Budget 2021: Infrastructure
Freeports ‘will unlock private investment’
Port of Cromarty hopes to become a freeport
The first eight freeports in England ‘unlocking billions in private investment’ have been named and the Chancellor said talks will take place with the devolved nations on further locations.
Describing the initiative as something on a scale “never done before” he said freeports would bring investment trade and jobs to replace the industries of the past with green, fast-growing new businesses.
They will “reinforce our position as an outward-looking trading nation” and represent “a policy we can only pursue now we are out of the European Union”.
He added: “Freeports are special economic zones with different rules to make it easier and cheaper to do business.”
He said they were well-established internationally but Britain would take a “unique approach” with simpler planning and infrastructure funding to improve transport links, cheaper customs and favourable tariffs and lower taxes.
He said freeports would be an “unprecedented economic boost right across the United Kingdom”.
The eight in England will be at East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool, Plymouth, Solent, Thames and Teesside.
He said they would unlock billions of pounds in private investment.
Scotland’s trade minister Ivan McKee, initially opposed to the idea, has asked the Chancellor to match Scotland’s plan for green ports with commitments to tackling issues such as pay and conditions.
Lucy Sutcliffe, head of customs at Azets, the UK’s largest regional accountancy and business advisors to SMEs and Top 10 accountancy firm, said: “It is great news that eight freeport locations have been announced as these reductions in custom duties and VAT will help stimulate local and regional economies and could provide solutions to EU/UK distribution problems.
“However, further detail is needed on how it will work in practice, the levels of support that will be available and which types of businesses will benefit.”
Donald Boyd, Partner and SME specialist added: “The announcement of new freeports in the UK coupled with the investment allowance of 130% will make the UK more attractive for inward investment.
“This will provide strong short term tax relief for inward investors to set up in the UK. This in turn may provide additional international jobs to freeport areas of the UK.”
Mr Sunak also announced the establishment of a new infrastructure bank, which will be based in Leeds with the aim of driving at least £40 billion of green investment.
“Beginning this spring, it will have an initial capitalisation of £12 billion and we expect it to support at least £40 billion of total investment in infrastructure.”