British Government are taking a bit of heat from Labour for contemplating the possibility to reinstate freeports for the first time since 2012. Port of Felixstowe and Harwich International have already sent in applications.
The BBC reports that the Port of Felixstowe and Harwich International have applied for freeport status under the UK government’s Freeports Initiative. If the status is granted, the two ports, owned by Hutchinson Ports, will become Freeport East.
It is hoped the new status will bring regional regeneration and help kick-start the UK’s post-Brexit economy. The Freeport Initiative permits companies to import and export goods without them entering the normal tax and customs channels, and in principle, the system can stimulate the local economy in and around the port area.
Freeports last existed in the UK in 2012 and backers believe the system will benefit the UK in a post-Brexit economy, far more than they did when Britain was part of the EU.
However, critics of the plan say freeports will be wide open to abuse, particularly by counterfeiters, who will be able to import an item, tamper with it, and then export it.
Shadow international trade secretary, Barry Gardiner said: “It is a race to the bottom that will have money launderers and tax dodgers rubbing their hands with glee…
“Freeports and free enterprise zones risk companies shutting up shop in one part of the country in order to exploit tax breaks elsewhere, and worst of all, lower employment rights.”
Eamonn Butler, sitting on the government’s new freeports advisory panel, thinks the zones will set the UK “on the right course” post-Brexit. He said they would, “provide a safe harbour for trade in turbulent times, and show that hi-tech hubs of enterprise, low taxes, deregulation, and trade without restriction can rebalance the economy.”
Freeport status offers no guaranteed formula for economic regeneration and only time will tell if the new initiative has any merit.