Freeports in the United Kingdom

Last updated

Freeports in the United Kingdom are a series of government assigned special economic zones where customs rules such as taxes do not apply until goods leave the specified zone. The theoretical purpose of such freeports is to encourage economic activity in the surrounding area and increase manufacturing. Critics of such schemes, including the parliamentary opposition, see them as possible tax havens and open to money laundering.

Contents

Goods imported into freeports do not incur usual import procedures on entry and re-exit. Import duties are not payable until the goods are put into free circulation or used within the free zone.

The first freeport in the United Kingdom opened in the 1980s under Margaret Thatcher, as an attempt to combat de-industrialisation and a declining economy. Several freeports operated throughout the United Kingdom, but by 2012 the Conservative-led government decided not to renew their licences.

During the 2021 United Kingdom budget, Chancellor of the Exchequer, Rishi Sunak announced the first eight new freeports would be created. [1]

History

In their 1983 manifesto, The Challenge of Our Times, the Conservative government outlined its plans to establish 'experimental' freeports as a part of its regional policies to modernise the British economy following the early 1980s recession. [2] After winning a second term at the general election Margaret Thatcher's government assigned freeport status to six areas; namely Belfast, Birmingham, Cardiff, Liverpool, Glasgow Prestwick Airport and Southampton. These freeports experienced limited success during their lifetime and by 2012 Prime Minister David Cameron decided not to renew the freeport licences. Teesside MP Simon Clarke blamed the failed experiment on "an uncharacteristic lack of ambition by the Thatcher Government" and "the regulatory constraints placed on them by the EU". [3]

21st century

In 2016, the then backbench MP—and later Chancellor of the Exchequer—Rishi Sunak published a white paper for the Centre for Policy Studies outlining his ideas for post-Brexit freeports similar to those in the United States. The paper titled The Free Ports Opportunity suggested that creation of such ports could create 86,000 jobs and help fuel the Northern Powerhouse by bringing increased trade to deprived areas. [4] After the Conservative Party's victory in the 2019 general election, plans were announced for ten freeports to be set up by 2021 with regions bidding for free status. [5] Up to 40 bids for freeport status were received during the process. [6]

As part of the 2021 United Kingdom budget, Chancellor of the Exchequer Rishi Sunak announced that eight new freeports would be created in England. [1] They are East Midlands Airport, Felixstowe and Harwich, Humber region, Liverpool City Region, Plymouth, Solent, Thames and Teesside. [1]

The UK government named three aims behind creating freeports, promoting regeneration and job creation, creating a hub for global trade and to create a hotbed for innovation. [7]

Other devolved governments within the United Kingdom were invited to establish freeports, one or two each. The Scottish government announced plans for so called sustainable "green ports", [8] the Welsh government said it would continue, providing it received the same level of funding as England [9] and the Northern Ireland Executive said it was working with the HM Treasury to implement its own site.

In October 2024, the Keir Starmer Labour government announced official clearance for five existing freeports to have customs sites, which is needed to class them as operational. [10]

List of UK Freeports

LocationPort(s) and customs sitesCountryOperationalNoteWebsite
Anglesey Freeport
Porthladd Rhydd Ynys Môn		 Holyhead, Anglesey Prosperity Zone, Rhosgoch, M-SparcFlag of Wales (1959-present).svg Walespending [11]
Celtic Freeport
Porthladd Rhydd Celtaidd		 Milford Haven and Port Talbot Flag of Wales (1959-present).svg Walespending [11]
East Midlands Freeport East Midlands Airport Flag of England.svg EnglandApril 2023 [12]
Forth Green Freeport Grangemouth, Rosyth and Leith ports, Edinburgh Airport, Burntisland Flag of Scotland.svg Scotlandpending [13]
Freeport East Port of Felixstowe, Harwich International Port Flag of England.svg EnglandJanuary 2023 [12] [14]
Humber Freeport Port of Immingham, Port of Hull, Port of Grimsby, Goole Flag of England.svg Englandpending [12]
Inverness and Cromarty Firth Green Freeport Inverness, Cromarty Firth, Nigg and Inverness Airport.Flag of Scotland.svg Scotlandpending [13]
Liverpool City Region Freeport Liverpool Waters, Wirral Waters Flag of England.svg EnglandJanuary 2023 [12]
Plymouth and South Devon Freeport Devonport Flag of England.svg EnglandDecember 2022 [12] [13]
Solent Freeport Port of Southampton, Southampton Airport, Portsmouth International Port Flag of England.svg EnglandDecember 2022 [12] [13]
Teesside Freeport Teesport, Hartlepool, Teesside Airport Flag of England.svg EnglandDecember 2022 [12] [13]
Thames Freeport London Gateway, Port of Tilbury, Ford Dagenham Flag of England.svg EnglandMarch 2023 [12] [15] [11]

