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UKMPG on making freeports a success

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Dry Bulk,

Tim Morris, Chief Executive of the UK Major Ports Group (UKMPG), said: “The UKMPG strongly supports encouragement for further investment and development of ports in the UK. Handling 95% of the UK’s exports and imports today, development of our sea ports is key for boosting the UK’s global trading capability and at the same time supports increasing jobs and prosperity in coastal regions all around the coast of the UK. The government has set out a freeports strategy and, done right, this should be an important part of achieving these important goals.”

Morris continued: “Whilst we support important parts of the government’s proposed approach, such as freeing up planning system brakes on responsible development and maintaining high standards, there are clear areas of concern. The government’s cap of 10 freeports lacks evidence and risks limiting the benefits of a freeports. It would be far better if the hovernment was guided by the number of compelling proposals rather than an arbitrary limit.

Also, government needs to be clearer what it’s priority is for the freeports strategy. Headline goals of creating national hubs for global trade and promoting regeneration and job creation are sensible. They are also linked. A strong underlying trading hub and a business-led approach with strong local support give the best chance of sustainable job creation both locally and nationally. History teaches us that solely ‘build it and they will come’ approaches have resulted in missed potential.

The major ports perspective is rooted in learning lessons from the positive impact that freeports, sometimes operated by UKMPG members, have had elsewhere in the world and from the successful experience of UK ports in attracting inward investment and developing port estates. But positive impact is not guaranteed. There are serious choices to be made and risks to be addressed.

With the UK leaving the EU, freeports have come back into focus. The UK has had the ability to establish freeports as an EU member - the UK had a total of seven freeports between 1984 and 2012 - and could indeed tweak duty rules now.

But the opportunity that now appears is to take a step change approach that this country has not done before, really harnessing the potential of a full package of measures including, but certainly not limited to, duty treatment.

Looking at examples where freeports have been successful, it is clear that long-term success depends on more than just adjusting tariffs. Although components of success need to be tailored to national and even local / sectoral need, the UKMPG believe the following are important parts of a ‘toolbox’ that should be available to freeports in the UK:

  • More agility to update use of locations and streamlined planning rules which set out upfront the criteria for development so locations can capture investment and jobs more quickly.
  • High capacity road, rail, energy and data links must be in place upfront, so businesses are connected and ‘ready to trade’ straight away and so local businesses and communities can also benefit.
  • Streamlined expedited import/export processes and provision of advice for approving the movement and storage of goods for import and export will help all businesses, particularly SMEs, trade with the world more.
  • Incentives both in terms of funding such as grants and property tax benefits and accounting treatments such as capital allowances are common across all nations battling to secure inward investment.
  • Aligning local sources of talent and innovation (universities, further education colleges, incubators and accelerators etc.) with the freeport, packaged with incentives for hiring and fostering local innovation, create both a stronger proposition to inward investors and delivers more benefits to surrounding communities.

Freeports are not a silver bullet for the risks of Brexit or ‘levelling up’ coastal communities. Particularly in terms of addressing the deprivation that exists all around the coast of the UK, freeports must be seen as one element of a wider ‘levelling up’ strategy. Just focusing major advantages on a small number of locations and casting aside ‘the rest’ risks make a difficult situation worse for a lot of communities. Practically, there are important measures (such planning reform and connectivity) being discussed in the context of freeports that could and should have broader applicability for ports and coastal communities as a whole.

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