BUDGET 2021 | Freeport status for Liverpool

The Port of Liverpool’s ‘freeport’ designation, removed in 2012, has been reinstated in the Chancellor’s budget announcement, and is expected to bring investment, trade and jobs to the city region.

The Liverpool City Region bid for freeport status, submitted to the Government ahead of the 5 February deadline, is one of eight winning applications. The other designated freeports are East Midlands Airport, Felixstowe & Harwich, Humber, Plymouth and South Devon, Solent, Teesside, and the Thames.

Freeports are specially designated economic zones where usual tax and customs rules do not apply, to encourage import, export and other commercial activity. For example, imports can enter a freeport with simplified customs checks and without paying tariffs.

The Port of Liverpool operated under freeport status until freeports were abolished in 2012 by the then-coalition government. The revival of freeports by Prime Minister Boris Johnson’s administration is part of Whitehall’s policy shift towards light-touch regulation and low-tax commerce.

The new freeports will contain areas where businesses will benefit from more generous tax reliefs, customs benefits and wider government support to areas of the country in need of regeneration.

Asif Hamid, chair of the Liverpool City Region Local Enterprise Partnership, which coordinated the bid, said: “This is a groundbreaking announcement for the city region. The multi-gateway, multi-modal freeport will enable key sites to attract new investment, create jobs, support the wider economy and increase levels of innovation.

“It also has the potential for future opportunities in hydrogen, offshore wind and tidal power, ensuring that our city region becomes a focal point of the Government’s net-zero carbon ambitions and a global beacon for investment in renewable technologies.”

LCR Freeport Diagram

Diagram from bid document showing sites in the LCR freeport

According to the Budget announcement today, the Government will have to legislate for powers to create so-called ‘tax sites’ in freeports, which would in turn be approved and confirmed by ministers. Tax and other benefits include:

  • Full relief from Stamp Duty Land Tax on the purchase of land or property within freeports, provided it is purchased and used for a qualifying commercial purpose. The relief will be available until 30 September 2026.
  • An enhanced 10% rate of Structures and Buildings Allowance for constructing or renovating non-residential properties within freeports and bringing them into use on or before 30 September 2026
  • An enhanced capital allowance of 100% for companies investing in plant and machinery for use in freeport tax sites up until 30 September 2026.
  • Full Business Rates relief for all businesses operating in freeport sites, and certain expanding businesses, available to apply for until 30 September 2026. Relief will apply for five years from when each beneficiary first receives relief.
  • National Insurance relief for employers operating in freeports from April 2022, subject to parliamentary process and approval. This would be available until at least April 2026 with the intention to extend for up to a further five years to April 2031.

The winning freeports must now complete their business cases and have their governance arrangements signed off by Government before commencing operations later this year.

The Port of Liverpool straddles Liverpool and Sefton boroughs, with the main operations at Seaforth docks in Sefton.

The three development areas proposed for tax sites in the Liverpool City Region freeport are: Peel L&P’s Wirral Waters mixed-use scheme, Langtree’s Parkside colliery regeneration in St Helens, and Stobart’s 3MG (Mersey Multi Modal Gateway) development in Widnes. Peel L&P’s proposed multi-modal terminal on the banks of the Manchester Ship Canal was also included in Liverpool City Region’s bid, despite it being in Greater Manchester.

Peel Ports, the operator and port authority of the Port of Liverpool, supports the freeport bid. However, Sefton Council has previously said it “strongly opposes” reinstating freeport status for the area unless the environmental and social impacts of growth at the port –particularly road traffic – are mitigated. The council has been contacted for comment.

Anthony Hatton, director of strategic projects at Peel L&P, said: “We’re delighted to hear the Chancellor’s announcement that the bid to become a freeport has been successful and that our Wirral Waters and Port Salford developments have helped to the strengthen the case. As a hub for global trade and investment, the freeport will promote levelling up through regeneration, attracting foreign investment, creating new jobs and facilitating innovation, particularly in low carbon technology.

“Meanwhile, Wirral Waters is a nationally significant regeneration site that will support manufacturing and, through the creation of a £23m Maritime Knowledge Hub, will be a focus for dedicated maritime and decarbonisation innovation.

“The inclusion of our Port Salford tri-modal freight facility and distribution park will provide an inland customs site with rail access to the Port of Liverpool and the West Coast Mainline.”

Despite the freeport win, Steve Rotheram, Metro Mayor of the Liverpool City Region, said that, overall, the budgetary measures announced by the chancellor today “fall short of the comprehensive long-term recovery plan and investment…that regions like ours need if the Government is to achieve its stated aim of ‘levelling up’”.

Port Of Salford CGI

Peel L&P’s Port Salford was also included in the Liverpool City Region freeport bid

Your Comments

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Well Andy Burnham. How did Manchester do after you lost your fight with the government in the Autumn. Leeds got the Green Bank, Darlington of all places got the Treasury. Even Liverpool got a Freeport. Political posturing may help your own political ambitions, but they arent doing Manchester any good. If you pick a public fight you need to win it, otherwise you just look weak, someone who can be ignored

By Anonymous

Well done Liverpool

By Anonymous

Good news for long-neglected Birkenhead.

By Moomo

As LibDem leader on the council pointed out..as long as it doesn’t attract the chancers…quick buck merchants and the like ….should bring POSITIVE in treatment to the area

By Tercol

If you’re happy for aloof, out of touch and dysfunctional central government to dictate to you and walk all over you then fair enough. Burnham had a perfectly valid point about the government failing to justify different lockdown restrictions and the different financial support packages available which had a profound effect on people suffering loss of income.