Rules regarding freeports

Criticism

Proposal for freeports in the United Kingdom have been heavily criticised by opposition parties, trade unions, think tanks and various economists. Reasons for this include the possibility for use as tax havens, smuggling and a way to erode worker's rights.

Despite claims of a cross party consensus, Labour Party members showed opposition to the idea with a speaker at a Labour conference describing them as "job-destroying". [19] Further to this, Labour party leader Keir Starmer called it "giving up" and "blind faith". [20] Former Shadow Chancellor of the Exchequer John McDonnell suggested it to be '"a revival of a failed Thatcherite plan from the 1980s, designed to cut away at regulation and our tax base."

At a Liberal Democrat conference in 2019, members passed a motion for the abolition of freeports due to the increased risk of money-laundering and tax evasion. [21] Similarly the then Home Affairs spokesperson—and later leader— Sir Ed Davey suggested the UK could become the world capital of money laundering.

In Scotland, the Scottish National Party (SNP) was sceptical, with trade minister Ivan McKee calling them a "shiny squirrel" to distract from the consequences of Brexit. [8] adding "the reputation of freeports across the world is mixed, with concerns about deregulation and risks of criminality, tax evasion and reductions in workers’ rights". [8] First Minister Nicola Sturgeon also raised concern over them being "low-cost, low-wage, low-value opportunities". [8] Despite these remarks, in 2021 the SNP announced its own version of freeports, called 'green ports', which they say will adopt "best practice which helps deliver our net-zero emissions and fair work principles, alongside supporting regeneration and innovation ambitions". [8]

Freeport developments

East Midlands Freeport

An inland Freeport, comprising 533 hectares at three sites, East Midlands Airport, East Midlands Intermodal Park and the Ratcliffe-on-Soar Power Station redevelopment site. Given £25m of initial capital to develop transport infrastructure and a Hydrogen Skills Academy. [22] The airport is investing £120m in a 5 year modernisation program. [23]

Freeport East

Funding of £25m was provided in 2023 to start the process of generating 13,500 new jobs at two sites at the Port of Felixstowe and Harwich International Port and four customs sites including Bathside Bay. [24] 50% of business rates that would have gone to central government can be used by the local authority for training and local developments. [25]

Liverpool City Region Freeport

One of the customs sites, in Sefton will hold Atlantic Park a highly specified industrial and logistics development, built on a former Rolls Royce factory site. [26] Another named Arc Royal, located next to the ship builder Cammell Laird, will be a carbon neutral distribution/production building. [27]

Plymouth and South Devon Freeport

Three sites were acquired in late 2023 for £7.8m at Beaumont Way in Langage, Sherford and Millbay Docks using the £20m provided by the Department for Levelling Up, Housing and Communities. The target is to generate 3,500 jobs, mainly in the defence and maritime industries. [28]

Solent Freeport

Eight locations for the Solent Freeport, the Navigator quarter next to Southampton Airport and Eastleigh rail depot, Portsmouth has the port and Dunsbury Park, with five zones in Southampton at Fawley, the Exxonmobil oil terminal, two sites on the New Forest side of the water and a 30 acre site at Redbridge. Portico Shipping providing a new HMRC customs facility at Portsmouth. [29]

