Heathrow, Gatwick and East Midlands apply for UK Freeport status
Heathrow, Gatwick, East Midlands and Bournemouth airports have applied to the government for Freeport status. The period for applications closed on 5th February. There are 33 applicants, and the government is expected to announce 10 – for all the UK – by “the spring” (ie. probably by June). The scheme comes following Brexit and as the government looks to create new trade links. Freeports are sites where normal tax and customs rules do not apply. They can be airports or maritime ports, and can be made up of a consortium of both as long as all sites are within a similar geographic location. Companies using Freeports will be able to import goods without paying tariffs, process them into a final good and then either pay a tariff on goods sold into the domestic market, or export the final goods without paying UK tariffs. Areas given Freeport status will also benefit from a wide package of tax reliefs, including on purchasing land, constructing or renovating buildings, investing in new plant and machinery assets and on Employer National Insurance Contributions. There were 7 freeports between 1984 and 2012 (eg. Liverpool and Southampton ports), after which UK legislation changed and their use was not renewed.
Heathrow and East Midlands apply for UK Freeport status
9th Feb 2021
By Damian Brett (Air Cargo News)
Heathrow Airport and an East Midlands consortium have applied for Freeport status in the UK.
The government closed the application period for Freeport status on Friday, with 30 bidders thought to have submitted proposals.
Companies using Freeports will be able to import goods without paying tariffs, process them into a final good and then either pay a tariff on goods sold into the domestic market, or export the final goods without paying UK tariffs.
Areas given Freeport status will also benefit from a wide package of tax reliefs, including on purchasing land, constructing or renovating buildings, investing in new plant and machinery assets and on Employer National Insurance Contributions.
In total, the government intends to create 10 Freeports. The scheme comes following the country’s exit from the European Union and as the government looks to create new trade links.
The East Midlands bid for Freeport status was submitted by a consortium led by the two local enterprise partnerships, including East Midlands Airport.
The proposition is based around the East Midlands Airport Gateway Industrial Cluster as well as two other industrial sites in the region.
Clare James, East Midlands Airport’s managing director, said: “We’re delighted to be part of a regional Freeport bid that, if successful, could create thousands of jobs for local people. East Midlands Airport (EMA) is a key regional and national gateway for Britain’s exports and imports.
“Assets like EMA will have a key role to play in helping the Government fulfil its ambition of a ‘global Britain’ especially as the country strikes trade deals around the world. As the port of entry and exit, we bring to the Freeport bid, along with our road haulage and rail operating partners, the connectivity that is one of this region’s unique strengths.”
Heathrow Airport said Freeport status will allow businesses, customers and supply chains to capitalise on international connections and routes, whilst reducing administrative burdens and controls.
It points out that in 2019 34% of UK cargo by value came through the airport and that 75% of all the country’s long-haul connections are from the airport.
“Our vision is that the UK – and its businesses – should be as well connected to cities in India and China as it is today with the US – with multiple, daily, year-round flights to a long list of cities across these countries complementing a wide range of other global routes,” said Nigel Milton, director of communications, Heathrow Airport, in a letter to government to support its application, supported by several business groups.
“This vision is delivered by utilising our unique long-haul network, supported by guaranteed domestic connections into Heathrow from regional airports and all aligned with potential Freeport sites in Teesside, Belfast, Inverness, and Newquay. A joined-up approach would allow the whole of the UK to connect direct to global growth opportunities and help deliver on the Government’s commitment to levelling up the UK.”
He added: “Heathrow believes it has a key role to play in both the development and implementation of the UK’s Freeport policy, and the economic recovery that this policy will be vital in supporting.
“An Associated Freeport at Heathrow provides an opportunity to accelerate the recovery and support regions around the UK, and boost industries and businesses across our local communities that have been negatively impacted by the pandemic. Just as manufacturing and high-tech clusters have been developed around Heathrow in West London and the South East, our position as a connecting port enables the specialisms from other sites around the UK to reach opportunities throughout the world.”
Crawley MP backs Gatwick Freeport bid
8th February 2021
Henry Smith MP has reiterated his backing for the proposed Gatwick Freeport as the bid is officially submitted to the Government earlier today (Friday, 5th February).
