13 July 2020
BPA: Remove the cap on Freeport ambitions
As the public consultation draws to a close today, the BPA remains committed to working with government to carve a UK Freeport model that works for ports around the UK although it has warned against a policy makers picking winners.
The BPA has written to the Chancellor of the Exchequer alongside its formal consultation response to reiterate that while the industry is enthused by government’s recognition of ports as a tool for economic growth, it feels a more inclusive policy is needed to compliment the ‘levelling-up’ agenda. In particular the BPA remains concerned by the arbitrary cap of establishing up to 10 Freeports and is seeking to remind government that an ambitious and inclusive UK Freeport model is within reach.
Commenting, Richard Ballantyne, Chief Executive of the British Ports Association and member of the Government’s Free Ports Advisory Panel, said:
Freeports are a potentially transformational opportunity for UK ports. As the UK Freeports model is carved out, government has the power to unleash growth and development and we welcome their recognition of ports being valuable tools to empower coastal communities. We have therefore made the case for a model that incorporates maximum ambition – in both scope and scale.
Coastal communities are often in areas of high deprivation and have also challenges resulting from the Coronavirus pandemic and lockdown. Without being more inclusive the Government risks being accused of favouritism in the implementation of its levelling up agenda.
The UK has 125 cargo-handling port areas, which include countless port and terminal facilities. Freeport status will benefit ports differently depending on their traffic/business profile and specialisation. Some will naturally be keener than others but there will be more than 10 of these that will want to benefit and Government should not place an arbitrary cap on this ambition. An ambitious and inclusive Freeports policy is possible if measures are expanded to the entire ports industry, which we have outlined to government within our response to the consultation.
Cap of 10 Freeports:
The market-led ports industry has strong concerns that this arbitrary cap will distort competition and promote certain regions over others. Despite government’s proposals being intended to liberate ports from certain rules and regulations to promote growth, they may actually pick winners and unnecessarily, and unsuccessfully, intervene in the market.
Selecting a handful of ports to be awarded Freeport status will, therefore, undermine any indication that all regions are invited to join the Government’s levelling-up agenda.
Tax incentives outlined by government are useful to ports, and while we note that some easements would be provided through Freeports, many of the measures outlined are already available to ports in one form or another.
Therefore, while we recognise that government may be cautious of a possible reduction in revenue to the Exchequer from customs and other tax activities if the number of Freeports is expanded above 10, we do not anticipate a significant change.
Rather, the Government and country may benefit through increased revenue from increased economic activity, which would generate further revenue for exchequer, through employment and NI contributions and business taxes. We are also not proposing any changes to corporate taxes.
The possibility of planning easements has been especially welcomed by ports. We appreciate government’s nod to permitted development rights, but believe that without more ambitious changes and a reference to marine-side planning, these proposals are somewhat underwhelming and do not provide much further assistance to ports than the current system. We must look at improvements the the Environmental Impact Assessment process and how planning conditions are often used as leverage points on development. That said the use of Local Development Orders and integrated regional plans is something we look forward exploring further.
The industry is certainly not calling for any erosion of planning rules but is looking to streamline the process to stimulate and incentivise growth at UK ports. The BPA does not want a race to the bottom - we want a robust and fair planning system that recognises the dynamic nature of the ecosystems that ports operate in and ensure that the systems designed to protect and enhance them can at the same time enable sustainable development. Changes in the planning system will be of no cost to the government but will unlock significant opportunities for investment for all ports.
The BPA has also submitted a comprehensive and detailed response to the consultation which concludes today.