The government’s plan to create so-called freeports will have a “negligible” benefit to the UK economy, trade experts have warned.
The UK Trade Policy Observatory said its analysis had found that the policy would have little effect in the UK because tariffs were already low.
The government says it wants to create 10 “freeports” around the UK. Under the policy, tax concessions would be granted to goods brought into a port, as long as they do not leave the port area – effectively placing them outside the UK’s usual customs area.
Download the new Independent Premium app Sharing the full story, not just the headlines
Download now
The government says the policy could also be combined with a “special economic zone” with fewer regulations and more tax breaks.
While the government has linked the creation of such special economic zones and ports to Brexit, there is no prohibition on them under EU law.
In fact, the UK already had seven free ports from 1984 until 2012, but the policy was allowed to lapse by David Cameron’s government when legislation expired.
“Our analysis of freeports has shown that their impact on the UK economy will be negligible at best,” Dr Peter Holmes, Reader at the University of Sussex and UK Trade Policy Observatory fellow said.
“Their significance is largely symbolic for the UK Government and no more than a gesture at levelling-up. In reality, any jobs or increased economic activity within free ports is likely to come at the expense of other regions in the UK.
“When tariff rates are very low, there is little to be gained by cutting the cost of paying them. Any gains from additional urban regeneration measures which would not be helped by putting a fence round a port. Special subsidies to particular ports would be at the expense of places and if effective be liable to retaliation under the WTO subsidies code.”
The government says goods would not have to pay tariffs, import VAT or excise duty until they leave the freeport and enter the domestic UK market, with simplified customs procedures and declarations.
Tax incentives could include business rate discounts, stamp duty reductions, research and development tax credits, reduced requirements for employers to play national insurance, and bigger capital allowances.
Local planning authorities could also have their powers reduced to suit international business. The government says the policy is “a key part of delivering our ambition to level up the economy across the country.”
Speaking on Wednesday at the Commons international trade committee, Catherine Barnar, a professor of EU law at Cambridge University, told MPs that the previous iteration of the policy had ended because they were no longer deemed necessary.
“There was a sense that they’d rather run out of steam, that we have become more modern in terms of our delivery of customs and could do the work without the freeports,” she said.
Giving evidence to the same committee, the owners of various ports however welcomed the various tax advantages their users might be given.
left Created with Sketch. right Created with Sketch.
1/50 15 July 2020Flooding in Sunamganj. Almost four million people have been hit by monsoon floods in South Asia, with a third of Bangladesh already underwater from some of the heaviest rains in a decade
AFP via Getty
2/50 14 July 2020Second Republican infantry guard regiment take part in the annual Bastille Day military ceremony on the Place de la Concorde in Paris
AFP via Getty
3/50 13 July 2020A man walks his dog through thick sea foam blowing ashore during a storm in Seapoint, Cape Town, South Africa
EPA
4/50 12 July 2020Security forces on the outskirts of Amritsar take part in Van Mahotsav, an annual tree-planting festival in India
AFP via Getty
5/50 11 July 2020People covered with coloured powder enjoy music during the Holi festival in Minsk, Belarus
EPA
