Rishi Sunak discusses freeports announcement
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Chancellor Rishi Sunak announced eight freeport sites will be created in England as he unveiled his Budget on Wednesday. The special economic zones ensure firms are exempt from expensive import duties and tariffs. Ben Harris-Quinney, a former foreign policy adviser to the UK and EU, said freeports will make the UK “a more attractive prospect” and stated the zones were “inspired” by Britain being freed from the shackles of the bloc.
He told Express.co.uk: “The UK is already a major global hub for transit and finance, so much of the infrastructure is in place.
“Freeports will make trading through Britain a more attractive prospect.
“We have had freeports before, including when Britain was in the EU, but it is likely the government’s decision to vastly increase the number of freeports is inspired by Brexit, as Britain looks to become more competitive with bespoke trade deals.”
He added: “Freeports and enterprise zones offer a way for the government to promote growth in areas without major upfront investment.
“They allow Britain to enhance its attractiveness as a trading hub, a place where trade can freely pass through.”
Freeports existed in the UK until 2012 and are widely used across the US and Asia.
Mr Sunak said the special economic zones would “make it easier and cheaper to do business”.
Speaking in the Commons, the Chancellor said the plan was “on a scale we’ve never done before” and insisted although they are established globally – the UK will take a “unique approach”.
Teesside has been identified as one of the eight locations and Mr Sunak said it would help to drive the Government’s green agenda and create jobs.
Mr Sunak said: “In the past, it was known for its success in industries like steel.
“Now, when I look to the future of Teesside, I see old industrial sites being used to capture and store carbon; vaccines being manufactured; offshore wind turbines creating clean energy.”
He added the freeports would “see innovative, fast-growing businesses hiring local people into decent, well-paid, green jobs”.
Freeports are considered outside the country for customs purposes and therefore allows companies to import goods tariff-free.
Charges are only incurred once the goods are sold into the domestic market, or exporting the final goods without paying UK tariffs.
There are around 80 freeport sites in the EU, but they are accompanied with strict state aid rules and mostly used by member states who joined the EU after 2004.
Brexiteers argue being out of the EU will enable Britain to diverge from EU regulations on subsidies.
But, the UK could be hit with some barriers as part of competition rules outlined in the Brexit deal signed in December.
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Mr Harris-Quinney, Chairman of the Bow Group think-tank, added: “There is a concern however that they will make it easier for global corporates to avoid tax in the UK, and levelling the playing field between big corporates and small business should be an urgent priority for the government.”
The terms surrounding freeports are yet to be finalised and was a proposal first put forward by the Chancellor when he wrote a paper for the Centre for Policy Studies in 2016.
Mr Sunak, then a backbench MP, explained UK ports already account for 96 percent of all trade volume and 75 percent of trade value.
The report found the US already has 250 Free Trade Zones, which employs 420,000 people and handle £582billion worth of goods.
Across 135 countries there are also more than 3,500 Free Trade Zones that employ 66 million people
Mr Sunak wrote: “Upon leaving the EU, Britain will find itself with more opportunities for economic innovation than at any time in almost 50 years.”
He added: “Foreign Trade Zones are flourishing all around the world – except in the EU.
“Post-Brexit they could play an important role in signalling Britain’s openness to the world, as well as reconnecting the nation with its proud maritime history.”
East Midlands Airport, Felixstowe and Harwich, the Humber region, the Liverpool City Region, Plymouth, Solent, Thames and Teesside are all set to benefit from the post-Brexit status.
In a post on Twitter, Tudor Evans, Labour leader of Plymouth City Council, wrote freeport status could bring thousands of jobs to the city and more than “£100 million in investment”.
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