Post-Brexit Britain is planning ten new free port zones

Reports from ‘Liverpool Business News’ are this morning suggesting that the Government is planning to create 10 new free port zones around the UK. Liverpool looks set to become one of the destinations and could see a £739m annual economic boost as well as the creation of up to 12,000 jobs. The creation of a freeport around the Port of Liverpool could add an extra £739m to Liverpool’s economy every year, this is equal to £1,500 for every household in the city.

This morning the Government has announced a 10-week consultation on freeports, as part of this, it will invite towns and cities across the UK to bid for the right to create 10 free trade zones. The locations will be announced by the end of the year with the first zones up and running in 2021. Freeports are ports where normal tax and customs rules do not apply. These could also take the guise of airports as well as maritime ports. At a freeport, imports can enter with simplified customs documentation and without paying tariffs.

The Port of Liverpool was a free port until 2012 when the zones were abolished by the then coalition Government. The idea has the full support of the region’s £4bn maritime sector. A report published in 2018 by UK consultants Mace claimed that integrating Free Ports with enterprise zones would add £9bn a year to the Northern economy. The report identified seven UK locations as being ideally placed to benefit, Liverpool, Immingham & Grimsby Ports, Hull Port, Rivers Hull & Humber, Tees & Hartlepool, Tyne and Manchester Airport.

EU state aid rules generally exclude EU governments from providing support to certain companies over their competitors. This can limit the abilities of member states setting up free ports with tax incentives, as this would essentially provide support for businesses within free ports compared to those outside of them.