Insight

Any port in a brewing economic storm?

The Government has launched a 10-week consultation over plans to introduce 10 new tariff-free ports across the country.

The new “business and enterprise hubs” will create thousands of jobs say ministers and “unleash the potential in our historic ports”.

Free ports are areas of the UK that are outside the country’s customs territory, meaning goods can be manufactured, imported and exported inside the zones without incurring tariffs.

Mr Johnson pledged during the Tory leadership campaign to introduce six free ports once Britain has left the EU, so the latest announcement goes one step further. If most, if not all, of the free ports (which can also include inland airports and rail hubs) are in the midlands or north it will help to fulfil his post-election speech promise of economic levelling to the recently turned Tory constituencies.

Following the consultation process the Government will invite sea, air and rail ports to bid for free port status on a competitive basis and the locations of the free ports will be announced by the end of the year, with a view to opening them up for business in 2021.

Chief Secretary to the Treasury Rishi Sunak said: “Free ports …will attract new businesses, spreading jobs, investment and opportunity to towns and cities up and down the country.

“This is all part of our mission as an open, outward-looking country, championing global free trade with vibrant free ports that work for all of the UK.”

Ministers say a full customs declaration would not be required to move goods into a free port but Labour accused the Government of cutting away at regulations and the tax base to help the “super rich”.

Labour’s shadow chancellor John McDonnell said: “There is very little solid evidence that so-called free ports create jobs or boost economic growth. This plan only represents a ‘levelling-up’ for the super-rich, who will use free ports to hoard assets and avoid taxes”.

In relation to business rates, is the creation of a freeport a Material Change of Circumstance enabling a reduction in rateable value? Well, many of the relevant principles are set out in my paper on Brexit which can be found here: http://dunlopheywood.com/wp-content/uploads/2020/01/PDF-Brochure-Update-Jan-2020-Brexit.pdf

 

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