The Regenerative Potential of Freeports
Can freeports ‘level up’ Britain, from one coast to another? Metaphorically, this is what the freeports agenda aims to achieve. Launched in 2020’s October budget, freeports are intended to assist in Government’s ambitious plans to regenerate all corners of the UK. Mike Stacey, Group Head of Projects (Commercial) at Associated British Ports (ABP), explains.
With a network of 21 ports across Britain, ABP is the UK's leading port operator. It handles 25% of the nation's seaborne trade, contributing £7.5 billion pa to the economy and supporting 119,000 jobs.
ABP is also involved in four of England’s eight freeports. ‘The English Freeports are, in essence, enterprise zones by-the-sea, with an attractive range of incentives, including tax breaks, available to encourage new investment,’ explains Mike. ‘Furthermore, the initiative covers bespoke customs areas which, although situated within the UK, are considered to be outside for customs purposes’. Goods can enter and exit without incurring the usual import tariffs, until they actually leave the designated zone and enter the usual UK customs area. This could help importers, especially of seasonal goods, which can be held duty-free at the port until needed at the shops.
‘Although they are of primary interest to importers, exporters, and manufacturers, freeports also offer a multitude of opportunities to a range of businesses supporting these activities.
“During the pandemic,
300 homeless people in Cambridge were offered emergency accommodation in hotels, council flats and vacant student accommodation.”
“The English Freeports are, in essence, enterprise zones by-the-sea, with an attractive range of incentives, including tax breaks, available to encourage new investment”
About our professionals
Michael Stacey
Group Head of Projects – Commercial Associated British Ports
Michael Stacey is ABP’s Group Head of Commercial Projects, based in London. Michael leads on a number of commercial matters, including ABP’s participation in Freeports and new seaport border controls, across ABP’s network of 21 UK ports which, collectively, handle around a quarter of the nation’s sea-borne trade.
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‘ABP was successful in bidding for the Humber and Solent freeports, in which we are a leading partner, as well as in Liverpool City and Plymouth. The opportunities within these various locations vary greatly.
So, will we see the ripple-effect of regeneration that emanates from popular towns and cities; or, Docklands-like, will the boundary be all too clearly defined by contrasting levels of prosperity?
At the time of speaking to Mike, the country was undergoing a CO2 crisis which threatened everything from frozen food to dry ice in nightclubs; an absence of lorry drivers was causing a fuel shortage and post-Brexit border controls were purported to threaten a turkey-deprived Christmas. Can Boris’ ‘magic bullet’ address this, and more?
‘Freeports will drive inward investment in new low-carbon industries that will create jobs and promote regeneration in the country’s major trading estuaries. A freeport also enables companies to hold a buffer-stock within the UK in a tax-free environment – so it is envisaged that seasonal goods can be brought into the country in advance of the shelves emptying. Furthermore, increased demand and activity will lead to a greater supply of storage, including temperature-controlled warehouses.’ Freeports, it would seem, have the potential to deliver both ABP’s mission to ‘Keeping Britain Trading’ as well as the Government’s ambitions.
‘Freeports can accelerate the growth of renewable energy and innovation hubs, helping to meet environmental protection and decarbonisation targets. The Humber, as an ‘energy estuary’ is at the forefront of renewable energy, driving the continued growth of the offshore wind sector through manufacturing, assembly, installation, operations, and maintenance. It’s set to grow as the UK seeks to reach 40GW of installed capacity by 2030. Already home to the Siemens Gamesa offshore wind facility, the Humber ports are also critical to emerging green technologies including carbon capture, utilisation and storage, and hydrogen. Due to the favourable fiscal conditions, we anticipate investment and innovation at unprecedented levels, which when coupled with training and up-skilling, will have a huge regenerational impact.’
From a ‘levelling up’ perspective, the impact beyond the boundary is critical. Each freeport has a 45km circular boundary – which can be quite arbitrary. ‘Ideally we’d have squashed and elongated the circle to fit the geography of the estuary,’ says Mike.
‘Fiscal benefits have been repeatedly proven to encourage employment, up-skilling and investment in assets. But also important is the potential to drive public and private investment with a view to supporting regeneration and placemaking, including the delivery of homes and social infrastructure.
