out of this mess. But the freeport model and it associated degradation and corruption is where Westminster is at right now. What cure can suffice when the rot runs this deep?

Asheem Singh is the director of economics at the Royal Society for the encouragement of Arts, Manufactures and Commerce. He was assisted in researching this article by Toby Murray.

 
 
 
 

In South Africa's cities, evictions are happening despite a national ban

An aerial view shows a destroyed house in Lawley, south of Johannesburg, on April 20, 2020. The city has been demolishing informal structures on vacant land despite a moratorium on evictions. (Marco Longari/AFP via Getty Images)

On the morning of 15 July, a South African High Court judge ruled that the city of Cape Town’s Anti-Land Invasion Unit had illegally evicted a man when it destroyed the shack where he was living.

That afternoon, the Anti-Land Invasion Unit was out again, removing shacks in another informal settlement.

Evictions were banned in South Africa for nine weeks, after the national government placed the country under a strict Covid-19 lockdown in late March. At present, eviction orders are automatically suspended until the country moves to a lower “alert level” and can only be carried out with a special order from a judge.

Yet major cities including Cape Town, Johannesburg and eThekwini (created through the merger of Durban with several surrounding communities), have continued to use municipal law enforcement agencies and private security companies to remove people from informal housing. In many cases those operations have been conducted without a court order – something required under regular South African law.

Around 900 people were evicted from three informal settlements in eThekwini during the eviction ban, according to the Church Land Programme, a local NGO. Its director, Graham Philpott, says it’s also aware of evictions in other informal settlements.

While evictions aren’t a “new experience” in these communities, the NGO released a report on lockdown evictions because they were “so explicitly illegal”. “There was a moratorium in place,” Philpott says, “and the local municipality acted quite flagrantly against it. There’s no confusion, there’s no doubt whatsoever, it is illegal. But it is part of a trend where the eThekwini municipality has acted illegally in evicting the poor from informal settlements.”

Evictions also took place in Cape Town and Johannesburg during so-called “hard lockdown” according to local activists. In eThekwini and other municipalities, the evictions have continued despite restrictions. In Cape Town, authorities pulled a naked man, Bulelani Qholani, from his shack. That incident, which was captured on video, drew condemnation from the national government and four members of the Anti-Land Invasion unit were suspended. 


The cities say they’re fighting “land invasions” – illegal occupations without permission from the land owner.

“Land invasions derail housing and service projects, lead to the pollution of waterways, severely prejudice deserving housing beneficiaries and cause property owners to lose their investments over night,” Cape Town’s executive mayor, Dan Plato said in a statement. (Plato has also claimed that Qholani did not live in the shack he was pulled from and that he disrobed when municipal authorities arrived.)

South African municipalities often claim that the shacks they destroy are unoccupied. 

If they were occupied, says Msawakhe Mayisela, a spokesman for the eThekwini municipality, the city would get a court order before conducting an eviction. “Everything we’re doing is within the ambit of the law,” Mayisela says. But “rogue elements” are taking advantage of Covid-19, he added.

“We fully understand that people are desperately in need of land, but the number of people that are flocking to the cities is too much, the city won’t be able to provide housing or accommodation for everyone overnight,” he says. 

While eThekwini claims to be a caring city, local activists say the evictions show otherwise.

In one case, 29 women were evicted from shacks during the hard lockdown. With nowhere to go, they slept in an open field and were arrested by the South African Police Service for violating the lockdown, Philpott says.

“These evictions are dehumanizing people whose dignity is already compromised in many ways,” says S’bu Zikode, the president of Abahlali baseMjondolo, a community organization whose Zulu name translates to “the people of the shacks”. 

“It has reminded us that we are the people that do not count in our society.”

Municipal law enforcement and private security contractors hired by cities regularly fire rubber bullets, or even live ammunition, at residents during evictions. Some 18 Abahlali baseMjondolo activists have been killed since the organization was founded in 2005, Zikode says, most by the eThekwini Land Invasion Unit and Metro Police.

(Mayisela says that if city employees have broken the law, Abahlali baseMjondolo can file a complaint with the police. “There is no conclusive evidence to the effect that our members have killed them,”  he says.)