6/50 10 July 2020A demonstrator during clashes following the funeral of 29-year-old Palestinian Ibrahim Abou Yacoub, who was killed by Israeli forces, in the village of Kifl Hares, south of the West Bank city of Nablus
AFP via Getty
7/50 9 July 2020The sun rises in Timmendorfer Strand, northern Germany
AP
8/50 8 July 2020Portraits of healthcare workers are pasted on the Opera Bastille, designed by Anne-Christine Poujoulat, to pay tribute to caregivers during the Covid-19 pandemic in Paris
Anne-Christine Poujoulat/AFP/Getty
9/50 7 July 2020Tengger tribe people make their way to the summit of Mount Bromo volcano to make offerings in Probolinggo, as part of the Yadnya Kasada Festival. The Tenggerese climb the active volcano to seek the blessing from the main deity by presenting offerings of rice, fruit, livestock and other items
AFP via Getty
10/50 6 July 2020A healthcare worker checks the temperature of residents during a check-up campaign in Mumbai, India
Reuters
11/50 5 July 2020People wearing protective face masks to help prevent the spread of the coronavirus sit at a bus stop in the city of Zanjan, Iran
AP
12/50 4 July 2020Protesters blocking an exit to the precinct of the officers who arrested Elijah McClain, cover their ears anticipating the use of flash-bang grenades by police in Aurora, Colorado
Reuters
13/50 3 July 2020A member of the Israeli border police jumps during a Palestinian protest against Israel’s plan to annex parts of the West Bank, in Kafr Qaddum near Nablus
Reuters
14/50 2 July 2020A surfer jumps clear of his board while enjoying winter waves at New Brighton Beach in Christchurch, New Zealand
AP
15/50 1 July 2020A man is detained by riot police during a demonstration in Hong Kong. China imposed a new national security law which has faced international condemnation
Getty
16/50 30 June 2020A man smokes a pipe while wearing a face mask during a demonstration in Nantes, as part of a nationwide day of protests to demand better working conditions for health workers in France
AFP via Getty
17/50 29 June 2020Lawmakers from Taiwan’s ruling Democratic Progressive Party scuffle with people from the main opposition Kuomintang party, who have been occupying the Legislature Yuan, in Taipei
Reuters
18/50 28 June 2020Protester holds crosses during a demonstration in honour of the victims of coronavirus in front of Brazil’s National Congress
Getty
19/50 27 June 2020A demonstrator wearing a face mask holds a sign during a protest against police brutality and racial inequality in the aftermath of the death in Minneapolis police custody of George Floyd, at the Victory column in Berlin
Reuters
20/50 26 June 2020Hygienists inside a decontamination area in a coronavirus treatment centre that cares for positive patients that show little or no symptoms in Dakar
AFP via Getty
21/50 25 June 2020A seagull snatches a croissant from a buffet during a press conference at the headquarters of AP Moeller – Maersk in Copenhagen, Denmark
Ritzau Scanpix/AFP/Getty
22/50 24 June 2020A volunteer receives an injection from a medical worker during the country’s first human clinical trial for a potential vaccine against coronavirus, at the Baragwanath hospital in Soweto, South Africa
Reuters
23/50 23 June 2020Swiss acrobat Ramon Kathriner performs during the “Glacier 3000” Air show, an event marking the reopening of the Alpine facilities above Les Diablerets
AFP via Getty
24/50 22 June 2020A worker cleans volcanic ash off the stupas at the Borobudur temple in Indonesia, a day after Mount Merapi erupted in nearby Sleman, sending a plume of ash into the sky
AFP via Getty
25/50 21 June 2020Aerial view of a burial at the Vila Formosa cemetery during the COVID-19 coronavirus pandemic, in Sao Paulo, Brazil, on June 21, 2020. – The novel coronavirus has killed at least 464,423 people worldwide since the outbreak began in China last December, being Brazil Latin America’s worsthit country with 49,976 deaths from 1,067,579 cases.
