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Freeport plans still face hurdles

Chairman of the all-party Parliamentary Freeports Group says freeports could boost employment in the UK’s deprived coastal regions. But to make that happen means convincing the Treasury that lost customs revenues will be replaced

UK needs to remove itself from any customs arrangements with the European Union before freeports can become a meaningful option

THE freeports plan for the UK has been given a boost by the establishment of the Freeports Advisory Panel, which had its first meeting last week.

But there are still challenges ahead, not least the government’s difficulty in extracting the UK from the European Union.

Martin Vickers, chair of the all-party Parliamentary Freeports Group, said there was a real push towards freeports in government, and support from the prime minister.

“But we still have to win the battle with the Treasury,” he told a London International Shipping Week event hosted by the British Ports Association. “I am hopeful that the advantages that freeports can generate will permeate throughout government.”

With 96% of all UK trade by volume, and 75% by value, passing through ports, freeports offered an opportunity to capitalise by opening up the country to world markets to a level never previously possible, he added.

“Not having freeports puts us at a serious disadvantage and we risk slipping behind our partners and competitors,” said Mr Vickers.

Freeports would, by default, target areas that had high unemployment and deprivation and as such were an opportunity to ensure northern coastal communities in the UK were not left behind, he said.

“Bids for freeports must show that new jobs and investment will be created, not just simply displaced from other areas, and income created from new jobs and business will offset the loss of revenue to the Treasury,” added Mr Vickers.

But it was impossible to talk about freeports without raising Brexit, he said.

“It is clear that the UK must be completely free of the EU’s anti-competition laws and rules on state aid if we are to make freeports a success,” said Mr Vickers.

“This makes the customs of our exit negotiations vital. By remaining in the customs union it is highly likely that we would be too closely intertwined with the EU to strike a truly independent trade policy, which would hamper the opportunities available to our ports.”

Speaking at the same event, Port of Tyne chief executive Matthew Beeton called for the freeport concept to be widened into a wider industrial strategy.

“We do not want to stop with a port just being a freeport, with the border effectively moving from the quayside to the port boundary,” said Mr Beeton.

“We want to extend that using virtual corridors to other areas of economic interest in the region.”

A “virtual freeport” would allow ports to be successful but also perform the responsibility for economic growth in their wider region.

“We are the catalyst for growth and employment in the northeast,” he said. “The port, our customers and the wider supply chain provide hundreds of thousands of jobs to the region.”

By using technology, the virtual freeport could connect, for example, the Nissan plant in Sunderland and the International Advanced Manufacturing Park, along with other ports in the region as well.

“The supply chains at Nissan have parts that pass through the UK border up to three or four times. Our freeport would be, in essence, the connectivity of the supply chain that makes the northeast work.”

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