Teesside Freeport

Comprising 4,500 acres it is the largest Freeport in the UK, with sites at Teesworks, Teesside International Airport, PD Teesport, Wilton International, Port of Middlesbrough, the Port of Hartlepool, Able Seaton Port, Redcar Bulk Terminal and LV Shipping. [30] Plans have been submitted for British Steel to open a new steel production plant, with an electric arc furnace, inside the Teesworks Freeport area. [31]

Thames Freeport

Thames Freeport comprises 1,700 acres of land over three sites, the Port of Tilbury, Ford’s Dagenham plant and the London Gateway. Thames Freeport at Tilbury 2 has had a new daily ferry link to Rotterdam (Europoort) since March 2024. [32]

See also

Related Research Articles

<span class="mw-page-title-main">Political history of the United Kingdom (1979–present)</span> Political outline of the history of the United Kingdom since 1979

The modern political history of the United Kingdom (1979–present) began when Margaret Thatcher gained power in 1979, giving rise to 18 years of Conservative government. Victory in the Falklands War (1982) and the government's strong opposition to trade unions helped lead the Conservative Party to another three terms in government. Thatcher initially pursued monetarist policies and went on to privatise many of Britain's nationalised companies such as British Telecom, British Gas Corporation, British Airways and British Steel Corporation. She kept the National Health Service. The controversial "poll tax" to fund local government was unpopular, and the Conservatives removed Thatcher as prime minister in 1990, although Michael Heseltine, the minister who did much to undermine her, did not personally benefit from her being ousted.

<span class="mw-page-title-main">Mel Stride</span> British politician (born 1961)

Melvyn John Stride is a British politician who has served as Shadow Chancellor of the Exchequer in Kemi Badenoch’s Shadow Cabinet since November 2024. A member of the Conservative Party, he has been the Member of Parliament (MP) for Central Devon since 2010.

<span class="mw-page-title-main">Rishi Sunak</span> Prime Minister of the United Kingdom from 2022 to 2024

Rishi Sunak is a British politician who served as Prime Minister of the United Kingdom from 2022 to 2024. He was Leader of the Conservative Party from October 2022 to November 2024. Following his defeat to Keir Starmer’s Labour Party in the 2024 general election, he became Leader of the Opposition, serving in this role from July to November 2024. The first British Asian to hold those offices, he previously held two Cabinet positions under Boris Johnson, latterly as Chancellor of the Exchequer from 2020 to 2022. Sunak has been Member of Parliament (MP) for Richmond and Northallerton, previously Richmond (Yorks), since 2015. Following the stepping down of David Cameron and Theresa May, combined with the loss of Liz Truss's seat, Sunak is the only former Prime Minister still remaining in the House of Commons.

<span class="mw-page-title-main">Ben Houchen</span> British politician (born 1986)

Ben Houchen, Baron Houchen of High Leven, is a British Conservative politician and life peer. He has been Tees Valley Mayor since 2017, winning the inaugural mayoral election in the combined authority. Houchen was re-elected in 2021 and won a third term in 2024.

<span class="mw-page-title-main">Simon Clarke (politician)</span> British politician (born 1984)

Sir Simon Richard Clarke is a British Conservative politician who was the Member of Parliament (MP) for Middlesbrough South and East Cleveland from 2017 to 2024. He briefly served as Secretary of State for Levelling Up, Housing and Communities from September to October 2022 and Chief Secretary to the Treasury from 2021 to 2022.

<span class="mw-page-title-main">Jacob Young (politician)</span> British Conservative politician

Jacob Young is a former British Conservative Party politician and served as Parliamentary Under-Secretary of State for Levelling Up from 18 September 2023, until losing his seat in July 2024. He previously served as Assistant Government Whip between September 2022 and September 2023. He was elected as MP for Redcar at the 2019 general election. He was the first Conservative MP to represent the constituency.

