It was interesting to read in London International Shipping Week that the British public believe Freeports will have a positive economic impact but remain unclear on how they will work.
Is the lack of clarity around the set-up and operation of the Freeports, or how the Freeports are expected to benefit our economy?
Either way, here are some comments on the Solent Freeport which may help to demystify Freeports in general:
- The Freeports will comprise customs sites and tax sites, within which businesses will be able to benefit from generous tax reliefs, driving local investment.
- Although we know where the Freeports will be, the specific sites in each region have not yet been confirmed. This may explain the apparent lull in information but fear not, detailed business cases are being considered and the Freeports should be up and running this autumn.
- The Freeport customs and tax sites are geographically limited and the tax benefits are time limited to encourage early investment, so we expect to see businesses rushing to set up as soon as the sites are confirmed.
- "Freeport" is broad - air, sea and rail - think of all the goods passing through these channels. Over £77.5 billion worth of goods pass through the ports of Southampton and Portsmouth.
- The benefit from international trade and investment will not stop at the boundary of the customs and tax sites. There will be an immediate local impact from job opportunities. More significantly, with the Solent region being a global gateway for our nation, the increased productivity will support other regions which rely on connectivity to international markets through Solent ports. There is potential for government investment in freight links to the Midlands and the North from the Solent region.
- The Solent Freeport has strong relationships with the three local universities and should be able to support increased R&D funding in areas which affect our ports, such as artificial intelligence.
- New ventures provide an opportunity to do things in a new way - so we can expect Freeports to have strong ambitions for sustainable energy production and environmental protections. There is areal possibility of environmental innovation which could have a wider impact.
Hopefully this shows how the simple concept of a few tax benefits concentrated in a relatively small area can translate into the much wider positive economic impact expected.
For more information on Freeports please see:
The British public believes that freeports will have a positive impact on the economy but, according to new research from economic development and infrastructure communications specialists, Copper Consultancy, many remain unclear on exactly how they will work.