At least seven new freeports are anticipated with the opening of the freeports bidding process in England.
The first are expected in 2021, as part of at least 10 created across the whole of the UK to attract major domestic and international investment. Areas given freeport status will benefit from a package of tax reliefs, simplified customs procedures, a streamlined planning processes to boost redevelopment and government support to promote regeneration and innovation.
As part of the freeports policy, a new customs model will mean a firm can import goods into a freeport without paying tariffs, process them into a final good and then either pay a tariff on goods sold into the domestic market, or export the final goods without paying UK tariffs.
Devolved nations losing out?
The BPA welcomed the launch of the bidding process but questioned how fair it is for the devolved nations of the UK. Richard Ballantyne, chief executive of the British Ports Association (BPA), said that “our members in Scotland, Wales and Northern Ireland have concerns that dealignment and delays to the policy in the devolved administrations may be disruptive to ports market, which rely on a level-playing field for free and fair competition”.
The BPA is in favour of the government’s decision to consider more than 10 freeports but remains cautious of potential economic displacement in England. It said the implementation of UK freeports must not disrupt the level playing field upon which UK ports compete.
More time needed
The UK Major Ports Group (UKMPG) also welcomed the launch of the bidding process but warned ports need more time for applications. Tim Morris, CEO of UKMPG, pointed out that “potential bidders face a real challenge in submitting the kind of detailed proposals involving a range of different organisations that the Government is asking for. This is particularly difficult at a time when port operators are both working hard to keep pandemic impacted supply chains moving and preparing to mitigate the impact of UK/EU border disruption. Simply put, bidders need more time”.
Bidders will need to submit bids by 5 February 2021. Bids will be assessed in March 2021, with decisions made in spring.
Freeports will adhere to the OECD Code of Conduct for Clean Free Trade Zones, and current obligations set out in the UK’s Money Laundering Regulations 2017 will be maintained.
