Business, Freight News, Sea

Government urged to keep close tab on freeports

[ April 20, 2021   //   ]

The Parliamentary International Trade Committee is urging the Treasury to promptly publish an impact assessment for reports including estimates for economic growth, trade, investment and job creation, in a report published on 20 April.

It remains to be seen how successful freeports will be at achieving these objectives, the committee adds.

The Committee also recommends that the Government commission a full, independent evaluation of the implementation of the policy within five years of the establishment of the first freeports.

In light of the disagreement between HM Treasury and the Department for International Trade about which department was best-placed to submit evidence to the inquiry, the Committee is concerned that the necessary cross-departmental collaboration and clear accountability required to implement the policy is absent.

The Committee recommends that the Government set out how it will ensure effective accountability and collaboration in the implementation of the freeports policy and that the Department for International Trade has oversight of the policy, as well as administration.

As it is not possible to eradicate fully the risk of economic displacement associated with freeports, the Government will need to be careful to distinguish between new economic activity and economic activity moving to freeports from elsewhere.

The Committee notes the security risks that accompany freeports and welcomes the steps taken so far to address these. These will require ongoing monitoring and enforcement, and the Committee recommends that the Government set out how it will seek to do this in its response to the Report.

In the devolved nations, the Committee calls on the Treasury to ensure that funding is available to freeports that corresponds with awards in England.

Committee chair Angus Brendan MacNeil MP, said: “We welcome the Government’s ambition to increase international trade and investment through its freeports policy. However, it remains to be seen how successful freeports will be in achieving this objective.”

Commenting on the report, the British International Freight Association (BIFA) said that the findings would do little to change the indifference to the freeports concept by the majority of its members.
Director general Robert Keen, said: “From a purely Customs viewpoint, the benefits of freeports are marginal and provide very few new advantages compared to the existing Customs Special Procedures, which since 1 January 2021 have no longer needed a guarantee to operate,”.
“The report also acknowledges the security risks that accompany freeports and any BIFA member that is considering setting up in one of the eight freeports that has been announced to date, should bear in mind that long term storage is prohibited, and there is also a lack of clarity regarding customs regimes.
“Clearly if the freeports scheme succeeds in increasing international trade and investment , it will be of benefit to BIFA members that handle a large percentage of the UK’s visible international trade, but that remains to be seen.”

Law firm Womble Bond Dickinson has set up an online survey to gain insights on how Freeports will affect business activities. It says it has recently seen a surge in enquiries from clients and regional business groups keen to learn more about the opportunities and implications. The survey will be carried out in April and May and will measure business sentiment across a range of different sectors.