Rishi Sunak discusses freeports announcement
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The Teeside freeport began operations earlier today, marking a Brexit triumph as the region will benefit from a major jobs boost, as well as decreased financial regulation. A freeport is an area within the UK’s borders where different economic regulations apply. Writing about the development, POLITICO’s Trade Reporter Graham Lanktree said the freeport, Britain’s first since Brexit, would bring “tax breaks galore”.
Covering 4,500 acres, Teesside has estimated that the new economic zone will create more than 18,000 new jobs and provide a £3.2billion boost to the local area.
The government said the development would put Teesside “at the forefront of green energy, manufacturing and innovation.”
The freeport has so far secured multi-million-pound investment from GE Renewables to build a new offshore wind blade manufacturing plant, which is estimated to deliver up to 750 manufacturing jobs and a further 1,500 roles in the supply chain.
In England, companies that reside within freeports will be offered temporary tax breaks, including reductions to the tax they pay on their existing property and when they buy new buildings.
Freeport employers will also pay less national insurance for all new workers from April 2022.
While freeports existed in the UK long before we left the EU, the economic zones have long been heralded as a major Brexit win.
Supporters have claimed that the UK is now able to adopt a more generous freeport policy, providing businesses with more help.
However, Labour has criticised the Freeports, saying that they won’t be able to enjoy the full benefits of the tax-exempt zone if they are exporting to countries with which the UK has signed post-Brexit trade deals.
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In what the party called a “catastrophic blunder”, they said that manufacturers operating within freeports could face tariffs on their exports to key markets including Switzerland, Canada, Norway and Singapore – despite the UK having signed trade deals with them.
According to the Labour party, ministers failed to remove wide-ranging “duty exemption prohibitions” contained in 23 of those agreements, which state that any business which has not paid duty on its imports cannot benefit from reduced tariffs on its exports.
The government denied the claims, saying: “Businesses will not be shut out of markets we have negotiated free trade deals with.
“They will benefit from both our free trade programme and also from freeports, which provide tax breaks, simpler planning restrictions and cheaper imports.”
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Speaking about the Teeside Freeport, Minister of State Lord Frost said: “Having left the European Union we now have the freedom to do things differently, including setting up new freeports to turbo-charge our trade with the world’s fastest-growing markets.
“Today’s announcement is great news for Teesside and it shows that we are maximising the opportunities of Brexit to create well-paid jobs and drive growth right across the UK.
“As well as more freeports, we want to go further and faster to create a competitive, regulatory environment which supports innovation and boosts inward investment.”
Freeports also form part of the government’s “Levelling Up” agenda, as it is hoped that freeports will help regenerate deprived areas.
Tees Valley Mayor Ben Houchen said that “the sky’s the limit as to what the Teeside Freeport can achieve.”
“The day has finally come – after years of campaigning and shouting about the transformative potential of a freeport for Teesside, Darlington and Hartlepool, we’re at last open for business.
“We’re throwing our doors open to the world, showing businesses that we’re a truly outward-looking, international region ready to welcome the cutting-edge sectors of the future.
“We’re already reaping the benefits of the Teesside Freeport with the likes of GE who are creating thousands of good-quality well-paid jobs for local workers.”
Meanwhile, Neil O’Brien, Minister for Levelling Up, said that the new economic zone would “help to generate prosperity and spread opportunity by driving trade and innovation as we level up in every corner of the United Kingdom.”
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