These free ports spread across the country will allow companies that trade there to benefit from tax cuts and simplified customs procedures.
On Wednesday, the British government announced in its budget the creation of eight free ports in England, which are areas considered for tax purposes outside the country’s customs territory, to stimulate the economy and regions after leaving the European Union. Finance Minister Rishi Sunak told the House of Commons that these areas, which are expected to be operational by the end of 2021, will have “different rules to make the activity easier and less expensive.”
The Treasury Secretary is an advocate of these free ports and wrote a report a few years ago extolling its benefits. The free zones envisaged in the budget released on Wednesday will be all over England, including one near London and one near Liverpool, and more often than not on the coast. Businesses operating there will benefit from tax cuts and simplified customs procedures.
Ignore state aid rules
Discussions are also continuing to establish free ports in Scotland, Wales and Northern Ireland as soon as possible. In February 2020, the Boris Johnson government said it wanted to establish ten free ports in the UK, which was one of its campaign promises. Brexit allows you to take back free zones without having to comply with EU state aid rules.
However, these free zones, found across the world and in Europe, are being criticized for facilitating laundering dirty money or promoting tax exemption for the wealthy. Opposition Labor Party leader Keir Starmer said on Wednesday that the priority should be to make life easier for companies doing business with the European Union and affected by new trade rules after Brexit.
“Instead of blind reliance on free ports, the chancellor would do better if the Brexit deal succeeds in favor of UK manufacturers, which face more red tape, and for our financial services,” he said.