AFP via Getty
26/50 20 June 2020National Guards form a line in front of “Black Lives Matter” protestors in Tulsa, Oklahoma where Donald Trump was holding a campaign rally
AFP via Getty
27/50 19 June 2020Nurses, doctors, midwives and health care workers attend the fourth Zumba dance session organised by the Nursing Council of Kenya at Kenyatta stadium where screening booths and an isolation field hospital have been installed. The dance sessions have been organised to re-energise and uplift health care providers sprits during this pandemic
AFP via Getty
28/50 18 June 2020Alpha jets from the French Air Force Patrouille de France and the Royal Air Force Red Arrows perform a flypast over the statue of Charles de Gaulle on the Champs Elysees avenue in Paris to celebrate the 80th anniversary of wartime leader’s appeal to the French people to resist the Nazi occupation, broadcast from London
Reuters
29/50 17 June 2020Activists from the Extinction Rebellion movement block a street outside the German Automobile industry association during a protest in Berlin
AFP via Getty
30/50 16 June 2020Barbers wearing protective suits and face masks inside a salon in Dhaka, Bangladesh
Reuters
31/50 15 June 2020Siegfried White raises his hand as he protests outside a burned Wendy’s restaurant on the third day following Rayshard Brooks death. The black man was shot by police in the car park in Atlanta. The mayor ordered immediate police reforms on Monday after the fatal shooting by a white officer
AFP via Getty
32/50 14 June 2020People take part in a Black Lives Matter protest march in central Tokyo
AFP via Getty
33/50 13 June 2020Protesters raise their fists during a demonstration against police brutality and racism in Paris, France. The march was organised by supporters of Assa Traore, whose brother Adama died in police custody in 2016, in circumstances that remain unclear
EPA
34/50 12 June 2020A pro-democracy supporter shouts at riot police during an anti-national security law rally in Mongkok district in Hong Kong, China. Protesters heeded online calls to gather as the city marks the one-year anniversary of the major clashes between police and pro-democracy demonstrators over the controversial extradition bill
Getty
35/50 11 June 2020A section of the River Spree next to the Reichstag building coloured green by activists from “Extinction Rebellion” to protest the German government’s coal policies in Berlin
AFP via Getty
36/50 10 June 2020A woman poses in front of a decapitated statue of Christopher Columbus at Christopher Columbus Park in Boston Massachusetts. The statue’s head, damaged overnight, was recovered by the Boston Police Department, as a movement to remove statues commemorating slavers and colonisers continues to sweep across the US
AFP via Getty
37/50 9 June 2020Ivy McGregor, left, reads a resolution during the funeral for George Floyd at The Fountain of Praise church in Houston. George Floyd is being laid to rest in his hometown, the culmination of a long farewell to the 46-year-old African American whose death in custody ignited global protests against police brutality and racism
AFP via Getty
38/50 8 June 2020People raise their fist and stand on their knees as they demonstrate in Nantes, during a Black Lives Matter protest
AFP via Getty
39/50 7 June 2020A woman looks on during a protest against the killing of George Floyd in Osaka city, western Japan
EPA
40/50 6 June 2020Demonstrator raise their fists at the Lincoln Memorial during a protest against police brutality and racism in Washington, DC. Demonstrations are being held across the US following the death of George Floyd on May 25, 2020, while being arrested in Minneapolis, Minnesota
AFP via Getty
41/50 5 June 2020A handout photo made available by 2020 Planet Labs shows an aerial view of the large diesel spill in the Ambarnaya River outside Norilsk in the Arctic. Russia has managed to contain a massive diesel spill into a river in the Arctic, a spokeswoman for the emergencies ministry told AFP. Environmentalists said the oil spill, which took place last May 29, was the worst such accident ever in the Arctic region
Planet Labs Inc./AFP via Getty
42/50 4 June 2020Activists hold a candlelit remembrance outside Victoria Park in Hong Kong, after the annual vigil, that traditionally takes place in the park to mark the 1989 Tiananmen Square crackdown, was banned on public health grounds because coronavirus