<span class="mw-page-title-main">Brendan Clarke-Smith</span> British Conservative politician, former MP for Bassetlaw

Brendan Clarke-Smith is a British politician and former teacher. A member of the Conservative Party, he served as the Member of Parliament (MP) for Bassetlaw from 2019 to 2024. He served under Rishi Sunak as a deputy chairman of the Conservative Party from November 2023 to January 2024, under Liz Truss as Parliamentary Secretary for the Cabinet Office from September and October 2022, and under Boris Johnson as Parliamentary Private Secretary to the Minister without Portfolio and Minister of State from February 2022 to July 2022, and as Parliamentary Under-Secretary of State for Children and Families from July to September 2022.

<span class="mw-page-title-main">Richard Holden (British politician)</span> British politician (born 1985)

Richard John Holden is a British politician who has been the Member of Parliament (MP) for Basildon and Billericay and Shadow Paymaster General since 2024. A member of the Conservative party, he was previously the Member of Parliament for North West Durham from 2019 to 2024. Holden served as the Chairman of the Conservative Party and Minister without Portfolio from November 2023 to July 2024, and as Parliamentary Under Secretary of State for Roads and Local Transport from 2022 to 2023.

<span class="mw-page-title-main">March 2021 United Kingdom budget</span>

The March 2021 United Kingdom budget, officially known as Protecting the Jobs and Livelihoods of the British People was a budget delivered by Rishi Sunak, the Chancellor of the Exchequer in March 2021. It was expected to be delivered in autumn 2020, but was postponed because of the COVID-19 pandemic. It succeeds the budget held in March 2020, and the summer statement and Winter Economy Plan held in summer and autumn 2020, respectively. The budget is the second under Boris Johnson's government, also the second to be delivered by Sunak and the second since Britain's withdrawal from the European Union. The budget was the first for government expenditure in the United Kingdom to exceed £1 trillion.

<span class="mw-page-title-main">July 2020 United Kingdom summer statement</span>

The July 2020 United Kingdom summer statement was a statement from the British Government, or mini-budget statement, delivered on 8 July 2020 by Rishi Sunak, the Chancellor of the Exchequer. It followed the budget delivered earlier in the year, and preceded the Winter Economy Plan. The purpose of the statement was to announce measures aimed at helping to promote economic recovery following the impact of the COVID-19 pandemic. The statement was delivered to the House of Commons, where Sunak unveiled a spending package worth £30bn. Concerns were subsequently raised by organisations including HM Revenue and Customs and the Institute for Fiscal Studies about the statement's impact, as well as its cost-effectiveness, while at least one major retailer declined to take advantage of a financial bonus scheme intended for rehiring employees placed on furlough during the pandemic.

<span class="mw-page-title-main">Chancellorship of Rishi Sunak</span> Rishi Sunaks tenure at HM Treasury (2020–2022)

Rishi Sunak served as Chancellor of the Exchequer of the United Kingdom from his appointment on 13 February 2020 to his resignation on 5 July 2022. His tenure was dominated by the COVID-19 pandemic in the United Kingdom, with Sunak becoming a prominent figure in the government's response to the pandemic, giving economic support to struggling businesses through various schemes. He was also involved in the government's response to the cost of living crisis, UK energy supply crisis, and global energy crisis.

<span class="mw-page-title-main">2023 United Kingdom local elections</span> Elections to local councils and mayoralties

The 2023 United Kingdom local elections were held on Thursday, 4 May 2023 in England and on Thursday 18 May 2023 in Northern Ireland. These included district councils, unitary authorities, and directly elected mayors in England, and included all local councils in Northern Ireland. Notably, these elections were the first to be held under the Elections Act 2022, a new voter identification law that required voters to show photo ID when attending a polling station, and was a cause for controversy.

<span class="mw-page-title-main">Premiership of Liz Truss</span> Period of the Government of the United Kingdom in 2022

Liz Truss's tenure as Prime Minister of the United Kingdom began on 6 September 2022 when she accepted an invitation from Queen Elizabeth II to form a government, succeeding Boris Johnson, and ended 49 days later on 25 October upon her resignation. As prime minister, she served simultaneously as First Lord of the Treasury, Minister for the Civil Service, and Minister for the Union.

