The government’s decision to approve DP World’s involvement in the Thames Freeport project has drawn criticism after P&O Ferries, which is owned by the firm, sacked 800 workers last year.
The freeport, based in Essex, is part of Rishi Sunak’s freeports plan and will be run by a partnership between DP World, carmaker Ford, and Forth Ports. The project is set to receive £25m in government funding, with the aim of attracting £4.6bn more in public and private investment.
The Trades Union Congress (TUC) described the decision as “appalling”, as it could enable other employers “to act with impunity”.
P&O Ferries sacked all its crew members in March 2022, replacing them with foreign agency workers who were paid less than the minimum wage. The move sparked outrage at the time and the government responded with a pledge to change the law to prevent companies from firing staff on the spot. A year on and they have failed to do so.
There were also calls for P&O’s boss, Peter Hebblethwaite, to resign. He later admitted to MPs that the decision had broken employment law, and the government called the workers’ treatment “wholly unacceptable”.
Paul Nowak, general secretary of the TUC, said ministers should have stripped P&O Ferries of all its public contracts and commercial ties, but the government has instead rewarded DP World with another deal. Nowak says, “The government shouldn’t be rewarding companies who behave like corporate gangsters. Awarding DP World another bumper contract is an appalling decision. It sends a green light to other rogue employers to behave with impunity”.
Following heavy public pressure, the government announced last April that DP World would no longer be a formal partner in the Solent Freeport consortium. However, now the furore has died down, the government has approved plans for DP World and its partners to run the Thames Freeport instead.
The government claims freeports create economic activity, such as trade, investment and jobs near shipping ports or airports. Two freeports have now been given the go-ahead in the east of England – the other, Freeport East, is centred on the ports of Felixstowe and Harwich. They join six elsewhere in the country, with more in the pipeline.
Thames Freeport across three sites
The Thames Freeport will be made up of three sites: the London Gateway in Thurrock, the Port of Tilbury near Southend-on-Sea, and Ford’s Dagenham car plant.
According to a spokesperson for Thames Freeport, DP World and its partners have invested heavily in port and logistics infrastructure over the past decade, and the new port will benefit the “levelling up of the region”, with claims it will create more than 21,000 direct and indirect jobs.
Thames Freeport tax incentives
The government has said that the project will lead to much-needed investment in the area, with local authorities administering the government funding “to benefit the entire region”. The freeport will receive “potentially hundreds of millions in locally-retained business rates”. In addition, it can expect Stamp Duty Land Tax relief, enhanced capital allowances for investment in plant and machinery, and structures and buildings, five years of business rates relief, employer national insurance contributions relief, deferrals and exemptions from duty and a “supportive” local planning environment.
The P&O sackings isn’t the only controversial news story concerning DP World. Last July The Times reported the company, owned by the Dubai royal family, had been accused of dodging tax by understating the value of the land it had bought for the London Gateway port in Thurrock, now part of the Thames Freeport. The case has been referred to a land tribunal for a final verdict.
Freeports – a “race to the bottom”
In an article published by EAB last year, economist Richard Murphy described the promotion of freeports as “deeply sinister” and a “race to the bottom, because it is deliberately promoted by right wing politicians to support their demands for lower taxes, lower regulation and fewer employee protections”.