Lawyers Say ‘Get It Right’ And Freeports Can Create Jobs And Drive Investment
As the government fires the starting gun on the bidding process for locations across the UK to secure Freeport status, lawyers at Irwin Mitchell have welcomed the move to boost post Brexit prosperity but point out lessons will need to be learned from past initiatives to make the scheme a success.
Following the consultation process by the Department for International Trade (DIT), the government has confirmed that UK sea, air and rail ports will be invited to bid for Freeport status before the end of 2020, with the first locations due to be ready for business by late 2021.
More than 20 locations are already said to have expressed an interest and while it is anticipated that every nation of the UK will have at least one Freeport, the bidding process is set to unleash an unprecedented national competition, with many regions vying for a share of the benefits.
In welcoming the move as an important boost for regions likely to be feeling the effects of Covid-19 restrictions and post Brexit problems in 2021, lawyers at Irwin Mitchell point out that Freeports are not a new idea and will need strong government backing, together with the proposed tax and tariff incentives in order to make a tangible difference at local level.
With 10 Freeports the preferred government number, this could increase if enough strong bids justify a change. Those chosen will benefit from a streamlined planning process for brownfield development, tax reliefs and simplified customs procedures, plus duty suspension on goods.
A firm will be able to import goods into a Freeport without paying tariffs, process them into a final product and either pay a tariff on goods sold into the domestic market, or export the final goods, all without paying UK tariffs.
Expert Opinion“Freeports have real potential to drive investment, create jobs and act as a catalyst for post Brexit regeneration but nothing is quite that simple.
“Freeports are not forbidden under EU law and while this is a Brexit initiative, the UK did run several Freeports for 28 years, from 1984 until 2012, when the legislation expired.
“However, Brexit will change many things and while up-front benefits may be hard to determine, (particularly if tariffs remain low) reviving the idea looks a good mechanism for ‘levelling up’ the economy. If they can deliver long term benefits to regions reeling from the impact of Brexit and the ongoing challenges likely to be still being posed by coronavirus in 2021, all well and good.
“National trade hubs are a great concept but the government will need to get it right. Such schemes have the potential to help individual regions but there’s going to be pressure to support areas hard hit and make good on the ‘northern powerhouse’ initiative too, all while managing the competing claims of the UK nations and yet still approving the biggest and best bids.
“It’s a tall order but there is also a lot of room for optimism. Freeports could act as a catalyst not just for the regional growth, but for a wider national economy coming to terms with a ‘new normal’ in working practices caused by Brexit and coronavirus.” Stuart Padgham - Partner
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