AFP via Getty
43/50 3 June 2020A visitor walks in Odaiba as the sun sets in Tokyo
AP
44/50 2 June 2020Activists of the Socialist Unity Centre of India shout slogans in Ahmedabad in solidarity with protests against the recent killing of George Floyd
AP
45/50 1 June 2020Activists take part in a Black Lives Matter protest in Zurich after the recent death of George Floyd
EPA
46/50 31 May 2020A black man and a white woman hold their hands up in front of police officers in downtown Long Beach during a protest against the death of George Floyd, an unarmed black man who died while being arrested and pinned to the ground by the knee of a Minneapolis police officer. Protests sweeping the United States over the death of George Floyd reverberated on the other side of the globe when thousands marched in solidarity on the streets of New Zealand
AFP via Getty
47/50 30 May 2020Police officers are seen amid tear gas as protesters continue to rally against the death in Minneapolis police custody of George Floyd, in Minneapolis, Minnesota
Reuters
48/50 29 May 2020A boy holds a sign as refugees protest outside the UNHCR offices against a government decision that they should leave their accommodation provided through European Union and UNHCR funds by the end of May, in Athens, Greece
Reuters
49/50 28 May 2020Cloud iridescence, an optical phenomenon where light is diffracted through water droplets, is pictured at the edge of some clouds before a summer thunderstorm over Bangkok
AFP via Getty
50/50 27 May 2020Riot police try to control pro-democracy supporters at a rally in Causeway Bay district, Hong Kong
Getty
1/50 15 July 2020Flooding in Sunamganj. Almost four million people have been hit by monsoon floods in South Asia, with a third of Bangladesh already underwater from some of the heaviest rains in a decade
AFP via Getty
2/50 14 July 2020Second Republican infantry guard regiment take part in the annual Bastille Day military ceremony on the Place de la Concorde in Paris
AFP via Getty
3/50 13 July 2020A man walks his dog through thick sea foam blowing ashore during a storm in Seapoint, Cape Town, South Africa
EPA
4/50 12 July 2020Security forces on the outskirts of Amritsar take part in Van Mahotsav, an annual tree-planting festival in India
AFP via Getty
5/50 11 July 2020People covered with coloured powder enjoy music during the Holi festival in Minsk, Belarus
EPA
6/50 10 July 2020A demonstrator during clashes following the funeral of 29-year-old Palestinian Ibrahim Abou Yacoub, who was killed by Israeli forces, in the village of Kifl Hares, south of the West Bank city of Nablus
AFP via Getty
7/50 9 July 2020The sun rises in Timmendorfer Strand, northern Germany
AP
8/50 8 July 2020Portraits of healthcare workers are pasted on the Opera Bastille, designed by Anne-Christine Poujoulat, to pay tribute to caregivers during the Covid-19 pandemic in Paris
Anne-Christine Poujoulat/AFP/Getty
9/50 7 July 2020Tengger tribe people make their way to the summit of Mount Bromo volcano to make offerings in Probolinggo, as part of the Yadnya Kasada Festival. The Tenggerese climb the active volcano to seek the blessing from the main deity by presenting offerings of rice, fruit, livestock and other items
AFP via Getty
10/50 6 July 2020A healthcare worker checks the temperature of residents during a check-up campaign in Mumbai, India
Reuters
11/50 5 July 2020People wearing protective face masks to help prevent the spread of the coronavirus sit at a bus stop in the city of Zanjan, Iran
AP
12/50 4 July 2020Protesters blocking an exit to the precinct of the officers who arrested Elijah McClain, cover their ears anticipating the use of flash-bang grenades by police in Aurora, Colorado
Reuters
13/50 3 July 2020A member of the Israeli border police jumps during a Palestinian protest against Israel’s plan to annex parts of the West Bank, in Kafr Qaddum near Nablus
Reuters
14/50 2 July 2020A surfer jumps clear of his board while enjoying winter waves at New Brighton Beach in Christchurch, New Zealand
AP
15/50 1 July 2020A man is detained by riot police during a demonstration in Hong Kong. China imposed a new national security law which has faced international condemnation
Getty
