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Trade secretary unveils Freeport plans – updated/2

[ August 2, 2019   //   Chris ]

International Trade Secretary Liz Truss has unveiled plans to allow ports and airports across the UK will be invited to bid to become one of up to 10 Freeports after Brexit.

The government prediucted that they would “transform the country’s ports and airports just as freedoms transformed London’s Docklands in the 1980s. More details on how ports and airports across the country will be able to bid for Freeport status will be announced soon.

Freeports would be “free of unnecessary checks and paperwork” including those for customs and tax and would encourage manufacturing businesses to set up or re-shore, it said, adding that the most successful Freeports globally attract businesses through liberalised planning laws. This suggests that the government’s plans could also incorporate elements of an ‘enterprise zone’ scheme as well as liberalisation in purely customs matters.

They would ensure that port cities and airports would be ready to take full advantage of post-Brexit opportunities, including increased trade with the US and Asia as the UK signed its first free trade deals.

The Government said that leaving the EU on 31 October would allow the UK to operate an independent trade policy for the first time in 45 years.

It will also announce a new Freeports Advisory Panel to advise the government on how to set them up. The panel will include ministers from the Department for International Trade and HM Treasury, as well as chief executive of the UK Major Ports Group Tim Morris and Tees Valley Mayor, Ben Houchen.

The Secretary of State was due to visit Teesport, alongside Tees Valley Mayor Ben Houchen on 2 August. The Mayor has championed Freeports, and a report commissioned by his authority found a Freeport could provide a significant boost to his region and the UK area’s GDP. He said: “Creating a Freeport right here would turbocharge jobs and growth, bringing investment into the region and making us a global hub of enterprise and innovation.”

Other ports which have expressed an interest in the bidding process include the Port of Tyne, Milford Haven and London Gateway.

International Trade Secretary Liz Truss MP said: “Freedoms transformed London’s Docklands in the 1980s, and freeports will do the same for towns and cities across the UK. They will onshore enterprise and manufacturing as the gateway to our future prosperity, creating thousands of jobs…I look forward to working with the Freeports Advisory Panel to create the world’s most advanced Freeport model and launch the new ports as soon as possible.”

Chief secretary to the Treasury Rishi Sunak added: “We are exploring freeports as an innovative way to drive growth and support thousands of high-skilled jobs across the UK. We will focus on those areas that could benefit the most, as we look to boost investment and opportunity for communities across the country.

The government cites the US as model for success, including Miami where businesses within the zone can import, warehouse and re-export products duty-free. Businesses can also defer paying tax on their products while they are stored on site, allowing them to manage cash flow and respond more quickly to spikes in demand.

UKMPG’s Tim Morris commented on his appointment to Advisory Panel “Free Ports are a potentially transformational opportunity for locations with the right conditions and strong local support. They have proved to be successful in stimulating investment and jobs in a range of locations around the world. It’s the right thing to do to open the opportunity to all and let the strongest bids come through. It’s an exciting project to be part of and UKMPG looks forward to its role on the Panel alongside our work improving conditions for development more generally to boost investment, jobs and prosperity in coastal communities.”

Port of Tyne chief executive, Matt Beeton,  said that the north-east gateway was championing a concept for freeports that has proved successful in the US, China and Dubai, one that establishes multi-site Free Port designation zones, or ‘Virtual Free Ports’ that seek to benefit complex supply chains that will be hardest hit by Brexit. He explained: “It’s a concept that will bring the most benefit to advanced manufacturers in the North East seeking to attract new investment with quick routes to global markets.”

Just like a geographic Free Port, a Virtual Free Port would sit outside of UK customs and offer the ability to defer payment of taxes on imported goods and materials and would avoid them altogether, if final goods are exported.

Beeton said: “The Government’s Free Ports Advisory Panel needs to consider the complex needs of manufacturers like Komatsu, Nissan and others and create solutions that safeguard jobs and stimulates further foreign investment. We strongly believe a Free Port covering the region’s advanced manufacturing cluster and key transport nodes like the Port of Tyne has the potential to supercharge regional growth by unlocking post-Brexit opportunities in new and existing supply chains.”

Such a model would not be restricted to a geographic boundary, which many fear could restrict the economy and negatively impact business in the North. A Virtual Free Port consisting of multiple sites connecting for example, the Port of Tyne, to other regional international ports or regional Enterprise Zones would greatly benefit local industry, he said.

Tags: Brexit; HM Government; Teesport