Other Abahlali baseMjondolo activists have been killed by what Zikode calls “izinkabi,” hitmen hired by politicians. Two eThekwini city councillors were sentenced to life in prison 2016 after they organized the killing of Thuli Ndlovu, an Abahlali baseMjondolo organizer. A member of the Land Invasion Unit who is currently facing a charge of attempted murder after severely injuring a person during an eviction remains on the job, Zikode says.

South Africa’s 1996 constitution is intended to protect the public from arbitrary state violence and guarantees a right to housing, as well as due process in evictions. But for Zikode, the South African constitution is a “beautiful document on a shelf”.

“For the working class and the poor, it’s still difficult to have access to court. You’ve got to have money to get to court,” he says. 

The actions by municipal law enforcement are breaking down social trust, says Buhle Booi, a member of the Khayelitsha Community Action Network, a community group in the largest township in Cape Town.

“There’s a lack of police resources and those very few police resources that they have, they use to destroy people’s homes, to destroy people’s peace, rather than fighting crime, real criminal elements that we see in our society,” Booi says.

For him, it’s a continuation of the practices of the colonial and apartheid governments, pushing poor people, most of whom are Black, to the periphery of cities.

Around one-fifth of South Africa’s urban population live in shacks or informal dwellings, according to a 2018 report by SERI. Many more live in substandard housing. City governments maintain that the shacks destroyed during anti-land invasion operations are unfinished and unoccupied. But Edward Molopi, a research and advocacy officer at SERI, says that this claim is an attempt to escape their legal obligations to get a court order and to find alternative accommodation for affected people. 

The roots of the current eviction crisis go back to apartheid, which barred non-white people from living in cities. Between the 1940s and 1970s, tens of thousands of people were forcibly relocated from neighbourhoods like Johannesburg’s Sophiatown and Cape Town’s District Six to remote townships.

In the 26 years following the end of apartheid, deepening economic inequality and rampant unemployment have limited access to formal housing for millions of South Africans. Government housing programs have mostly focused on building small stand-alone homes, often on the peripheries of cities far from jobs and amenities.

While these well-intentioned projects have built millions of homes, they’ve failed to keep up with demand, says Marie Huchzermeyer, a professor at the Centre for Urbanism & Built Environment Studies at the University of the Witwatersrand in Johannesburg. Government-funded housing projects “will never on it’s own be enough,” she says. “It has to be accompanied by land release.”

Government policies call for the “upgrading” of informal settlements and the formalization of residents’ occupation. But “there are still very, very, very few projects” of that nature in South Africa, Huchzermeyer says. “Even if it’s an informal settlement that’s been around for 20 years, there still seems to be a political wish to punish people for having done that.” The government wants people to go through the formal process of being given a house, she says – and for them to be thankful to the government for providing it.

At the municipal level, change will require “real leadership around informal settlement upgrading and around ensuring that land is available for people to occupy,” she says. 

Despite the end of enforced racial segregation, spacial apartheid remains a factor in South Africa. There are few mixed-income neighbourhoods. Those who can afford to often live behind walls in sprawling low-density suburbs, while the poor live in overcrowded slums and apartment buildings.

The creation of the apartheid city “didn't happen by chance,” says Amira Osman, a professor of architecture at the Tshwane University of Technology. “It was a deliberate, structured approach to the design of the city. We need a deliberate, structured approach that will undo that.”

Since last fall, Johannesburg’s Inclusionary Housing Policy has required developments of 20 or more units to set aside 30% of those units for low-income housing.

The policy, which faced significant opposition from private developers, won’t lead to dramatic change, says Sarah Charlton, a professor at the Centre for Urbanism and Built Environment Studies, but it is “an important and significant step.”

Zikode isn’t optimistic that change will come for shack dwellers, however.

“People in the high positions of authority pretend that everything is normal,” he says. “They pretend that everyone is treated justly, they pretend that everyone has homes with running water, that everyone has a piece of land – and hide the truth and the lies of our democracy.”

Jacob Serebrin is a freelance journalist currently based in Johannesburg. Follow him on Twitter.