<span class="mw-page-title-main">October 2022 Conservative Party leadership election</span> British leadership election to replace Liz Truss

The October 2022 Conservative Party leadership election was triggered by Liz Truss's announcement that she would resign as Leader of the Conservative Party and Prime Minister of the United Kingdom, amid an economic and political crisis.

<span class="mw-page-title-main">Premiership of Rishi Sunak</span> Period of Government of the United Kingdom from 2022 to 2024

Rishi Sunak's tenure as Prime Minister of the United Kingdom began on 25 October 2022 when he accepted an invitation from King Charles III to form a government, succeeding Liz Truss, and ended on 5 July 2024 upon his resignation. He is the first British Asian and the first Hindu to hold the office. Sunak's premiership was dominated by the Russian invasion of Ukraine, the Israel-Hamas war, the cost-of-living crisis, and the Rwanda asylum plan. As prime minister, Sunak also served simultaneously as First Lord of the Treasury, Minister for the Civil Service, and Minister for the Union.

Amber de Botton is a British journalist and former political aide. She served as the Downing Street Director of Communications from October 2022 until September 2023, succeeding Guto Harri.

<span class="mw-page-title-main">2023 United Kingdom budget</span>

The 2023 United Kingdom budget was delivered to the House of Commons on 15 March 2023 by Chancellor of the Exchequer Jeremy Hunt. It was the first of two full budget statements presented during the Sunak ministry. It was also the first full budget statement to be presented by Hunt since his appointment as chancellor, and the first since the October 2021 United Kingdom budget presented by then-Chancellor Rishi Sunak. The date of the budget was confirmed by Hunt on 19 December 2022. At the same time he confirmed the budget would be accompanied by a full budget report from the Office for Budget Responsibility. The statement was presented as a budget for growth, with the objective of bringing about the conditions for long-term sustainable economic growth within the UK.

<span class="mw-page-title-main">Teesside Freeport</span> Freeport in the United Kingdom

Teesside Freeport is the largest Freeport in the United Kingdom, where special arrangements apply for taxation and customs. It was launched in 2021.

<span class="mw-page-title-main">November 2023 United Kingdom autumn statement</span>

The November 2023 United Kingdom autumn statement was outlined to the House of Commons on 22 November 2023 by Chancellor of the Exchequer Jeremy Hunt. The statement, Hunt's second as Chancellor, came at a time when the governing Conservative Party was trailing in the opinion polls, with the Labour Party experiencing a double-digit lead, and was his last autumn statement before the next general election.

<span class="mw-page-title-main">Chancellorship of Jeremy Hunt</span> Jeremy Hunts tenure at HM Treasury (2022–2024)

Jeremy Hunt served as Chancellor of the Exchequer of the United Kingdom from his appointment on 14 October 2022 to his resignation on 5 July 2024, during the premierships of Liz Truss and Rishi Sunak.

