As the UK government prepares to roll out its new freeports policy to “turbo-charge” post-Brexit trade, a report released today by the International Trade Committee questions the real impact of the special trade zones on British exports.
The Conservative government made a commitment to establishing freeports – areas that are inside the geographic boundary of a country, but are legally considered outside the country for customs purposes – in its 2019 election manifesto, as part of wider plans for post-Brexit Britain.
During his budget speech last month, Rishi Sunak, chancellor of the exchequer, announced eight freeport locations in England, saying that they would “encourage free trade and reinforce [the UK’s] position as an outward-looking, trading nation, open to the world”.
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Tilbury one of eight freeports announced by Rishi Sunak
THE sites for the eight freeports in England have been revealed as part of the Chancellor’s Budget.
Pledged in the Conservative Party 2019 manifesto, Rishi Sunak announced that Tilbury, which on the Thames, will be one of the eight, with the others being East Midlands Airport, Felixstowe and Harwich, the Humber region, the Liverpool City Region, Plymouth, Solent, and Teesside are all set to benefit from the post-Brexit status.
Mr Sunak said the “special economic zones with different rules to make it easier and cheaper to do business” would come with simpler planning, cheaper customs – with favourable tariffs, VAT or duties – and lower taxes, with “tax breaks to encourage construction, private investment and job creation”.
Live as Rishi Sunak leads national briefing from Downing Street
The Chancellor used his Budget to set out a £65 billion spending package this year
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The briefing comes hours after Mr Sunak announced his Budget for the next year.
Mr Sunak set out plans to freeze income tax thresholds and increase corporation tax as he began the process of repairing the nation’s finances following the coronavirus crisis.
The Chancellor used his Budget to set out a £65 billion spending package this year and next year to support the economy as it recovers from the pandemic.
The announcement, which could potentially boost investment, comes only weeks before the local and mayoral elections, with the Tories looking to hang on to the Tees Valley mayoral seat, currently held by Ben Houchen, in May.
Chief Secretary to the Treasury Stephen Barclay, quizzed about freeports by MPs last month, said he had expected the locations to be announced in the spring , with the first freeports ideally . operational by the end of the year .
The freeport model works by allowing companies to import goods tariff-free and only paying once it is sold into the domestic market, or exporting the final goods without paying UK tariffs.