Labour MP for Redcar, Anna Turley, has called on the government to give the Teesport area ‘free port’ status to boost Teesside’s economy and create more jobs.
A free port is legally outside of UK customs territory, providing exemptions from taxes and duties. Goods can be imported, manufactured and then re-exported from within the freeport zone without incurring UK customs duties.
Anna made the call in the House of Commons on Monday as part of a debate on the Taxation (Cross-Border) Trade Bill, a Brexit bill designed to create a new customs regime for the UK after we have left the European Union.
In the chamber, Anna said:
“I make no apology for lobbying for such a status on behalf of the port in my own constituency. Teesport has strong structural advantages towards being favoured for Free Port status – a deep-water facility, providing lock-free access to the sea, with strong road and rail services.
“The facility handles 5,000 vessels and 40 million tonnes of cargo a year. The port is integral to the Teesside manufacturing complex, incorporating chemicals, engineering, renewable energy and agritech.
“Free port status for Teesside could make the area the gateway of the North, rebalancing the economy and making the region’s manufacturing base more competitive and attractive.”
Anna also called on the government to follow through on the Prime Minister’s call for Teesside to look to the future after the loss of SSI:
“The South Tees Development Corporation, overseeing the former SSI site, is the biggest industrial opportunity the UK has faced since the Second World War. When the government closed the steelworks in 2015 and three thousand Teessiders lost their jobs, they promised to do all they could. And on the Prime Minister’s most recent visit, she told us we had to look to the future. Well, we are. The question is, are the government?"
Free port status for Teesport also has the backing of the North East Process Industry Cluster, the leading organisation behind our region’s chemical industry, who believe it will help the sector stay competitive in global markets.
Full text of Anna’s speech:
**Check against delivery**
I wanted to take the opportunity of this bill to raise an important opportunity which could bring as many as 90,000 jobs to this country, and in particular many to my own constituency.
It refers to Schedule 2 Part 2 of the bill and can otherwise be referred to as the introduction of free ports.
Around the world there are approximately 3,500 free trade zones, employing 66 million people across 135 countries. There are currently none in the UK.
Conferring a free trade status on a U.K. port would place it administratively outside of customs territory. It would mean goods can be imported, manufactured or re-exported inside the Free Trade Zone without incurring domestic customs duties or taxes. These are only paid on goods entering the domestic UK economy. As well as benefits to customs taxes and taxes, free zones often also support economic activity through financial incentives like R&D tax credits, regulatory flexibility, and tax reductions.
They are recognised around the world as playing a major role in retaining, re-shoring and growing domestic manufacturing activity and boosting trade. In the US there are 250 free trade zones and they also play a major role in the economies of Singapore, Hong Kong, Indonesia and the UAE.
Ports are already a vital strategic asset for the UK, accounting for 96 per cent of all trade volume and 75 per cent of trade value. The Free Port concept builds on our maritime history and an existing UK strength.
The creation of a Free Port would increase employment and economic activity in areas where economic need is high and could play a major role in rebalancing our London-centric economy. Of the country’s 30 largest ports, 17, including Teesside, are in the bottom quartile of local authorities in the ONS’s Index of Multiple Deprivation.
I make no apology for lobbying for such a status on behalf of the port in my own constituency. Teesport has strong structural advantages towards being favoured for Free Port status – a deep-water facility, providing lock-free access to the sea, with strong road and rail services.
Teesport is versatile and adaptable. The facility handles 5,000 vessels and 40 million tonnes of cargo a year. The port is integral to the Teesside manufacturing complex, incorporating chemicals, engineering, renewable energy and agritech.
The South Tees Development Corporation, overseeing the former SSI site, is the biggest industrial opportunity the UK has faced since the Second World War. When the government closed the steelworks in 2015 and three thousand Teessiders lost their jobs, the government promised to do all it could. And on the Prime Minister’s most recent visit, she told us we had to look to the future. Well, we are. The question is, are the government?
The Development Corporation, the only one outside of London, has set out its ambition to create 20,000 additional jobs in high value manufacturing over a 25 year period, adding £1 billion in gross value added for the local economy. This would be substantially enhanced through the creation of a free port.
Incorporation of the STDC area, together with the Teesport facility and in conjunction with adjacent industrial sites such as Wilton and North Shore, into a free port area would help this region build upon its current strengths in chemicals, steel, energy and logistics and realise our vision to become the most attractive place in the country for high value manufacturing.
Led by the North East Process Industry Cluster and the former Honourable Member for Hartlepool, Teesside is the location of the largest integrated chemical complex in the UK and the second largest in Western Europe in terms of manufacturing capacity. The sector inputs to a range of other key industries such as aerospace, automotive and life sciences. The sector is highly productive and competitive but also faces a number of challenges, such as increasing global competition, high operating costs, the need to attract investment from global parent companies and skill shortages. A free port could be part of a range of policy solutions to maintain and enhance the attractiveness of investment in this sector in the UK and on Teesside.
Free port status for Teesside could make the area the gateway of the North, rebalancing the economy and making the region’s manufacturing base more competitive and attractive.
This Bill, Madam Deputy Speaker, provides an opportunity to establish the legislative basis to enable such a system to be set up in the UK which could provide a quick and powerful boost to the British economy as we go forward in Brexit negotiations.
I must raise at this point though, that such a zone is not dependent on leaving the EU. Other Member States have freeports, including the port of Bremerhaven in Germany, Le Verdon in France and the Port of Shannon in the Republic of Ireland. Indeed, there are presently 85 freeport zones within the European Union.
Moreover, the Secretary of State is already empowered to designate free ports by statutory instrument under section 100A of the Customs and Excise Management Act 1979, which is still in force.
Indeed the UK itself had five free trade zones until 2012, at which point the statutory instruments that set them up expired. So the framework is in place, and the opportunity is there. Hopefully this bill can clarify that.
Schedule 2, Part 2 of this Bill allows government to regulate on free ports. So I hope the Minister can agree with me that this is the perfect moment to reopen the debate into free ports, to be bold, and to potentially create a new one, preferably on Teesside.
Therefore at this stage of the Bill, I would like to conclude by asking the minister the following:
Does he agree with the principle of free ports and does he recognise the role they can play in driving and rebalancing our economy?
Will the Government be using this Bill to amend the free port powers created by the 1979 Customs and Excise Management Act?
And if so, will the government use the opportunity to bring forward powers to enable Teesport to become a Freeport, or subject to special customs arrangements?