In March 2021, as part of the Spring Budget, Tees Valley was announced as one of the first places to get Freeport status under the new Government policy to create Freeports across the country.
Covering 4,500 acres, the Teesside Freeport is the largest in the UK. To put the size into perspective, it is equivalent to 2,550 football pitches. It will create more than 18,000 jobs and provide a £3.2billion boost to the local economy over the next five years.
The announcement came following a successful bid submitted earlier in the year. In developing the Teesside Freeport bid Mayor Houchen worked closely with all five local councils along with local businesses that rely on the River Tees, as well as those across the region.
But what is a Freeport and what does it mean for the Tees Valley?
What is a Freeport?
Freeports are tax and secure customs zones where business can be carried out inside a country’s land border, but where normal tax and customs rules don’t apply. They can offer business incentives such as no stamp duty, five years of zero business rates, and full rebates for construction and machinery investment. While located geographically within a country, freeports essentially exist outside its borders for tax purposes.
What are the benefits of a Freeport for an area?
In the UK. Freeports will enhance trade and long-term investment, boosting growth and high-skilled jobs, as well as increasing innovation and productivity in the region’s key sectors and supply chains. As national hubs for global trade, these areas will play a key role in regeneration and job creation. While creating dynamic economies that capitalise on new ideas and create an environment to attract new business.
Those operating within a freeport will be able to benefit from deferring the payment of taxes until their products are moved elsewhere, or can avoid them altogether if they bring in goods to store or manufacture on-site before exporting them again. These incentives are designed to attract inward investment from businesses that import, process and then re-export goods to build new facilities. Such as manufacturers or research and development facilities.
Other benefits include employer NI contributions relief. As well as Enhanced Capital Allowances and Structures and Buildings Allowance.
Economic analysis carried out as part of developing the bid found that the Teesside Freeport would create more than 18,000 skilled, good-quality well paid jobs over the next 5 years
- establish Freeports as national hubs for global trade and investment across the UK; intensify the economic impact of our ports by enhancing trade and investment and generating increased economic activity across the UK
- promote regeneration and job creation; create high-skilled jobs in ports and the areas around them, prioritising some of our most deprived communities to level up the UK economy
- create hotbeds for innovation: create dynamic environments, capitalising on new ideas and fostering the conditions that will attract new businesses, investors and innovations
The benefits of a Freeport to businesses
As specially designed areas with beneficial economic regulations, Freeports can help businesses achieve sustained growth, and may be able to save them time and money through:
- Stamp Duty Land Tax relief
- enhanced capital allowances for investment in plant and machinery and structures and buildings
- 5 years of business rates relief
- employer National Insurance contributions relief
- deferrals and exemptions from duty
- supportive local planning environments with constructive public-private partnerships
Where is the Teesside Freeport?
The Teesside Freeport covers sites across the region, including Teesworks, Wilton International, Teesside International Airport, the Port of Middlesbrough, the Port of Hartlepool, Liberty Steel and LV Shipping. The site would cover approximately 4,500 acres the equivalent to 2550 football pitches. By spreading out the Freeport maximum benefit can be gained for the people of Teesside, Darlington and Hartlepool.
The journey to becoming the largest Freeport in the UK
In early 2019, the Mayor submitted a policy paper to Government championing a Freeport in Tees Valley, building on the recommendations of a 2016 policy paper by now Chancellor of the Exchequer Rishi Sunak MP, forming part of a campaign which launched in 2018 and was backed by more than 50 leading employers in the area.
The consultation came following last year’s visit to the region by Liz Truss MP, Secretary of State for International Trade, when she announcement that a Freeports Commission would be established by Government to look at creating up to ten such zones across the UK.
In May 2020, Mayor Houchen took another step forward in securing a Freeport for the region with the finalisation of a submission to the Government’s consultation on Freeports. The formal response, covering customs, tax, planning, regeneration and policy considerations, makes the case for such a zone in the region, and Mayor Houchen continues to work with councils, stakeholders and businesses to lay out the benefits a Freeport would bring to Tees Valley.
The consultation submission was backed unanimously by the Combined Authority Cabinet.
In November the Government launched its Freeports bidding prospectus, inviting regions throughout the UK to make their case to play host to these economically competitive zones. The Mayor led the Tees Valley’s formal bid for Freeport status.
In February 2021 the Tees Valley submitted its bid to become a Freeport and in March 2021 it was announced that we had been successful in our bid.
To find out more about the Teesside Freeport and how you can be involved, please contact email@example.com or call 01642 524400 and ask for our Invest Tees Valley Team or visit the Teesside Freeport website: Teesside Freeport – Britain’s best connected trade region