Eight freeport sites in England will begin operations from late 2021.

UK freeport locations

freeportWhat is a Freeport?

In the Budget Rishi Sunak announced eight freeport sites in England, these will begin operations from late 2021.

A freeport is a zone designated by a government with certain allowances to boost the economy, created to encourage economic activity in an area. Businesses are encouraged to open in these zones, in turn creating more jobs. The aim is to reduce administrative burdens and tariff controls, provide relief from duties and import taxes, and ease tax and planning regulations.

Freeport can be airports as well as maritime ports. The freeport model works by allowing companies to import goods tariff-free. Taxes are only paid if the goods leave the freeport and are moved elsewhere in the UK. Otherwise, they are sent overseas without the charges being paid. Thereby offering a physical buffer for imported goods between the land border and duties border, meaning less tax regulations and levies and imposed on goods entering and leaving the country.

Freeports are said to offer simplifications to the normal customs processes on imported goods. As well as allowances for lower taxes and customs duties i.e. favourable tariffs or VAT.

Where will the new freeports be?

UK freeport locations The locations of England’s eight new freeports are:

  • East Midlands Airport
  • Felixstowe and Harwich
  • Humber region
  • Liverpool City Region
  • Plymouth
  • Solent
  • Thames
  • Teesside

Each one can be up to 45km (27 miles) across.

Freeports have existed for centuries, The UK had seven freeports between 1984 and 2012, including Birmingham, Cardiff, Liverpool, Southampton and the Port of Tilbury. There is a still a freeport on the Isle of Man, and in Europe there are about 80 freeports, including Copenhagen in Denmark and Bremen in Germany. There are estimated to be 3,500 freeports around the world, employing 66m people.

Will there be more freeports?

Further announcements are still expected on freeports within the devolved administrations, with the manifesto committing to creating 10 in total in the UK.

How are they linked to Brexit?

Freeports have been suggested as a way to boost international trade and it would have been more difficult for the UK to establish freeports under EU law, particularly if the tax benefits went too far.

Now that the UK has left the EU, some Brexit supporters say the UK can adopt a more generous freeport policy. For example, the government could give businesses more financial help.

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