The national association for ports has called on the Chancellor to create more than 10 free ports or risk distorting competition and leaving behind some coastal towns in the Government’s “levelling up” agenda.
A 10-week government consultation ends this week on plans to attract investment into post-industrial coastal areas by creating zones where goods do not face tariffs or other taxes usually slapped on imports, alongside other incentives including research and development tax credits, capital allowances, discounts on stamp duty and business rates, and local relaxations of planning laws.
However, in a letter to Rishi Sunak seen by The Daily Telegraph, Richard Ballantyne, chief executive of the British Ports Association, expressed the group of more than 400 ports’ “serious concern” that the proposals appeared to have “limited aspirations” to establish only up to 10 sites.
“The industry has strong reservations that this cap might distort competition and promote certain regions over others,” he said.
“The arbitrary number could mean that the Government picks winners and intervenes in the market.
“Choosing only a small number of ports to receive free port status seriously undermines any suggestion that all regions are going to be included in the Government’s regional growth agenda.
“There should be no doubt of the severity of this warning; some ports anticipate that there will be significant job losses for their area if they are overlooked while competing ports are awarded free port status.”
Mr Sunak has been a champion of free ports, having put his name to a 2016 paper by the free-market Centre for Policy Studies think tank, which advocated for free trade zones.
Tyne is one port bidding for free port status, based on its position as Britain’s second-largest export hub for cars.
Matt Beeton, the port’s chief executive, said: “Advanced manufacturing has been hit during the coronavirus pandemic and a free-trade zone covering the region’s high value clean energy and automotive sectors would give the North East a major boost.”
Mr Sunak is understood to be planning to start the bidding for towns, cities and regions to become free ports in his autumn Budget as part of efforts to overcome the effects of a recession that is expected to be the worst the UK has faced for 300 years.
Proponents also hope that free ports will boost “Global Britain” post-Brexit. The zones are expected to be fully operational within 18 months of the UK leaving the customs union and single market at the end of this year.
Mr Ballantyne added that “while we welcome the announcements around border funding and easements, these new changes are likely to create added pressure on the UK’s ports and logistics industry”.
It comes as a survey by the Institute of Directors (IoD) found that only a quarter of 978 business leaders said their organisations were fully ready for the end of the Brexit transition period.
Almost a third said they needed more details from the Government to be able to prepare. Companies in the financial sector were more likely to be ready than manufacturers.
“Directors want to take advantage of the opportunities that can come with an independent trade policy,” Jonathan Geldart, director-general of the IoD, said.
“With so much going on, many directors feel that preparing for Brexit proper is like trying to hit a moving target. A phased implementation period is in everyone’s interests, and direct financial support for smaller firms would be a huge boost at a difficult time.”