So what are Freeports? Freeports are areas with different economic regulations which are based in and for up to 45km around an air, rail or seaport. This includes such things as tax breaks on investment, business rates relief, tariff-free imports and more.
Use of so-called “Special Economic Zones “ is not a new concept to the UK, with previous attempts at freeports in the 1980s, as well as the ongoing use of enterprise zones which have been expanded in recent years, and the transformation of the London Docklands!
However, what makes freeports different is the fact they are based around a trade hub, meaning there are more incentives that can be provided through changes to tariffs and regulations. The UK leaving the EU has enabled greater flexibility over trade policy and has increased the possible incentives that can be provided.
There are 8 current English freeports, which were selected through a competitive process back in 2020, with the government intending for at least one freeport in the other nations in the UK in the future. These freeports include the East Midlands, Felixstowe & Harwick, the Humber, the Liverpool City Region, Plymouth & South Devon, the Solent, The Thames and Teesside.
Levelling-up priorities have been clearly considered in the choices of the ports, with areas such as Liverpool, Humberside and Teesside being key target areas for regeneration. In addition there has been a focus on supporting some major growth opportunities, including the UK’s largest around the Thames Estuary, and in supporting the UK’s busiest port at Felixstowe.
Some of the advantages of freeports include the removal of tariffs enabling cheaper components for manufacturers, and an increase in investments. They also promote more trade in general with key advantages for both exporters and importers. In addition, they drive more development in and around the port, which can help to cement economic benefits.
And the economic benefits can be huge! For example, the Thames Freeport has estimated it can draw £4.5bn of new investment and create 21,000 new jobs from its new status. The UK’s ports are major drivers of growth, with an eye-watering £500bn of trade coming through ports – and freeports could help to expand this even more!
Overall Freeports have the potential to really drive investment in certain areas, promote regeneration, and innovation. With effective oversight and targeting areas which need greater investment, freeports have the real potential to play a decisive role in building back better and leveling-up.
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