UK launches scheme for up to 10 free ports

New free air, rail and seaports across the UK could create thousands of jobs, as well as attract new businesses, investment and opportunity.

David Sapsted

10 February 2020

The UK government has opened a consultation process with the aim of creating up to 10 free ports across post-Brexit Britain.Ministers aim to open the first of the new "business and enterprise hubs" in 2021 in the first stage of a process, which, they claim, will create thousands of jobs.The 10-week consultation process will be followed by a competition open to air and rail ports, as well as seaports, to bid for free status, which would enable them to import goods without tariffs until they entered the domestic market. No duty would be payable on goods to be re-exported.

The benefits of UK free ports

Chief Secretary to the Treasury Rishi Sunak says, "Free ports will unleash the potential in our proud historic ports, boosting and regenerating communities across the UK as we level up. They will attract new businesses, spreading jobs, investment and opportunity to towns and cities up and down the country."This is all part of our mission as an open, outward-looking country, championing global free trade with vibrant free ports that work for all of the UK."Secretary of State for International Trade Liz Truss adds, "We are taking back control of our trade policy and opening every corner of the UK to opportunities across the world."Free ports will unleash the potential of our historic ports, creating jobs and regenerating communities across the UK. These hubs will also deepen partnerships around the world as we restore our economic and political independence."

Could free ports be used to avoid tax?

However, both Labour and Liberal Democrat opposition parties have expressed concerns that the free ports could be used as a new route for some businesses to avoid paying tax.John McDonnell, Labour's shadow chancellor, describes the move as the revival of a failed Conservative plan in the 1980s "designed to cut away at regulation and our tax base".He says, "There is very little solid evidence that so-called free ports create jobs or boost economic growth. This plan only represents a 'levelling-up' for the super-rich, who will use free ports to hoard assets and avoid taxes."

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Up to 10 free ports to be created in the UK

However, Mr Sunak dismissed such claims as "a red herring", telling Sky News on Monday that the operation of the ports would be subject to stringent regulations."It's worth pointing out that the EU is pretty much the only place in the world that doesn't use freeports, for example, there are over 200 in the US, employing several hundred thousand people, hundreds, billions of dollars of trade happens in those areas and that's replicated around the world," he said."The US head of customs and border protection told me a while ago he thinks their free trade zones are actually more secure than their regular ports, because they go through vetting with the customs bodies before they get given free port status, and they have dedicated agents in the free ports, so I think (tax avoidance fears are) a bit of a red herring."