That fact is we need strong, high profile, articulate local leaders who are determined to hold the feet of central government to the fire otherwise we risk another few decades of ‘Westminster knows best’ and economic stagnation in the north.

To claim there is any connection between the debate around lockdown restrictions and these budget announcements is disingenuous in the extreme.

By Westminster dysfunction

If handled properly this could be very good for the LCR and beyond.

By Liverpolitis

Liverpool is strategically located to benefit from shifted global trade patterns, along with the burgeoning Mersey Maritime sector including green energy. This bid includes the Atlantic Park in Sefton Borough, as well as the Stanley industrial estate in Skelmersdale. It brings in the maritime and logistics sector for much of the wider city region. National government is realising that Liverpool is vital to the country’s success.

By Red Squirrel

Big success for the city region but also for the North Midlands and even Scotland… a sea gateway to the world. It’s important that the regeneration funding and incentives to invest are linked to the freeport. Would have been a major blow if the intense lobbying by the business community had not paid off. Also, real benefits for our deprived communities in the way of jobs

By George

Brexit can benefit Liverpool City Region and the North of England

By Anonymous

Much of the port’s decline was attributed to it being on the wrong side of the country after we joined the EU. The government clearly understands the city’s strategic role as the west coast’s largest deep sea port, best able to support its ‘global Britain’ ambitions. It’s already signed 64 free trade agreements, post-Brexit, and there are more underway.

Put another way, we’re facing the right way once more and if the government joins the Asia-Pacific free trade pact then that could be another game-changer. A post-Panamax container terminal, easy access to the Pacific via the Panama ship canal: blimey, Liverpool could be a boom port once again. Credit due to Peel Ports, by the way – they’ve played a blinder.

By Sceptical

An awful transfer of wealth from the public good into the pockets of the owners. The true economic additionality of these designations is wholly questionable and the EU is clamping down on them because they’ve become havens for smuggling, organised crime and bad employment/environmental practices. A dreadful policy which will shuffle around investment that could probably happen anyway in a more controlled and socially/environmentally productive fashion.

By Sceptic

Liverpool didn’t decline due to the UK entering the EC but because our trade with non-European countries was no longer subsidised by British foreign colonies as the Empire fell away.

Trade with your nearest and largest neighbours will always be cheaper and logistically more efficient and will always yield larger volumes so unless the UK works out a way of raising anchor and sailing off into the Atlantic, Brexit will have as negative an impact on Liverpool as it will on the rest of the country due to the increased barriers to trade it erects with our nearest and largest trading partner.

By The Brexit elite

Unclear what this has to do with being a benefit of Brexit, given that freeports existed in the UK previously and exist in EU countries now.

I await evidence for claims of how Brexit will benefit the North. Freeports are off that list.

By OldTom

More giant cranes arrived today in Liverpool further expansion of the port , its already happened.
Liverpool handles more freight now than it ever did and this will be a game changer regardless what people say down the M62.

By Anonymous

“Trade with your nearest and largest neighbours will always be cheaper and logistically more efficient and will always yield larger volumes”

This is over-simplistic. We’re a global marketplace, and as can be seen by the paperwork (rather than tariff) barriers imposed what we’ve just exited is a cartel.

There is an intellectual debate to be had whether trade with the rest of the world is better value than trade inside that cartel. But outside it we are, and so trade with the rest of the world we must anyway!

My money is on USA goods in particular being way better value, especially if we start to question whether even trying to deal with the EU’s obstacles is worth the effort.

By Jeff

Aren’t these a bit like those pathetic enterprise zones Thatcher agreed in the 80s? Investment can never be forced into an area. There has to be something to invest for. With regards to Manchester getting nothing! Unlike the rest it has levelled itself up.

By Elephant

Being able adjust your own tariffs and customs is a benefit from Brexit

By Stuart wood

Brexiters clearly have their heads in the sand on this thread!

By Disgruntled Goat

@ Jeff you seem to be forgetting that the US has their own rules and standards that the UK will be forced to adhere to as the price of a free trade deal with them. These similarly act as non-tariff barriers in the same way that the EU’s rules and standards (that we had great influence over as a member state) do in terms of access to the single market.

So in exiting the EU we swap one set of rules for another but with less influence, less leverage and fewer economic benefits and with trade barriers erected to our nearest and largest trading partner. Permanently.

So Brexit is undoubtedly costly and provides little to no benefit to anyone, regardless of which part of the country you’re situated in. I therefore can’t see any great upswing in volumes and value of goods going through Liverpool unless we restructure our economy towards manufacturing. Brexit pretty pointless when all is said and done.

By The Brexit Elite

Hull also got freeport status and they face the EU

By Anonymous

I hope this is good for Liverpool and beyond, looks like Manchester too will get a share of this via Port Salford. I have to question what ‘this’ is though …we have been here before , these things existed not that long ago. There benefits were questionable then and they are questionable now.

By Simon

Hull is not Liverpool

By Anonymous

It doesn’t mean anything, another enterprise zone scheme

By Dan

The tides are turning for Liverpool massively

By Anonymous

I hope the tides do turn. Liverpool has always suffered for its geography and it needs some good luck and some serious sustained investment. Not sure this will be it but you never know.

By Wirralwanderer

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