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Martin Vickers MP: New freeports will lead the Government’s Levelling Up agenda

Martin Vickers MP
June 24, 2021

At the Budget in March, the Chancellor announced the UK's first eight freeports: East Midlands Airport, Felixstowe & Harwich, Humber, Liverpool City Region, Plymouth & South Devon, Solent, Teesside and Thames. It cannot go unnoticed that the location of these freeports is strategic and a clear representation of the Government's 'Levelling Up' agenda, writes Martin Vickers.

Freeports will be the most immediately visible change that occurs as a result of our leaving the European Union. As an island nation, we have always been reliant on ports for trade and it was clear that there was an opportunity to implement a policy that would turbocharge our ports by discarding red-tape, bureaucracy and costly tariffs thereby creating jobs and boosting local economies. More importantly, given the location of our ports, this policy would, by default, target areas of high unemployment and deprivation. These tend to be found in rural and coastal communities which have weak or no links with the UK's large cities which have benefitted from recent financial support from central government.

Various estimations of the impact of freeports have been conducted, for instance, former Treasury economist Chris Walker found that declaring several northern ports as freeports (Grimsby & Immingham, Hull, Liverpool, Manchester Airport, Teesport and Port of Tyne) would boost trade by £12 billion and create 150,000 jobs in the North. This represents more than 80,000 new highly skilled jobs and £4.7 billion extra in the Yorkshire and the Humber alone. Ultimately, the impact will depend very much on the discussions that are now taking place between government and the successful bidders. These discussions will determine exactly what each of the eight freeports will look like, what financial incentives they will benefit from, what funding they will require and, ultimately, how attractive they will become. Regardless of the detail, the direction of travel is clear: freeports will boost jobs and investment in the areas that need it most.

Projections show that freeports could close the North-South productivity gap by 15 per cent which would be a welcome step to rebalancing the UK economy. High skilled jobs could be created in some of the most deprived parts of the country. Furthermore, this can be done through organic growth, providing businesses with the tools they need to drive their own success and, consequently, that of the country. They are an essential part of the levelling up agenda.

The point cannot be made often enough that there are already 3,500 freeports in operation around the world but, until later this year, not a single one in the UK. It is good news that this disadvantage, which posed a serious risk of the UK slipping behind some of our trading partners and competitors, has been put right. While critics will highlight that freeports are technically permissible whilst in the EU – we had them in the UK until 2012 – they fail to declare that EU rules hamstring them to such an extent that they are essentially meaningless. Look no further than the Shannon Free Zone in the Republic of Ireland which was a great success when it opened in 1959 but has become a shadow of its former self since Ireland joined the EU.

Brexit provided the catalyst to reintroduce freeports in the UK in a meaningful way and as part of a comprehensive agenda for change. Furthermore, opponents of the policy argue that they would create a race to the bottom when, in reality, the Government has gone to great lengths to ensure that UK freeports will be a place for high-skilled jobs for local people. They have consulted widely to prevent displacement of jobs or investment from elsewhere in the country to ensure that any boost is long lasting and drives the levelling up agenda.

Despite the fantastic work they will do, freeports should not be mistaken as a silver bullet. They are just one tool at the Government's disposal that will form the levelling up agenda. The two clearest signs of this commitment are the £4.8 billion Levelling Up Fund and the £3.6 billion Towns Fund. The former will invest in infrastructure that improves everyday life across the UK, including regenerating town centres and high streets, upgrading local transport, and investing in cultural and heritage assets. The Towns Fund provides funding for 'town deals' which were introduced to ensure that towns with no proper links with nearby cities that were benefitting from 'city deals' did not miss out on essential funding. The first town deal was piloted in the Greater Grimsby area following lobbying from local politicians and has now become a model for the UK. Furthermore, the £220 million Community Renewal Fund has been launched to help local areas prepare for the launch of the UK Shared Prosperity Fund in 2022 which will be a further source of levelling up funding.

Levelling up can also be seen on a sector-by-sector basis. For example, in the Humber, there is a strategic focus on renewable energy with the region becoming a world-leading offshore operations and maintenance hub with a range of international companies based there. In a £500 million project, the Able Marine Energy Park will attract an integrated offshore wind and renewable energy cluster, creating over 3,000 jobs. The Government provided a further £75 million for the project at the Budget which was crucial to the project. Peter Stephenson, Executive Chairman of the Able Group, did not mince his words when he said: "make no mistake, without the level of support that we have received from Government, the project would not have proceeded". My own constituency, Cleethorpes, sits on the south bank of the Humber Freeport. The Humber bid was the highest scoring of all the bids and the only one to score 'high' across all assessment criteria. When it opens, the Humber Freeport will include this world-leading business expertise which, I know, will turbocharge the region and deliver jobs and investment for local people.

Martin

Martin Vickers is the Conservative MP for Cleethorpes and Vice-Chair of the APPG for Taiwan.

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