Contributors
Peter Snaith, partner and manufacturing sector head, says:
“The Chancellor’s ‘emergency budget’ has been a cause for much anticipation by those in support of UK Freeports. Truss has been vocal in her backing of them prior to and throughout the recent Tory leadership race, with much talk around her vision for ‘full-fat freeports’.
“Extending the package of benefits at freeport tax sites to a larger footprint of nearly 40 new investment zones across more parts of the country is very good news to unlock growth across the UK. We await further details, but the Chancellor is effectively extending the package of tax incentives already available on 'tax sites' that were created at the eight freeports under the government's existing freeport policy. This is not a U-turn. It is a welcome development that will extend the benefits already available, which are beginning to attract manufacturers and other inward investors onto freeport sites.
“Until now, businesses and communities in the hinterland surrounding our freeport sites have sometimes struggled to appreciate how they will benefit from the trickledown effect of new businesses and high-quality jobs that are beginning to come into the area. The developments today mean that reliefs from stamp duty, employer national insurance contributions and capital allowances and other benefits that are already available inside the freeport boundary will now also be available in the surrounding areas, enabling direct access for supply chains, support services and social infrastructure developers to the benefits which can encourage and support new investment.
“Sceptics continue to flag the risk of the policy simply moving investments around, with existing businesses relocating to enterprise zones rather than creating new jobs. The investments we are beginning to see into freeports would indicate this is, or was, unlikely to be a widespread issue. However, concerns around this will be heightened with many more areas benefitting from the package of incentives available.
“It is very positive that so many new areas across the country are now set to benefit from the package of incentives, but it is important that ports remain central to the initiative. As the former chancellor's original freeport proposal identified, freeport jobs are created in areas where economic need is higher. When the freeport concept was first conceived, 17 of the UK’s 30 largest ports, were in the bottom quartile of Local Authorities when ranked by the ONS’ Index of Multiple Deprivation and three quarters were in ‘below average’ Local Authorities. Progress has been slow but investment around our ports is making a difference and keeping ports (including seaports and airports) at the centre of government policy can deliver the double whammy of attracting inward investment whilst also boosting exports and the positive balance of trade.
“Whether policy is linked to freeports, levelling up or some other slogan, the continued investment in supercharged enterprise zones at our hubs for cross border trade coupled with the investment in transport and infrastructure can serve to rebalance our national economy whilst also boosting international trade and supporting innovation that our manufacturing sector and other sectors need to remain globally competitive.”
