UK Plans 10 Free Ports in Preparation for Brexit

London's long-disused Royal Docks were revitalized with enterprise zone status and tax abatements, and the UK government cites this success as a rationale for new free ports (Royal Docks)

By The Maritime Executive 08-08-2019 02:00:17

Following through on a campaign promise, the government of UK Prime Minister Boris Johnson is planning to create up to 10 free ports across Britain after the UK exits the European Union. Free ports - the equivalent of Free Trade Zones in the United States - would allow businesses to import foreign goods into special delimited areas of the UK, store them on site or manufacture other goods with them, then re-export them to other countries without paying import tariffs. Port and airport authorities will have the opportunity to submit free port proposals in a competition for the 10 designated sites.

“Freedoms transformed London’s Docklands in the 1980s, and free ports will do the same for towns and cities across the UK. They will join onshore enterprise and manufacturing as the gateway to our future prosperity, creating thousands of jobs," said trade secretary Liz Truss. “We will have a truly independent trade policy after we leave the EU on October 31. I look forward to working with the Freeports Advisory Panel to create the world’s most advanced free port model and launch the new ports as soon as possible.”

The British Ports Association (BPA) welcomed the new plan and highlighted its own ongoing efforts. It also cautioned that some balance will be required in order to ensure that ports which lack free port status are not disadvantaged.

"Many of the benefits of a traditional ‘free port’ can be achieved in the UK through existing processes, but we look forward to working with Government on how a UK-specific model can boost sustainable development in and around ports and add real value," BPA CEO Richard Ballantyne said in a statement. "The British Ports Association is working with ports and airports on ambitious complementary proposals for ‘Port Enterprise & Development Zones’ that will support economic activity across a much wider range of ports all across the UK. These proposals contain a series of recommendations around planning, enterprise and the tax system that could be incorporated into or sit alongside a UK freeport model."

The opposition Labour Party objects to the plan, asserting that it will lead to money laundering, tax evasion, lower wages and the closing of non-free-zone businesses in a "race to the bottom." “The British people did not vote for this new administration and they certainly did not vote to see their jobs and livelihoods threatened in favour of gifting further tax breaks to big companies and their bosses," warned shadow trade secretary Barry Gardiner. 

The UK government is also taking steps to prepare Britain's seaports for Brexit's long-predicted customs delays and disruptions. The Port of Dover, which connects Britain's east coast with the EU27, is Europe’s busiest ferry port and is widely expected to experience challenges in the event of a "no-deal" Brexit. It handles 120 ferries and 90,000 passengers each day, and more commercial trucks roll across its docks than at all other UK ports combined.

"The UK will be leaving the EU on October 31, and we will be prepared whatever the circumstances. From port infrastructure works to the people working within them, we have set aside millions of pounds so that goods and transport will continue to move in a no-deal scenario," said Transport Secretary Gary Sharps. "This government is backing Britain, ensuring the country gets the support it needs to grow and grasp the golden opportunities in front of us as we leave the European Union."

As part of its preparations, the UK's Border Force is currently recruiting up to 1,000 new officers to help maintain security and support flows at the border. The new hires are on top of a further 900 officers who were recruited in 2018-19 to prepare for Brexit. In addition, more than 5,500 officers have been trained to ensure the border runs smoothly once the customs union ends.