Posted on: 01 April 2021
The new ports that will bring business to the UK
During the budget announcement on the 3rd March 2021, the UK government announced that there would be 8 new freeports in the UK to help stimulate business around the country.
In this article, we will find out a bit more about freeports; what they are, how they work and what they will do for the UK economy.
Freeports in the UK
Freeports aren’t a new concept on the global market, and the UK even had 5 freeports located in Liverpool, Southampton, Port of Tilbury, Port of Sheerness and Prestwick Airport in 2012, but legislation allowing freeports in the UK expired in 2012.
The 2021 budget announced the government would be reopening the freeports at Port of Tilbury, Southampton and Liverpool, with 5 new sites opening at Felixstowe, Humber, Teesside, East Midlands and Plymouth.
Scotland, Northern Ireland and Wales are all in talks with HM Treasury to create their versions of freeports.
What is a freeport?
A freeport is a type of free economic zone where normal tax and customs rules do not apply. Whilst the freeports will be based in the UK, they are designated as being outside of the UK therefore, imports can enter with simplified customs documentation and without paying tariffs.
This means that the UK could become more attractive to businesses who want to save money through reduced taxes.
How can a freeport benefit the UK?
These are some of the ways that freeports could benefit the UK.
Attracting business into the country
As we mentioned earlier, a freeport is a way of attracting business into the country.
Following Brexit, many companies decided to move headquarters to the EU, move assets or make cuts to staff due to the uncertainty about a no-deal Brexit and the extra expenses and paperwork that could arise from trading outside the EU.
With the new freeports opening up, the UK will be able to offer businesses from other countries a cost-effective method of operating due to the reduced, or exempt, tax rates
To set up and run freeports, there will be a significant workforce required thus creating many new jobs and better long-term career prospects in the designated areas. It is estimated that the freeport in Liverpool alone will create around 14,000 jobs in the Liverpool City Region, with similar numbers at the other ports around the country.
Investment in deprived areas
Freeports are expected to attract trade and commerce to these areas, so by putting freeports in more deprived areas, there will hopefully be regeneration to these areas.
Three of the new ports are to be set up in Hartlepool, Felixstowe and Harwich and Liverpool, so will welcome the increased amounts of trade and commerce the freeports will bring.
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Business Guidance17 November 2020
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