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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 March 2021 Budget announced eight freeports in England: East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth & South Devon, Solent, Teesside and Thames. The Teesside freeport began operations in November 2021 and the Thames freeport in December 2021.

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 £200 million of seed capital funding, depending on the submission of an outline business case.

Freeports in Scotland, Wales and Northern Ireland

The UK Government wants freeports in all four countries of the UK. The relevant policy areas are a mixture of reserved and devolved powers.

The UK and Scottish Governments have reached agreement that there will be two green freeports in Scotland. A prospectus is expected in March 2021 with winning bids announced in the summer.

No freeports have been announced for Wales or Northern Ireland so far.

Subsidy control

Now that the UK has left the EU, it is no longer subject to the EU’s state aid rules. 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 Government’s Subsidy Control Bill, creating a new domestic framework for subsidies, is currently going through Parliament. The state aid provisions in the Northern Ireland Protocol 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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