‘Fostering innovation and developing the necessary skills base is key. It formed an integral part of our successful bids and will be enhanced through close collaboration with academic institutions. ABP’s ports benefit from established partnerships with leading universities and higher education colleges providing an important link to upskilling and training.’
Mike accepts that a challenge may exist at the boundary: ‘Estuaries have natural hinterlands – partly because of the number of jobs at the port; partly because of geography. But rather than reinforce the disparity, strategic, economic, and social planning, supported by the financial benefits that the freeport provides, can mitigate it.
‘We understand that regeneration isn’t solely financial but linked to housing and social infrastructure. As the delivery vehicle for this and much more, the consortium must involve local authorities. In the Humber, our public / private partnership works effectively, in a dialogue which would not have happened without the move to becoming a freeport.’
So, are freeports the panacea to delivering the levelling up agenda? ‘If you look at their distribution there is huge potential for levelling up – areas such as the Humber, Teesside and the Mersey are considered to be amongst the most deprived in the country, primarily due to jobs losses in traditional industries and the widespread adoption of containerisation within the shipping industry. And similarly, areas within Plymouth and Southampton are relatively high on the Deprivation Index. It’s important to see the need to level up not purely on national North / South terms but on a more regional, if not local level’.
“Fiscal benefits have been repeatedly proven to encourage employment, up-skilling and investment in assets”
The Regenerative Potential of Freeports
‘Freeports can accelerate the growth of renewable energy and innovation hubs, helping to meet environmental protection and decarbonisation targets. The Humber, as an ‘energy estuary’ is at the forefront of renewable energy, driving the continued growth of the offshore wind sector through manufacturing, assembly, installation, operations, and maintenance. It’s set to grow as the UK seeks to reach 40GW of installed capacity by 2030. Already home to the Siemens Gamesa offshore wind facility, the Humber ports are also critical to emerging green technologies including carbon capture, utilisation and storage, and hydrogen. Due to the favourable fiscal conditions, we anticipate investment and innovation at unprecedented levels, which when coupled with training and up-skilling, will have a huge regenerational impact.’
From a ‘levelling up’ perspective, the impact beyond the boundary is critical. Each freeport has a 45km circular boundary – which can be quite arbitrary. ‘Ideally we’d have squashed and elongated the circle to fit the geography of the estuary,’ says Mike.
‘Fiscal benefits have been repeatedly proven to encourage employment, up-skilling and investment in assets. But also important is the potential to drive public and private investment with a view to supporting regeneration and placemaking, including the delivery of homes and social infrastructure.
“FISCAL BENEFITS HAVE BEEN REPEATEDLY PROVEN TO ENCOURAGE EMPLOYMENT, UP-SKILLING AND INVESTMENT IN ASSETS”
‘Fostering innovation and developing the necessary skills base is key. It formed an integral part of our successful bids and will be enhanced through close collaboration with academic institutions. ABP’s ports benefit from established partnerships with leading universities and higher education colleges providing an important link to upskilling and training.’
Mike accepts that a challenge may exist at the boundary: ‘Estuaries have natural hinterlands – partly because of the number of jobs at the port; partly because of geography. But rather than reinforce the disparity, strategic, economic, and social planning, supported by the financial benefits that the freeport provides, can mitigate it.
‘We understand that regeneration isn’t solely financial but linked to housing and social infrastructure. As the delivery vehicle for this and much more, the consortium must involve local authorities. In the Humber, our public / private partnership works effectively, in a dialogue which would not have happened without the move to becoming a freeport.’
So, are freeports the panacea to delivering the levelling up agenda? ‘If you look at their distribution there is huge potential for levelling up – areas such as the Humber, Teesside and the Mersey are considered to be amongst the most deprived in the country, primarily due to jobs losses in traditional industries and the widespread adoption of containerisation within the shipping industry. And similarly, areas within Plymouth and Southampton are relatively high on the Deprivation Index. It’s important to see the need to level up not purely on national North / South terms but on a more regional, if not local level’.
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