Proposals sent to ministers by the Coast to Capital Local Enterprise Partnership would place the ‘Gatwick Freeport’ in the Manor Royal Business Improvement District in Crawley.
With Gatwick Airport traffic declining by 93% due to the devastating Covid-19 pandemic impact, the Crawley MP, who last year established and continues to chair the Future of Aviation All-Party Parliamentary Group, has thrown his support behind the proposals.
“Gatwick along with Manor Royal are important drivers for the local economy and employment which also represents a significant net contribution to the UK as a whole.
“However the Covid-19 pandemic is at real risk of levelling down the area, therefore with the now opportunities of global Britain, a Freeport based on Gatwick and Crawley’s Manor Royal business district has the real potential to build back better, stronger and more diverse, enhancing regional and national wellbeing.
“This is a plan I’ve been pleased to champion in Parliament and I whole-heartedly back the bid!”
Last month in a question to the Exports Minister, the Crawley MP urged the Government to support the Gatwick Freeport proposal.
Freeports are an important part of the Government’s post-Brexit agenda for international trade, with successful bids benefiting from generous tax reliefs, simplified customs procedures and wider government support.
These new hubs of business and enterprise will create thousands of jobs, regenerating communities and turbocharging Britain’s growth.
The project reiterates the importance of Crawley to the local and wider economy. The Manor Royal Business Improvement District provides 30,000 jobs (40 per cent of Crawley’s total employment), with the town providing 45 per cent of all employment in the Gatwick Diamond.
The Manor Royal Business Improvement District is already home to a number of high tech, high innovation businesses such as Thales, LG and Elekta.
Freeport status would support the safeguarding and creation of jobs, and help the recovery of the aviation sector.
The Local Enterprise Partnership and Manor Royal have secured the support of not only the local MP, but West Sussex County Council and Crawley Borough Council as well. Proposals could be developed immediately if the bid is approved, leading to big rewards for the local economy.
The Government are expected to announce 10 successful bids by spring of this year.
Could the freeport revolution turn the tide in the East of England?
By Angus Williams
February 10, 2021
The Port of Felixstowe is a major part of the Freeport East bid – Credit: Adam Boughey
A tax-free port in East Anglia could be the “silver bullet” the region’s economy needs to close the gap on the rest of the country, according to man behind the project.
It is estimated that a freeport in the East would create 13,500 jobs and secure up to £650million of investment for the region.
Freeports are exempt from import taxes on goods coming into the area which are not destined for the UK – effectively treating the area covered by the freeport as if it is not part of the country for tax purposes.
In theory this would make the area more attractive to manufacturing businesses because they could import materials tax-free before exporting their products elsewhere.
Put simply, the success of this bid would have huge reverberations from north Norfolk to Essex, Lowestoft to Bury St Edmunds.
The Freeport East bid is focussed on Bathside Bay at Harwich and the Port of Felixstowe Logistics Park but includes proposals for tax and customs sites inland.
These sites include the planned new development at Gateway 14 near Stowmarket and Port One in Great Blakenham.
First the government needs to grant the licenses and there are only 10 up for grabs – seven in England and one each in Scotland, Wales and Northern Ireland.
A decision is expected from the Treasury in the March 3 Budget and, if successful, the first ground could be broken on Freeport East within 18 months.
According to George Kieffer, chairman of the partnership which submitted the bid, Freeport East has a good chance of being accepted.
“I personally feel quite confident,” he said. “The reason I feel so confident is that the principal criterion the government has given is to ‘level up’ areas of deprivation.
“When we talk about ‘levelling up’ it is not just about the Red Wall seats in the north. There is often a misapprehension that in the East and the south-east we’re all so wealthy that we don’t need anything.
“We have the most deprived ward in the whole country, Jaywick, near Clacton, on our patch and we also have areas of Felixstowe and Ipswich that have significant deprivation levels.
“When you look at the average wages in Ipswich they are lower than they are in Liverpool.”
According to Mr Kieffer, the economic benefits will not just be confined to east Suffolk and north Essex.
“This could be the silver bullet for the East of England’s lagging economy,” he said.
It is hoped that government infrastructure spending will follow a successful bid.
