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Birmingham Post
Birmingham Post
Business
Tom Houghton

Frank Field MP calls for post-Brexit free ports and says they could help create jobs and growth

There are new calls for post-Brexit free ports to be established in a bid to help boost jobs and growth.

Frank Field MP wants the Government to help businesses in ports like Merseyside by establishing areas that are physically within a country, but legally outside it for customs purposes, meaning goods do not incur import duty.

The pro-Brexit Birkenhead MP said he has been lobbying with Teesside MP Simon Clarke to establish free port areas as part of the economic programme once the UK has left the EU.

They are the subject of controversy however, with the EU arguing free ports can lead to money laundering or "terrorism financing", making it even harder to forge a post-Brexit trade deal with the bloc.

Mr Field said: "I’ve been lobbying hard to ensure that businesses along the River Mersey can opt to be part of a free port. Rishi Sunak, the new Chief Secretary to the Treasury, will be the person who decides on the financing in conjunction with Liz Truss, the new International Trade Secretary.

Frank Field is making a major announcement tomorrow (PA Archive/PA Images)

"A free port along the Mersey could provide a major boost to our manufacturing industry and create large numbers of jobs in our area. Safeguards would, of course, be required to prevent the scheme from being abused, but a new free port could provide such an exciting new opportunity for industries in Merseyside."

As well as Merseyside, there are also plans for Teesside to become a free port, a plan led by mayor of Tees Valley, Ben Houchen.

What exactly is a free port?

A free port is an area that is physically within a country but legally outside it for customs purposes, meaning goods that enter do not incur import duty.

They are formed in a bid to encourage economic activity, so firms in free ports can defer paying taxes incurred until the products have moved elsewhere.

What's the history of free ports?

The idea of free-trade zones has been around since the 14th Century - dating back to the Hanseatic League of north European states, which still exists in a different form to this day.

Elsewhere, Ireland's Shannon free zone was created in the 1950s as the world's first official free trade zone, all in a bid to help the struggling airport, which suffered from a lack of support from the government.

Even in the UK, free ports were created in the 1980s in cities including Liverpool, Birmingham and Cardiff in an initiative that ended around seven years ago.

An aerial view of Cardiff Bay looking across South Wales (South Wales Echo)

What advantages do they offer?

It means goods can be imported, processed, and then re-exported without incurring any duty.

That incentivises international businesses to use the free port as part of their supply chain, stimulating domestic manufacturing and creating jobs in the process.

Would free ports threaten a trade deal with the EU?

The idea of free ports has come under some criticism over the past months.

During his campaign to become Prime Minister , Boris Johnson promised "about six" free ports in the UK post-Brexit, saying they would give the areas in question an economic boost.

New Prime Minister Boris Johnson waves from the door of Number 10, Downing Street after speaking to the media (Getty Images)

The EU, however, raised fears that they could lead to money laundering or "terrorism financing", which would make it even harder for the UK to forge a trade deal.

That's not to say the EU doesn't have any free ports within it - it does, more than 80 in fact.

But the advantages of having a free port while inside the EU are small - the benefits are wider for countries outside of free-trade blocs.

In a report written by a Tory MP in 2016 , it was claimed free ports could create "tens of thousands" of jobs, although it would seem their success would depend on the trade deal - or lack thereof - the UK secures after Brexit.

While it's argued they would work better after a no-deal or hard Brexit and jobs may be created, those not in favour of free ports say the number of new jobs would be a small percentage of those lost once the UK leaves the single market.

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