With the chancellor using the Budget to announce the UK’s first eight post-Brexit Freeports, lawyers have welcomed the move as first step in the levelling up agenda.
As anticipated, Chancellor Rishi Sunak used the budget to announce the locations of the UK’s first Freeports, as part of the government’s roadmap for the post covid-Brexit economy.
While Freeports are not a new idea, it is expected that in offering a range of economic benefits and low taxes, the initiative will help regions bounce back as part of the wider aim of ‘levelling up’ the UK economy.
The new Freeports named are East Midlands Airport, Felixstowe and Harwich, Humber, Liverpool City Region, Plymouth, Solent, Thames and Teesside.
Over 30 areas made a bid for Freeport status and as expected, several northern names are on the list, but winners also include the south coast bid from Plymouth.
Those now confirmed as having Freeport status are expected to be up and running in some cases by later this year.
Sarah Cardew, a partner and specialist tax lawyer at Irwin Mitchell, said: “There is the feeling that Freeport status will be different in a post-Brexit world from what it was in the past. The government has more latitude on offering tax breaks and subsidies, but whatever is done will still need to comply with the TCA agreement and WTO rules.
“The intention is clearly to increase employment prospects and boost investment in areas that traditionally struggle with both and in areas like Teesside; those are the measures the scheme will ultimately be judged on.
“The enhanced capital allowances and 100% SDLT relief should provide a welcome boost for the commercial property market in those regions, albeit they are time limited until 2026.”
“Freeports have the potential to open up investment, but the government will need to get the balance right to achieve the chancellor’s ambition to ‘change the economic geography' of the country. With an even geographical spread, it looks like the government recognises the need to support the northern powerhouse, while backing southern regions that have had it tough recently.
“Some of the front runners successful also show the pressure was also on to approve those with the biggest and best bids.
“The announcement by the chancellor is therefore an expected, but welcome one. Time will tell if the initiative and balancing act in terms of the Freeports selected can deliver the anticipated benefits and make good on the government’s pledge to level up the wider economy for all.”
Supporters say freeports can help increase manufacturing, and encourage jobs and investment in areas that would otherwise struggle to attract them.