Mr Kieffer highlighted the A120 in north Essex, the A14 and the Ely railway junction as areas where improvements could be made to improve freight traffic to the Midlands and the north.
While the tax sites all have to be within 30 miles of each other — a distance which only extends as far north as mid Suffolk — it is hoped that the freeport will also attract more investment elsewhere throughout the region.
Mr Kieffer said: “I see the benefits of this extending way beyond Felixstowe and Harwich and up into Norfolk.”
In part these wider benefits will be down to the freeport’s focus on innovation among its manufacturers.
A large part of the freeport’s bid is centred upon the East’s burgeoning energy sector and the benefits that can bring to the region as a whole.
“We want to see a focus on zero carbon, by also using new types of fuel like hydrogen. The port of Felixstowe itself has committed to becoming carbon neutral by 2030.
“The beauty is that it ties us in with the energy coast. Sizewell B has a hydrogen generator already there. If Sizewell C goes ahead, they are committed to making more energy there and the freeport would be one of the obvious users.
“This hydrogen technology has applications in agri-tech and agriculture which is a very important sector throughout East Anglia.
“This is not about putting more business through the ports, in terms of freight. It is about those ports to be a focus for additional employment, sometimes in different areas.
“For instance, it could be in offshore wind, or in the energy sector more generally.”
Freeport East will also work closely with the region’s universities and colleges.
“We need to make sure that when the jobs arise, our colleges and universities, and that includes University of East Anglia, are actually ready to supply the workforce because the world is not going to standstill,” Mr Kieffer said.
“I think the government wants this to happen quickly, not only to capitalise on our finally leaving the EU, but also as a recovery from the economic impact of the pandemic. We’re probably looking at a five year time horizon.
“There is a lag between the provision of those skills and the workforce being ready.
“That’s why it’s important that we start working with universities and colleges now. Rather than wait until the businesses arrive and says ‘right, where are my workers?’.”
C-J Green, Chair of New Anglia LEP, said: “As our region looks to recover from the Covid-19 pandemic and adjust to the changes following the UK’s exit from the EU, it is vital that major infrastructure projects are supported to deliver the investment and regeneration which will be needed over the coming years.
“We believe that Norfolk and Suffolk, with our significant coastal communities and deprivation, is a prime candidate for support through the Government’s Levelling Up agenda.
“The project would deliver thousands of jobs, fantastic opportunities for our local supply chain and bring long-term economic benefits.
“Freeport status would provide a catalyst for job creation, new economic activity, and additional development in our region.
“It would bring new specialised production and manufacturing jobs, as well as logistics, research and development and support service activities, providing immediate job opportunities in emerging and expanding industries.”
What is a freeport?
Freeports are sites where normal tax and customs rules do not apply.
They can be airports or maritime ports, and can be made up of a consortium of both as long as all sites are within a similar geographic location.
At a freeport, imports can enter with simplified customs documentation and without paying tariffs.
Businesses operating inside designated areas in and around the port can manufacture goods using the imports and add value, before exporting again without ever facing the full tariffs or procedures.
If the goods move out of the freeport into another part of the country, however, they have to go through the full import process, including paying any tariffs.
Freeports are not a new creation – the UK had freedom to create them when it was part of the EU.
There was a total of seven freeports between 1984 and 2012 such as Liverpool and Southampton, after which UK legislation changed and their use was not renewed.
Who else applied?
A total of 33 bids have reportedly been made for freeport status.
The details of all of which have not been announced.
More bids are yet to come in, with the governments of Northern Ireland and Wales not yet opening its application process.
Of those which are confirmed, bidders include Teesport, Liverpool City Region, the Great Western Freeport made up of Royal Portbury and Avonmouth Docks and Humberside.
On top of this airports are also eligible for applications with Heathrow, Gatwick and East Midlands Airport also confirming they are in the running.
Bournemouth International Airport has also confirmed it has submitted a ticket for freeport status in partnership with Poole port.
In the capital London Gateway, a container port on the Thames, has also submitted a joint application with commodities port Tilbury, alongside carmaker Ford Dagenham.
The initial flurry of interest will leave many disappointed with just ten spots to fill across England, Scotland, Wales and Northern Ireland.