Would the co-op model offer a better way to run UK ports after Brexit?

The Co-op Party’s Joe Fortune says multi-stakeholder ownership would help delivery a more sustainable infrastructure for the UK

With Brexit putting increased pressure on UK borders and supply chains, and the Covid-19 crisis showing how vital those supply chains are, the national port system has been put in the spotlight.

With the port industry weighing up its options, the Co-op Party is advocating multi-stakeholder ownership using the co-op model.

General secretary Joe Fortune said: “The ports industry – its small group of owners, chief customers and hinterland – are focused on preparing and submitting bids for ‘freeports’ or associated schemes.  

“The Thatcher-driven 1980’s port privatisation transferred this vital infrastructure into the private sector. Over time, this most basic and vital infrastructure has been run by a smaller and smaller number of private entrepreneurs and owning companies.  

“As is natural when using the same old model of ownership, they have focused heavily on the use of the assets, in order to drive efficiency and profit. Within ports, efficiency is king: it is the difference between a ship stopping at your port or not.”

But Mr Fortune argues that this privatised model means there is no slack in the system for when crises like Covid-19, with the need to stockpile PPE and other medical supplies, occur: the ports, he said, are “ill-equipped to deal with anything other than business as usual.

“This is a common experience across our economy within services and infrastructure. It is the business model which drives this fine balance, as it returns maximum yield.”  

The government is looking at the development of freeports to maintain supply chains and satisfy important employers like Nissan and Ford. Freeports are secure customs zones here business can be carried out inside a country’s land border, but where different customs rules apply. They can reduce administrative burdens and tariff controls, provide relief from duties and import taxes, and ease tax and planning regulations.

Mr Fortune said: “The port owners, who will be part of the freeports, will feel they can benefit from reduced or non-existent business rates, capital injections and fuller ports.

“However, into the future, a discussion has to take place about taking back control of our basic infrastructure. Beyond the European-wide port liberalisation agenda and rules on state aid, new models of port ownership can be explored.”

He says the multi-stakeholder co-op model “would lend itself well to the nature of the industry and its national and regional importance”.

“Indeed,” added Mr Fortune, “ the only non-privatised ports in the country (Trust Ports) are run not for private profit, with multi stakeholder governance models.

“For our country to be more resilient and able to roll with the slings and arrows of outrageous fortune, we must widen ownership and develop diverse forms of ownership across the economy – and that should not exclude the UK ports. ”