16/50 30 June 2020A man smokes a pipe while wearing a face mask during a demonstration in Nantes, as part of a nationwide day of protests to demand better working conditions for health workers in France
AFP via Getty
17/50 29 June 2020Lawmakers from Taiwan’s ruling Democratic Progressive Party scuffle with people from the main opposition Kuomintang party, who have been occupying the Legislature Yuan, in Taipei
Reuters
18/50 28 June 2020Protester holds crosses during a demonstration in honour of the victims of coronavirus in front of Brazil’s National Congress
Getty
19/50 27 June 2020A demonstrator wearing a face mask holds a sign during a protest against police brutality and racial inequality in the aftermath of the death in Minneapolis police custody of George Floyd, at the Victory column in Berlin
Reuters
20/50 26 June 2020Hygienists inside a decontamination area in a coronavirus treatment centre that cares for positive patients that show little or no symptoms in Dakar
AFP via Getty
21/50 25 June 2020A seagull snatches a croissant from a buffet during a press conference at the headquarters of AP Moeller – Maersk in Copenhagen, Denmark
Ritzau Scanpix/AFP/Getty
22/50 24 June 2020A volunteer receives an injection from a medical worker during the country’s first human clinical trial for a potential vaccine against coronavirus, at the Baragwanath hospital in Soweto, South Africa
Reuters
23/50 23 June 2020Swiss acrobat Ramon Kathriner performs during the “Glacier 3000” Air show, an event marking the reopening of the Alpine facilities above Les Diablerets
AFP via Getty
24/50 22 June 2020A worker cleans volcanic ash off the stupas at the Borobudur temple in Indonesia, a day after Mount Merapi erupted in nearby Sleman, sending a plume of ash into the sky
AFP via Getty
25/50 21 June 2020Aerial view of a burial at the Vila Formosa cemetery during the COVID-19 coronavirus pandemic, in Sao Paulo, Brazil, on June 21, 2020. – The novel coronavirus has killed at least 464,423 people worldwide since the outbreak began in China last December, being Brazil Latin America’s worsthit country with 49,976 deaths from 1,067,579 cases.
AFP via Getty
26/50 20 June 2020National Guards form a line in front of “Black Lives Matter” protestors in Tulsa, Oklahoma where Donald Trump was holding a campaign rally
AFP via Getty
27/50 19 June 2020Nurses, doctors, midwives and health care workers attend the fourth Zumba dance session organised by the Nursing Council of Kenya at Kenyatta stadium where screening booths and an isolation field hospital have been installed. The dance sessions have been organised to re-energise and uplift health care providers sprits during this pandemic
AFP via Getty
28/50 18 June 2020Alpha jets from the French Air Force Patrouille de France and the Royal Air Force Red Arrows perform a flypast over the statue of Charles de Gaulle on the Champs Elysees avenue in Paris to celebrate the 80th anniversary of wartime leader’s appeal to the French people to resist the Nazi occupation, broadcast from London
Reuters
29/50 17 June 2020Activists from the Extinction Rebellion movement block a street outside the German Automobile industry association during a protest in Berlin
AFP via Getty
30/50 16 June 2020Barbers wearing protective suits and face masks inside a salon in Dhaka, Bangladesh
Reuters
31/50 15 June 2020Siegfried White raises his hand as he protests outside a burned Wendy’s restaurant on the third day following Rayshard Brooks death. The black man was shot by police in the car park in Atlanta. The mayor ordered immediate police reforms on Monday after the fatal shooting by a white officer
AFP via Getty
32/50 14 June 2020People take part in a Black Lives Matter protest march in central Tokyo
AFP via Getty
33/50 13 June 2020Protesters raise their fists during a demonstration against police brutality and racism in Paris, France. The march was organised by supporters of Assa Traore, whose brother Adama died in police custody in 2016, in circumstances that remain unclear
EPA
34/50 12 June 2020A pro-democracy supporter shouts at riot police during an anti-national security law rally in Mongkok district in Hong Kong, China. Protesters heeded online calls to gather as the city marks the one-year anniversary of the major clashes between police and pro-democracy demonstrators over the controversial extradition bill
Getty
