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UK Government policy on freeports

The Conservative Party Manifesto included a commitment to create up to ten freeports around the UK. According to the Government, freeports are intended to be national hubs for global trade and investment across the UK. They also aim to promote regeneration and job creation as part of the Government’s policy to level up communities. Finally, the Government sees them as hotbeds for innovation.

The 2021 Budget announced the locations of eight freeports in England: East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth & South Devon, Solent, Teesside and Thames. These are expected to start operating later in 2021, subject to the successful completion of their business case assessments.

Freeports will benefit from incentives relating to customs, tax, planning, regeneration, infrastructure and innovation. The successful bidders in England will be able to access a share of £175 million of seed capital funding, depending on the submission of an outline business case.

Freeports in Scotland, Wales and Northern Ireland

The UK Government has said that it wants the whole of the UK to benefit from freeports. The policy areas underlying freeports are, however, a mixture of reserved and devolved powers. The Scottish Government has brought forward proposals for green ports.

State aid

Now that the UK has left the EU, it is no longer subject to the EU’s state aid rules. The Government is consulting on the future UK subsidy regime. Nevertheless, the UK remains bound by World Trade Organization rules on subsidies and its commitments under free trade agreements, including that with the EU. The state aid provisions in the Northern Ireland Protocol, agreed as part of the Withdrawal Agreement with the EU, may have implications for freeports in Northern Ireland.

Criticisms of freeports

Critics of freeports point to the risk that they will simply transfer business away from other areas of the UK without increasing the overall size of the economy. There have also been concerns about risks relating to money laundering and tax evasion.

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