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Sir Keir Starmer mistakenly announced that Rachel Reeves would unveil five new freeports in Wednesday’s Budget, in what officials have reportedly dubbed a “total cock-up”.
The prime minister told reporters that while freeports were a scheme inherited by the new Labour government, it plans to “maximise their potential”, saying they would “have this government’s stamp on them”.
A press release accompanying the announcement claimed Ms Reeves would announce “five new freeports as part of the government’s package of measures to fix the foundations and rebuild the country”.
But it is understood the government actually planned to announce new customs sites at five existing freeports that were previously announced by the Conservatives.
A government official told the Financial Times it had been a “total cock-up with the comms”.
While freeports can exist as a physical piece of infrastructure without customs sites, government sources told The Independent they do not class them as “operational” until they have designated tax and customs sites.
Freeports are areas near shipping ports or airports where tariffs do not apply to imported goods.
Firms in these areas also pay lower national insurance for new employees and lower property taxes.
Plans to establish investment zones at 12 sites were announced by the Conservatives in 2023.
Investment zones in England have the potential to create 89,000 additional jobs by 2033, bringing in a total of £11bn of private investment, the government said.
Cabinet minister Pat McFadden defended the government’s plan, telling the BBC: “This is changes in five of the existing freeports that are coming out – these freeports have certain customs zones and tax-free zones and so on.
“The view that we’ve taken of this, like a lot of things, is, if something’s working, can you improve it? If it’s not working, will you change it? And we take quite a pragmatic view of this.”
But the Conservative Party described the situation as a “humiliating U-turn that will once again damage the already shrinking business confidence in this country”.
Downing Street has been contacted for comment.
