The Solent Local Enterprise Partnership (LEP) were celebrating this week as it was announced, during the budget, that their bid for a freeport was one of eight successful bids from around 30 submitted across England.
A freeport is a defined area in which goods imported from abroad aren’t subject to the usual taxes (or tariffs). Tariffs are only paid if the goods leave the freeport and enter the UK.
In his Budget, the Chancellor of the Exchecquer, Rishi Sunak said the new freeports would have ‘different rules’ including simpler planning, better transport links and favourable customs rules. They will also have tax breaks to encourage construction, private investment and job creation.
The Solent LEP believes their freeport plans could potentially attract £2 billion investment and create up to 25,000 local jobs. They say their proposals focus on some of the Solent areas’ most disadvantaged communities to create high quality employment space, with investment targeted at state-of-the-art growth sectors. They have not made public any detailed plans.
Chairman of the Solent LEP, Brian Johnson, said: “The Solent has a very proud maritime heritage, but we don’t live in the past. Today’s announcement represents the start of a new era for the Solent as we begin our work with government to create jobs, drive innovation and build sustainable, long-term opportunities now and in the future. The wide coalition of public and private partners, brought together by the LEP, puts us in the strongest possible position to bring this vision for a Solent Freeport to reality.”
Critics of freeports say that they do not create additional employment and simply move jobs from surrounding areas into the freeport zone, at a cost to the taxpayer in lost tax revenue.
Labour’s shadow chief secretary to the treasury, Bridget Phillipson, said last month: “It’s clearer than ever that freeports aren’t the silver bullet for our economic recovery that Rishi Sunak claims they are. By reducing many tariffs on goods across the entire UK after Brexit, the Government has undermined its own case for freeports.”
Southampton was the first freeport in the UK from 1984 until 2012, when the licences allowing the five remaining ones to operate, were not renewed by David Cameron’s government.