Supercharged free ports could deliver £9bn boost to northern economy

Teesport - one of the ports that could benefit from free port status.

New analysis shows that the introduction of seven supercharged free ports across the north could produce a boost the northern economy by £9bn and create more than 150,000 jobs, says Jason Millett.

Britain’s sea-ports and airports are vital parts of our national infrastructure - they’re the economic gateway to the continent and the wider world. They are the key to accessing global markets, tying Britain into a huge web of economic possibilities and opportunities. 

In the run up to Brexit, some people have voiced concerns about our port infrastructure - worrying whether changes in the custom rules could overwhelm our ports. 

What hasn’t really been discussed is the opportunities that exist from our new-found control over our trading relations with the rest of the world and how we could use those freedoms to help drive huge growth across the UK and rebalance the national economy. 

The north of England accounts for about 20% of the UK economy, but punches way above its weight by handling nearly 30% of trade in international goods. With international trade having such a positive effect on local economies and jobs, the north can take advantage of its existing port and aviation capacity as we leave the EU.

Across the world, around 3,500 ‘free ports’ exist in over 100 countries, but not in the UK. A free port is a special zone within a country which is treated as being outside of its customs border to help businesses compete on the global stage. This means that for goods coming in and out of the special area there are not duties, taxes or tariffs on imports or exports. When products come within our normal customs border they are treated in the normal way.

This means that for exporting manufactures, like car companies, can set up shop, get all the products and good they need to deliver their work at a more competitive cost, more productively and substantially boosting national trade levels. 

Up until now, we haven’t been able to do this - such policies are made very difficult under EU rules. Once we’ve left, the UK government will have the freedom to designate ports and airports as free ports, creating huge numbers of new jobs and driving economic growth. 

We can then provide a further boost by combining them with enterprise zones - a proven economic policy already in place across the UK - to create what we call ‘supercharged’ free ports.   

These ‘supercharged’ free ports are then better able to compete on the global stage and are perfectly positioned to attract new business, drive trade and create local jobs.

For the north of England, this could be completely transformative. Our northern towns and cities are often areas facing high levels of deprivation, suffering from higher than average unemployment and years of underinvestment. More trade means more investment, and more investment means companies creating new jobs and regenerating some of the most deprived areas of the UK. 

For the ports and airports themselves, it could unlock levels of growth not seen since the industrial revolution. 

Mace’s latest analysis has shown that the introduction of seven supercharged free ports across the north could produce a £12bn boost in international trade, a £9bn boost for the northern economy and create more than 150,000 jobs. That is equivalent to the population of York.

The economic benefit would be enough to fundamentally alter the north-south economic imbalance, reducing the gap between the two by 10-15% - and all without any redistribution of government spending. 

But to really capitalise on this potential, the north needs Northern Powerhouse Rail to not only connect the great cities like Manchester, Sheffield and Leeds but also provide better connectivity to the ports on both the east and west coasts.

Regardless of how you voted in the EU referendum, we all know that Britain will need to be primed and ready to compete on international stage once we leave the EU. This means using our new-found control of our future as a force for good. We know that there is cross-party support for our policy idea and that it is extremely popular amongst the public too.

According to polling done for Mace by Survation, 83% of those questioned would back the creation of supercharged free ports and this support spans age ranges, political affiliation and geographical location across the UK. Rarely do politicians have a popular policy option at their fingertips.

Britain has always been a great trading nation, who is perfectly located with Europe to the east and the economic powerhouse of North America to the west. Our ports now have the chance to supercharge their growth. The question now is not whether this is a good idea - but whether we can afford not to do it. 

Jason Millett is the chief operating officer for consultancy at Mace.