35/50 11 June 2020A section of the River Spree next to the Reichstag building coloured green by activists from “Extinction Rebellion” to protest the German government’s coal policies in Berlin
AFP via Getty
36/50 10 June 2020A woman poses in front of a decapitated statue of Christopher Columbus at Christopher Columbus Park in Boston Massachusetts. The statue’s head, damaged overnight, was recovered by the Boston Police Department, as a movement to remove statues commemorating slavers and colonisers continues to sweep across the US
AFP via Getty
37/50 9 June 2020Ivy McGregor, left, reads a resolution during the funeral for George Floyd at The Fountain of Praise church in Houston. George Floyd is being laid to rest in his hometown, the culmination of a long farewell to the 46-year-old African American whose death in custody ignited global protests against police brutality and racism
AFP via Getty
38/50 8 June 2020People raise their fist and stand on their knees as they demonstrate in Nantes, during a Black Lives Matter protest
AFP via Getty
39/50 7 June 2020A woman looks on during a protest against the killing of George Floyd in Osaka city, western Japan
EPA
40/50 6 June 2020Demonstrator raise their fists at the Lincoln Memorial during a protest against police brutality and racism in Washington, DC. Demonstrations are being held across the US following the death of George Floyd on May 25, 2020, while being arrested in Minneapolis, Minnesota
AFP via Getty
41/50 5 June 2020A handout photo made available by 2020 Planet Labs shows an aerial view of the large diesel spill in the Ambarnaya River outside Norilsk in the Arctic. Russia has managed to contain a massive diesel spill into a river in the Arctic, a spokeswoman for the emergencies ministry told AFP. Environmentalists said the oil spill, which took place last May 29, was the worst such accident ever in the Arctic region
Planet Labs Inc./AFP via Getty
42/50 4 June 2020Activists hold a candlelit remembrance outside Victoria Park in Hong Kong, after the annual vigil, that traditionally takes place in the park to mark the 1989 Tiananmen Square crackdown, was banned on public health grounds because coronavirus
AFP via Getty
43/50 3 June 2020A visitor walks in Odaiba as the sun sets in Tokyo
AP
44/50 2 June 2020Activists of the Socialist Unity Centre of India shout slogans in Ahmedabad in solidarity with protests against the recent killing of George Floyd
AP
45/50 1 June 2020Activists take part in a Black Lives Matter protest in Zurich after the recent death of George Floyd
EPA
46/50 31 May 2020A black man and a white woman hold their hands up in front of police officers in downtown Long Beach during a protest against the death of George Floyd, an unarmed black man who died while being arrested and pinned to the ground by the knee of a Minneapolis police officer. Protests sweeping the United States over the death of George Floyd reverberated on the other side of the globe when thousands marched in solidarity on the streets of New Zealand
AFP via Getty
47/50 30 May 2020Police officers are seen amid tear gas as protesters continue to rally against the death in Minneapolis police custody of George Floyd, in Minneapolis, Minnesota
Reuters
48/50 29 May 2020A boy holds a sign as refugees protest outside the UNHCR offices against a government decision that they should leave their accommodation provided through European Union and UNHCR funds by the end of May, in Athens, Greece
Reuters
49/50 28 May 2020Cloud iridescence, an optical phenomenon where light is diffracted through water droplets, is pictured at the edge of some clouds before a summer thunderstorm over Bangkok
AFP via Getty
50/50 27 May 2020Riot police try to control pro-democracy supporters at a rally in Causeway Bay district, Hong Kong
Getty
The relatively limited advantages of freeports mirror other disappointing prospects of government trade policies. The Treasury admitted earlier this year that a planned free trade agreement with the United States would likely have a tiny effect on GDP of just 0.16 per cent. In April the UK economy shrunk by 20.4 per cent in a single month.
Similar planned deals with Australia and New Zealand would have likely essentially zero effect on GDP, another government analysis said.
The government says it needs to leave the EU’s customs union to sign the deals.
Source: UK Politics - www.independent.co.uk