Prime Minister Boris Johnson has set out on a mission to launch a number of brand new freeports in order to boost investment in our post-Brexit Britain. Hoping to create ports at up to 10 new locations, the PM is due to consult on the practicality of this ambitious undertaking – with a view to the first of these locations opening for business in 2021.
The idea behind these freeports is that they will be home to new free trade zones, and able to begin boosting investment at the end of the Brexit transition period at the start of next year. However, what exactly does this mean for the country?
Putting leadership plans into action
While it wasn’t exactly a headline-making strategy of his Conservative leadership campaign, the creation of free trade ports, or “freeports”, was part of Johnson’s bid to “Get Brexit Done” and boost the UK economy in the meantime.
The concept behind a freeport is simple. Goods entering the UK via these new zones would be exempt from trade tariffs unless they later left the UK’s domestic market. Similarly, inbound shipments of any raw materials would be tax-free up until the point they were manufactured into a final product.
Locations to be confirmed
While the term ‘freeport’ itself may immediately put your mind towards the coast, thereby narrowing the number of locations that would be established, intriguingly, freeports could also be created inland.
Former industrial heartlands of the UK, for instance, near to an airport, could benefit from the establishment of a freeport, which new Chancellor of the Exchequer, Rishi Sunak, has said could “supercharge” economic growth.
He added that freeports “will attract new business, spreading jobs, investment and opportunity to town and cities up and down the country.”
Opportunities and scepticism abound
Naturally, during Johnson’s leadership campaign, and since his election as Prime Minister, the plans for freeports have come under scrutiny from members of the opposition party – but also been received well by those who work in imports and exports.
For instance, with more imports coming into the UK, local haulage and delivery services could benefit from the extra volume of goods, in turn helping companies and self-employed individuals to secure more work. The hope is that this will lead to the general public having access to more products, and other businesses having access to raw materials.
The anticipated jobs created would also, in theory, be a boost for sectors such as construction, trade and insurance, including goods in transit insurance for the haulage and delivery drivers who transport goods from freeports around the UK.
The scepticism side of things, however, comes from a concern that freeports would be used by companies and individuals to hoard assets and avoid taxes – although this doesn’t ring true with Johnson’s vision for a supercharged economy.
Nothing will be concrete until the end of the transition period, early next year, but the concept of freeports in the UK could be just the boon required to kick off post-Brexit Britain. As with everything in the last few years, uncertainty remains, and we will have to wait and see, but one thing is for sure – Brexit is here, and plans are afoot for the future.