Apparently 30 air and sea ports have applied to be one of the 10 free ports the Government is planning. This is not the triumph some are claiming.
Frankly if you run a port of any kind in the UK, you’d be mad not to apply, because your competitors certainly will. You can hardly see Heathrow turning down the chance to attract business to its site, with huge tax breaks, and leaving Gatwick, Stansted or Luton with an open goal. Handing out tax breaks is always popular, until someone else has to pay for it. Nor does it have much to do with Brexit nor does it make much economic sense.
Free ports are allowed in the EU, there are dozens of them, although it is probable that the EU would like to get rid of them as they are economically distorting, tax havens; that also allow some very dodgy characters to hide their wealth. Some have art warehouses where multi-million pound pictures change hands without anyone ever knowing, or the art ever moving.
But the biggest argument against free ports is that companies and businesses that would come to a country anyway, or are even already there, move into the tax free area and so the Government losses vast amounts of revenue for no good reason. Certainly developing countries can use them to kickstart growth but the UK is highly developed and an attractive place to do business. Why then does it need to set up free ports at all?
https://jonty.substack.com/
Well Jonty there are about 80 Free Ports across the EU. If our EU competitors are having Freeports how can you tie our own hands behind our backs? So inviting applications for 10 potential sites in the UK is no great surprise it makes sense. So there are less taxes paid but we have a wider selection of goods to sell and buy on the World stage. We need jobs and for Global Britain to compete well.
For example we need to discourage Chinese container ships dumping containers destined for the UK in Rotterdam (for us to collect and pay additional costs). Therefore making a Chinese owned container site a Freeport (in Felixstowe) will hopefully encourage the Chinese ships to dock and unload directly.
Heathrow was a major airport in the EU but now it has to compete with other major airports in Europe from a weakened position of not being in the EU. We need to encourage international air freight into Heathrow still so it would make sense to have a Freeport area in West London attached to Heathrow. Freeports have to be major points of exit and entry for goods and there has to be a fair spread of these across the UK, but the business logic has to be overwhelming in supporting British business on a World stage by volume.