Robert Jenrick's department reveals why the Humber's bid for freeport status was successful but South Yorkshire's proposal didn't make the cut
Robert Jenrick's department reveals why the Humber's bid for freeport status was successful but South US's proposal didn't make the cut
The Government has revealed that the Humber’s bid for a low tax ‘freeport’ was the strongest it received as it set out why a similar proposal for South US failed to make the cut.
A ‘decision-making note’ published by the Ministry of Housing, Communities and Local Government showed that the bid for the new status for a 45km area taking in the ports of Hull, Grimsby, Immingham and Goole was the only bid given the top score in all five categories.
The bid by South US, which was not one of the eight chosen in England, got the top score in two categories and rated ‘medium’ in three other areas.
Read More
What is a freeport? Meaning in the UK, how the free trade zones work – and the e…
But the government document said it limited the number of freeports to one in each English region, as well as at least one in each of Scotland, Wales, and Northern Ireland, to “ensure a strong geographic spread”.
It added: “The government have always been clear that the number of Freeports must ultimately be limited to control costs and maximise agglomeration benefits.
“The Chancellor judged that there was insufficient justification for creating additional Freeports beyond an 8th in England at this time, given wider fiscal pressures on the government as a result of the COVID-19 pandemic.”
Last week, political leaders in South US complained that their freeport bid was turned down despite it scoring higher across many categories – including the regeneration category most closely linked to levelling up – than many of the successful bids.
They claimed the way funding was distributed showed the Government’s ‘levelling up’ promises were a “hollow façade, driven by politics and expediency rather than any serious attempt to address the deep seated challenges facing the parts of the UK most in need of support”.
It comes amid criticism of the way the Government has prioritised funding for various funds to support its levelling up agenda, with some accusing Ministers of favouring Conservative-held or marginal areas.
Freeports are special economic zones with different rules to make it easier and cheaper to do business. They include infrastructure planning, customs and favourable duties and taxes.
Three types of sites can be developed within the freeport – customs, tax and seed capital. The first two are designed to attract new businesses and encourage existing ones to invest in equipment, machinery and people and give them a competitive edge over rivals across the world by slashing tariffs.
According to the published assessment, the five criteria for deciding where a freeport should go were ‘trade and investment’, ‘regeneration’, ‘innovation’, ‘deliverability of proposals at pace’ and ‘private sector involvement’.
In total 18 bids were received and 14 went on for further assessment from a “cross-government group of senior officials forming the Freeports Programme Board”, with each awarded a score of high, medium or low against in the five areas.
Thirteen were then sent on for Chancellor Rishi Sunak and Communities Secretary Robert Jenrick to decide which areas should be chosen alongside senior civil servants.
Mr Sunak declared the fact that he was MP for an area bordering Teesside, one of the successful areas, prior to decision-making.
And they discussed the aggregate scores along with other considerations including that bids should have a strong focus on regeneration and show strong levels of private sector involvement.
The document said another factor was “that bids should as much as possible, be spread across all the regions of England, to provide broad national coverage to maximise the benefits of the policy and help to further limit any potential harmful regional displacement”.
In the end two bids from the same region, the North East England and Teesside proposals, were given the same score against the Government’s criteria.
But the document said: “The Teesside bid’s stronger alignment with government policy (in particular the Net Zero agenda and the Prime Minister’s recently published 10 Point Plan), resulted in a decision to select that as the Freeport bid within the region.”
According to the country’s biggest port operator Associated British Ports says the decision to make the Humber a freeport will bring 7,000 jobs to the region.
But a new report by UK in a Changing Europe says the key component of the post-Brexit economic strategy are not a “magic bullet” and are unlikely to lead to the sort of transformation the Government hopes for.
It says that evidence that freeports create additional jobs is unclear, and at best mixed, while there is a public cost of maintaining freeports which is exacerbated by the necessity of providing financial incentives for businesses to relocate to them.
