Could the Government’s proposal to introduce free ports be a boost for the region’s economy?

Published by kind permission of North East Times

Developing Consensus is committed to supporting proposals that would improve the chances of attracting inward investment and therefore jobs to the region.

While talk of free ports is in its early stages, the fact that two of the ten free ports proposed across the UK are in the North East suggests for once the region is in the spotlight.

The Government wants “to turbo-charge growth and ensure towns and cities across the UK benefit from Brexit trade opportunities” and its proposal will invite ports and airports across the UK to bid to become one of up to ten free ports.

Free ports function as hubs for business and enterprise for both manufacturing and services trade. These could be free of unnecessary checks and paperwork and include customs and tax benefits. These zones reduce costs and bureaucracy, encouraging manufacturing businesses to set up or re-shore. The most successful free ports globally attract businesses and create jobs for local people through liberalised planning laws. Citing very successful free trading zones around the world, if the UK model is implemented as successfully, it could have a significant economic impact.

Tees Valley Mayor Ben Houchen has championed free ports, and a report commissioned by his authority found a free port could provide a significant boost to his region and the UK area’s GDP. Other ports which have expressed an interest in the bidding process include the Port of Tyne, Milford Haven and London Gateway.

Looking specifically at Port of Tyne, one of the UK’s major deep-sea ports and a vital trading gateway to global markets, it is an advocate of free ports, believing that they “present the best compromise arrangement if the UK leaves the EU.” The Port of Tyne is handling 4.5 million tonnes of cargo each year, operating one of Europe’s largest automotive terminals; its operations provide solutions to some of the UK’s biggest blue-chip companies. The port is championing a concept for free ports that has proved successful in other areas of the world, one that establishes multi-site free port designation zones supported by virtual corridors, or ‘virtual free ports’, that seek to benefit manufacturing with complex supply chains. The concept will bring the most benefit to advanced manufacturers in the region who need fast connections to global markets.

The virtual free port would sit outside of UK customs and offer the ability to avoid tariffs until the point of export and significantly reduce the complex process of administration of customs, helping large organisations and indeed, SMEs.

The Government’s free ports advisory panel now has the opportunity to consider the complex needs of manufacturers like Komatsu, Nissan and others and create solutions that safeguard businesses and jobs while stimulating further foreign investment into the wider region. A free port has the potential to supercharge regional growth by unlocking opportunities in new and existing supply chains.

Developing Consensus, through its collaboration between professional services, finance and the construction industry to local authorities, strategic boards and regional membership organisations, supports the free port proposal as it is a clear sign-post to encouraging growth and progress in the North East.