Winning bids for the new free economic zone status reportedly goes to Thamesport, Felixstowe and Harwich, Humberside, Liverpool City, Plymouth, Solent, Teesside, and East Midlands Airport.
The UK has announced the locations of eight new ‘freeports’ in England following a rapid analysis of up to 40 bids received just last month, with the winning bids for the new economic zone status reportedly going to Thamesport, Felixstowe and Harwich, Humberside, Liverpool City, Plymouth, Solent, Teeside, and East Midlands Airport.
A further two freeports in the devolved administrations of the UK are still to be announced.
Treasury minister Rishi Sunak used today’s Budget statement to announce the locations, which offer tax advantages and customs relief to businesses contained within them. The freeport sites, especially designated economic zones where normal tax and customs rules do not apply, will be eligible for Stamp Duty and business rates relief, as well as National Insurance relief for employers in some cases.
According to the UK Treasury, the freeports will be up and running by the end of the year.
Thames Freeport confirms selection
Thames Freeport, a joint bid by DP World and Forth Ports, today confirmed that it had been chosen to be one of eight new freeports in England. Thames Freeport describes itself as “a digitally linked economic zone connecting Ford’s world-class Dagenham engine plant, the global ports at London Gateway and Tilbury, and many communities in urgent need of ‘levelling-up’.”
It said “businesses looking to expand are being urged to take advantage of the tax benefits of relocating to the Freeport and being part of a customs zone, which makes it easier and cheaper to move goods into and out of the country.
It said the other benefits of Thames Freeport would include: Over £4.5 billion in new public and private investment; 25,000+ new jobs with many more across supply chains, with significant investment in training and skills; 1,700 acres of development land – much with planning consent; £400 million port investment into some of the most deprived areas.
The bid consortium also highlighted that “Freeports are in our DNA – DP World began as a free trade zone in Jebel Ali, while Tilbury was a freeport until 2012”.
Stuart Wallace, Chief Operating Officer at Forth Ports, owner of the Port of Tilbury, said: “This is fantastic news and we are ready to hit the ground running. The freeport builds upon the successful completion of our new port, Tilbury2 and provides the platform for further expansion.
“The freeport policy’s special economic measures will turbocharge the best of the private sector, attracting value add manufacturing activity to the ports, the Thames Estuary and the wider South East, alongside supporting key infrastructure projects in the coming years. The Thames Freeport will be that catalyst to level up the left behind communities along the estuary.”
Ford: ‘Great opportunity’
Graham Hoare, Chairman and Executive Director, for Business Transformation at vehicle manufacturer Ford of Britain, added: “The Thames Freeport will be a new centre of excellence for the country as we electrify, automate and digitise our future. The freeport provides Ford with a great opportunity as a test bed for a variety of customer-focused mobility technologies and other business opportunities at Ford Dagenham in the future.”
Alan Shaoul, Chief Financial Officer at DP World in the UK, owner of the port and logistics park London Gateway), commented: “We are open for business and would urge anyone looking to expand to get in touch to find out more about the benefits of locating at Thames Freeport. Our London Gateway site alone has almost 10 million square feet of land that has planning consent, and the capacity to expand materially its operational area and therefore attract new foreign direct investment within the lifetime of this parliament.”
The bid partners said the Thames Freeport “will allow Ford to transition to a future of automated, connected, electric vehicles”.
Lloyd’s Loading List reported last month that as many as 40 ports, port clusters and airports had submitted proposals, including some of the biggest names in the UK ports sector, including Dover, Southampton, Felixstowe/Harwich, London Gateway/Tilbury, Hull, Port of Tyne, Teesport, Bristol, Milford Haven and Grangemouth, as they seek to attract the associated benefits including investment funding, customs free zone flexibility, and other tax incentives.
The expectation is that those that are successful in their bids to gain freeport status include favourable customs duties and processing, suspension of VAT, business rates relief, zero national insurance contributions, enhanced capital allowances, simplified planning and development rules and stamp duty reliefs.
Although Brexit supporters have long championed freeports as a benefit of leaving the EU, critics have pointed out that the UK had several freeports while it was within the EU and had eliminated them in 2012 under a previous Conservative-led coalition government. Others have argued that EU membership provided all of the benefits of freeports and much more, which was why they fell out of favour in the UK.
Post-Brexit customs and trading complications
However, the additional customs and other taxation and trading complications reintroduced by Brexit into UK-EU trading has reinforced the potential benefits of freeports under the new post-Brexit arrangements, alongside other facilities such as customs bonded warehousing and simplification arrangements.
Government documents indicate it believes that the importance of initiatives such as freeports had been increased further by the effects of Covid-19, noting: “As we look beyond the unprecedented disruption caused by the Covid-19 pandemic, the government is more determined than ever to boost our economy, level up our country and strengthen our Union through programmes such as the UK Shared Prosperity Fund, the Levelling Up Fund, and Freeports. Revitalising our port regions through an ambitious Freeport policy is a key component of realising this vision and unlocking the deep potential of all nations and regions of the UK.”
Displacement fears
Although the government claims that freeports would create “national hubs for trade” and “turbo-charge” the UK’s economic recovery, some within industry are concerned that they will instead simply shift investment from one location to another. Adam Marshall, head of the British Chambers of Commerce, has said his members were nervous that jobs could be “displaced”, while an internal Treasury document conceded that “zone-based policy can have a displacement effect”, the FT reported.
Source: Lloyd’s