References

  1. 1 2 3 "Freeports: What are they and where will they be?". BBC News . 3 March 2021. Retrieved 3 March 2021.
  2. ↑ "Tha Challenge of Our Times: Conservative Party General Election Manifesto 1983". Margaret Thatcher Foundation . Conservative Party . Retrieved 7 March 2021.
  3. ↑ Simon Clarke, MP for Middlesbrough South and East Cleveland (11 October 2018). "Freeports". Parliamentary Debates (Hansard) . Vol. 647. Parliament of the United Kingdom: House of Commons. col. 168WH–172WH. All those [1980s] freeports, however, failed to achieve the success that we have witnessed in others around the world, because they did not offer anything like the advantages that could be acquired in many other freeports outside Europe. That was partly due to an uncharacteristic lack of ambition by the Thatcher Government, but mostly due to the regulatory constraints placed on them by the EU.
  4. ↑ Sunak, Rishi (2016). The Free Ports Opportunity (PDF). London: Centre for Policy Studies. ISBN   978-1-910627-40-2. Archived from the original (PDF) on 12 May 2021. Retrieved 9 May 2021.
  5. ↑ Goodman, David (10 February 2020). "U.K. Begins Search for Free Ports as Spending Pledges Mount". MSN. Bloomberg News.
  6. ↑ Peters, Tom (15 February 2021). "Local Labour leaders should beware the false promise of free ports". Labour List . Retrieved 7 March 2021.
  7. 1 2 3 "Freeports: What are they? What do we know? And what will we know?". 10 March 2023.
  8. 1 2 3 4 5 Grant, Alistair (21 January 2021). "SNP accused of 'humiliating climbdown' over UK freeport plans". The Herald . Glasgow: Newsquest. ISSN   0965-9439 . Retrieved 7 March 2021.
  9. ↑ Wells, Ione (5 March 2021). "Risk freeports could drive trade away from Wales, Welsh ministers claim". Wales: Politics. BBC News . Retrieved 8 March 2021.
  10. ↑ Foster, Peter; Pikard, Jim (27 October 2024). "Rachel Reeves will not unveil new freeports in Budget, officials admit". Financial Times .
  11. 1 2 "Wales' new freeports unveiled". 22 March 2023.
  12. 1 2 3 4 5 6 7 8 "U.K. Names Eight Freeports in Bid to Boost Post-Brexit Trade". supplychainbrain.com. Keller International Publishing. Bloomberg News. 3 March 2021. Retrieved 7 March 2021.
  13. 1 2 3 4 5 6 7 8 9 10 11 "Freeports" . Retrieved 9 December 2023.
  14. ↑ "Jobs and investment boost for Liverpool and East Anglia as Freeports given green light". 10 January 2023.
  15. ↑ "THAMES FREEPORT - ALL TAX SITES AND FREEPORT BOUNDARY" (PDF). Retrieved 9 December 2023.
  16. 1 2 3 4 "HMRC UK Freeports Induction Pack" (PDF). November 2023.
  17. ↑ "The best things in life are free(ports)?". 14 March 2023.
  18. 1 2 "Thames Freeport" . Retrieved 9 December 2023.
  19. ↑ "Labour Conference Sees Free Port Opposition". portstrategy.com. 4 October 2018. Retrieved 7 March 2021.
  20. ↑ "Keir Starmer responds to the Budget". Labour Party . 3 March 2021. Retrieved 8 March 2021.
  21. ↑ O'Donoghue, Daniel (16 September 2019). "Lib Dems accused of 'economic vandalism' after conference attack on free ports". The Press and Journal . Aberdeen: DC Thomson. ISSN   2632-1165 . Retrieved 7 March 2021.
  22. ↑ "East Midlands: England's only inland freeport gets green light". 30 March 2023.
  23. ↑ "East Midlands Airport begins £120m modernisation works". 9 January 2024.
  24. ↑ "Freeport East to benefit from new £150m UK-wide fund to boost economy". 30 December 2023.
  25. ↑ "Freeport East will boost local communities across the region". 18 December 2023.
  26. ↑ "Turley helps secure green light for an 807,000 sq ft all-electric industrial space in Liverpool City Region's Freeport". 6 December 2023.
  27. ↑ "A NEW CROSS-DOCKED LOGISTICS / INDUSTRIAL FACILITY UNDER CONSTRUCTION NOW" . Retrieved 10 January 2024.
  28. ↑ "Devon freeport to get £3.5m of land for jobs". 18 December 2023.
  29. ↑ "Solent Freeport's customs site in Portsmouth gets the go-ahead". 21 June 2023.
  30. ↑ "First UK Freeport Activity As Steel Consignment Arrives In Teesside". 28 September 2022.
  31. ↑ "THE KEY DETAILS ABOUT STEELMAKING RETURNING TO TEESSIDE". 7 November 2023.
  32. ↑ "P&O Ferries strengthens North Sea presence with new London – Rotterdam freight route". 9 January 2024.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.