The Freeport Illusion: Are We Sacrificing Public Wealth for Private Gain?
Scotland’s Green Freeports are marketed as powerful tools for driving economic growth, attracting international business, and creating jobs. But beneath the promises, are these zones simply enriching the wealthy at the public’s expense? With significant taxpayer money being funnelled into these areas, it’s time we ask: Is this really the best use of public funds, or could that money be better spent on public services like healthcare and education?
The UK and Scottish governments have committed ￡52 million to Scotland’s two Green Freeports: the Forth Green Freeport and the Inverness and Cromarty Firth Green Freeport. However, these funds are just the tip of the iceberg. The additional costs for infrastructure projects—such as roads, utilities, and port expansions—could push the public's investment up by an estimated ￡10-20 million per project. But who is benefiting from these investments? The evidence suggests it’s not the general public.
Meanwhile, NHS Scotland is facing a workforce crisis with over 6,200 nursing and midwifery vacancies, a 38% increase from the previous year. Even with the ￡568 million allocated to boost NHS staff pay, these shortages persist(HealthAndCare). What if a portion of the Freeport funding had been redirected toward easing this strain on public healthcare? The benefits would have been immediate and widespread.
Who Wins from Freeports? Not the Public
It’s clear who the big winners are—large corporations, wealthy landowners, and private investors. The House of Commons Library reports that land values skyrocket in Freeport zones, directly benefiting landowners while local residents face rising living costs. The tax breaks offered to businesses—covering customs duties, National Insurance relief, and capital allowances—mean that hundreds of millions of pounds in public revenue could be lost. This is money that could have been used to fund vital public services like schools, hospitals, and social care.
Even worse, a Centre for Cities report found that many jobs attributed to Freeports are simply relocated from other regions, resulting in no net job creation. So, what’s the real outcome? Public funds are used to offer tax holidays to corporations, with little tangible benefit for Scottish citizens.
A Real Solution: Annual Ground Rent (AGR)
What if there was a better way to fund Scotland’s public services without burdening workers or driving up the cost of living? That’s where Annual Ground Rent (AGR) comes in.
AGR, also known as Land Value Tax (LVT), shifts the burden of taxation away from workers and consumers and onto landowners—those who benefit most from rising land values. Here’s the key point: land becomes more valuable because of public investments and community growth, like the building of new roads, schools, or hospitals. Yet, the financial gains from this increased value flow almost entirely to landowners, not to the public that helped create it.
AGR ensures that the value created by land goes back to the public, funding the services that make land more valuable in the first place.
How Much Could AGR Raise?
The Scottish Land Revenue Group (SLRG) estimates that AGR could raise ￡2 billion per year in Scotland—revenue that could fund public services like healthcare, housing, and education. This figure could replace multiple traditional taxes, like income tax and VAT, which disproportionately affect lower- and middle-income households.
Over time, as land values rise, AGR could eventually replace most traditional taxes, making the system fairer and more efficient. By focusing taxation on landowners, AGR ensures that those who benefit the most from public investments pay their fair share.
AGR in Action: How It Works
Imagine owning land that becomes more valuable because a new hospital or school is built nearby. You didn’t do anything to increase its value, yet you profit immensely from it. AGR would tax this increase in land value, and the revenue would go directly into funding the very public services that made the land more valuable in the first place.
By doing so, AGR could replace outdated taxes that hit working people hardest, like income tax and VAT, and ensure a more equitable distribution of wealth.
Freeports vs. AGR: Who Really Benefits?
Freeports offer a temporary boost to businesses, but at what cost to the public? Taxpayer money is being funnelled into private hands, while vital public services like healthcare are underfunded. Annual Ground Rent (AGR), by contrast, offers a fair and sustainable solution, ensuring that the benefits of land and community growth are shared by all, not just a wealthy few.
Call to Action
Think about the Scotland we want to build—one where public investments benefit everyone. To learn more about how Annual Ground Rent (AGR) can ensure that public money is used to benefit everyone, visit the Scottish Land Revenue Group (SLRG) or Annual Ground Rent Scotland.
Written with the assistance of ChatGPT.