Can a Freeport “level up” the Welsh Island of Anglesey?

The Conservative Party’s flagship policy of ‘leveling up’ regional economies in the UK takes two forms on the island of Anglesey.

First, a £22.5mn program to make cosmetic improvements in the crumbling fabric that is Holyhead. Local government leaders are hoping that a new freeport will restore Anglesey’s fortunes following two decades of factory closings, which left an aging population in low-skilled work.

The chief executive of Anglesey Council, Dylan Williams, said: “We don’t have enough jobs to sustain our community.” He hopes that Holyhead’s freeport status, which will be granted in March 2023, will attract investment to reverse Anglesey’s decline.

Over the last 25 years, the island’s economy slowly deindustrialised. Anglesey’s aluminium factory was closed in 2009, and six years later the Wylfa Nuclear Power Station that powered its smelters. Holyhead Port is the only major employer in Anglesey. The last single employer, a chicken-processing factory, closed its doors last March and 730 jobs were lost.

Williams said that time is running out from a socioeconomic perspective for Anglesey. He added that new jobs were vital in retaining youth and preserving Welsh on the island. This is why freeports and leveling up are so important. To change the current direction, we need to do something truly transformational.

Anglesey Freeport was one of twelve announced by the Government since 2021. Eight were in England, and two in Wales and Scotland.

Boris Johnson touted the ports as a “Brexit booster” during the 2019 campaign. Prime Minister Rishi Sunak also backed the idea, writing a document entitled The Free Ports Opportunity in 2016.

Investors get a package of 10-year tax breaks for new buildings and machines, simplified customs procedures, tariff-free imports and exemptions from contributions to national insurance.

Each freeport has a distinct focus. Humberside will, for instance, focus on the refining of rare earth metals, which are used in the green-energy industry. Plymouth, on the other hand, will focus on marine technologies, such as submarines and sea robots.

Anglesey’s pitch focuses on the nascent industry of green energy, which can access the national grid through the connection that was used by the Wylfa power plant.

Many schemes are still in the process of being fully implemented, so it is too early to estimate the total contribution to the economy that the Freeports Plan will have.

In November 2023, the Department for Levelling Up, Housing and Communities said that freeports created 6,500 jobs and generated £2.9bn of investment. This is a fraction compared to the collective 82,600 promised jobs by the eight English Freeports over the course of their lives.

The overall value of the schemes has been questioned by economists. In a assessment for 2021, the Office for Budget Responsibility (UK spending watchdog) warned that their economic benefits would likely be so small, they’d be “difficult even to discern in retrospect”.

Michael Gove is the Levelling Up Secretary who is responsible for delivering the Strategy. He told the MPs that in January, the OBR analysis had missed the true point of the Plan, which was a regional industrial strategy.

He said that the ports are designed to create the “alchemy of economic development” by bringing the public and the private sectors together. “That’s the goal and intention behind them.”

The Anglesey freeport will be a joint venture between the local council and Stena Line is the Swedish company that owns and operates Holyhead Port, which is the primary ferry route between the UK, Northern Ireland, and Sweden.

Ian Davies, Stena’s UK port head, stated that the Brexit has permanently reduced traffic volumes in Holyhead. He hopes to attract green investments and create a new logistic hub as a result of this.

According to the port’s business plan, the long-term objective is to create between 3,500-13,000 new jobs through the creation of a hub that will serve the existing solar and tidal power industries on Anglesey.

One of these projects is a £30mn project in Morlais that will use underwater turbines to generate electricity on a 35 sqkm patch of seabed.

Three of the first four power cables are already installed. A substation will be built to deliver electricity via the original connection installed at the old aluminum factory.

The Conservatives won the 2019 election on a promise to reduce long-standing inequalities between regions. This is the first of a series which explores the impact and future of ‘levelling-up’ as the next general elections approach.

The ultimate goal is to have the tidal industry and the solar industry manufacture and service products within the freeport zones, using grid connections and port infrastructure.

“We see ourselves enabling. “We want to attract companies with long-term goals, not grant-chasers. We see this as the beginning of a journey back to Anglesey to bring those high-value manufacturing job to Anglesey,” Davies stated.

The ability to provide skilled workers is a vital part of the plan. This is especially true for the green industries located within the zone, and for any new power stations that may be built at Wylfa. This is something the government is looking into as part of its recently announced “nuclear revitalization” plan. These hopes were boosted when Great British Nuclear (the government’s nuclear development arm) purchased the Wylfa site in March.

For the moment, the focus is on developing Anglesey into an “Energy Island”, whether or not it has a nuclear power plant.

Coleg Menai is Anglesey’s further education school. It has luxurious facilities partly because of the legacy left by the old nuclear site. The college is being used to lure investors by guaranteeing skilled workers for the tax-free zone.

Aled Jones Griffith, principal of the college, said, “It is about offering a total package, not just engineers and Stem graduates but also the foundational economic, catering, hospitality and hair and beauty that would support the new green economy.”

Williams, chief executive of the council, stated that the goal is to bring a wide range of jobs back to Anglesey. Williams said over one-third commutes off the Island each day. Williams, the council chief executive, said that Anglesey’s ambition is to restore a broad range of jobs.

There are signs that the Anglesey Freeport is generating interest on the island. It may take a decade to see if the freeport achieves its initial aspirations.

M-SParc is adding a second building to its innovation cluster, which has 50 resident companies. This was partly driven by the interest in the Freeport.

Pryderi Ap Rhisiart is the managing director of M-SParc. He said that some investors would come without the freeport but the process would be slower. The freeport tax breaks will make a difference. That’s what we hear from UK and international companies.

The freeport offers hope to those who have seen Anglesey decline inexorably over the last two decades.

John Idris Jones was an engineer in the nuclear power plant. His project will plug in clean tidal power into an existing grid connection built for an old dirty industry. He said that the project had a “pleasing circularity” to it.

Anglesey’s green energy revival cannot come soon enough in the Cosy Corner Cafe, located in Llangefni’s administrative center, where 2 Sisters, a chicken processing plant, closed its doors a year earlier.

The cafe owners Aysh Tas and Murat tas have seen their business decline as factory workers are no longer coming for breakfast.

Aysh added, “You’ll also notice that there are fewer young people in town. This is why shops are closing.” “The summer months are good for tourists but you cannot live off of six months worth of good business.”

A group of former Anglesey teachers gathered for coffee at one of the cafe tables said that they’d seen too many false dawns in Anglesey, as promises of regeneration had come and gone.

They hope that the freeport is different. Nia, a retired teacher, said, “This place is beautiful, but beauty can’t sustain you.” “The children need jobs.” They need to get a job.