Pamela Chesterman reviews the progress so far for the nation’s freeports.
When the Conservative government issued its consultation in October 2020 on freeports, the ministerial foreword noted: “Most importantly, freeports will be a cornerstone of the government’s plan to level up opportunity across the country. So our criteria for allocating freeports will be geared towards areas of greatest need. This will allow us to drive forward investment and regeneration in some of the most deprived areas in the UK, delivering highly skilled jobs for people across the country.”
Arguably, it is one of very few models of levelling up that actually came to fruition and has had the desired effect, at least in part.
The publicised “core objectives” for the UK freeport model are:
- Establish UK freeports as national hubs for global trade and investment.
- Create hotbeds for innovation and net zero initiatives with private and public sector investment in research and development.
- Promote regeneration and the creation of high-skilled jobs.
Where are they?
To date, there are eight English freeports: East Midlands; Freeport East (Felixstowe and Harwich); Humber; Liverpool City Region (encompassing Liverpool, Halton, Knowsley, Sefton, St Helens and the Wirral); Plymouth and South Devon; Solent; Teesside; and Thames.
All areas are within combined authorities’ governance, to supposedly allow for better and more locally focused governance and simplified procedures that allow for greater connectivity.
All are port-based, except East Midlands (including East Midlands Airport), which has led on the development of a hydrogen skills academy – a collaboration between the public and private sectors to support the hydrogen economy.
Freeport East is a world-leading centre for clean energy production; Humber makes the most of its region’s renewable energy projects; Liverpool City Region is a multi-modal transatlantic port handling 45% of the UK’s trade with the US; Plymouth and South Devon harnesses marine, defence and space capabilities; Solent has unrivalled connectivity as a geographical location; Teesside is one of Britain’s biggest chemical clusters; and Thames is a multi-modal logistics and manufacturing hub.
What are the benefits?
The government’s initial intention for freeports included:
- Implementing wider permitted development rights to better align ports with those available to airports and seaports.
- Encouraging local authorities to exercise their powers to grant local development orders, which are a kind of hybrid mechanism – half planning permission/half permitted development right. Cheaper customs, with favourable tariffs, VAT or duties.
- Full relief from stamp duty land tax until 30 September 2026.
- 20% structures and buildings allowance for non-residential properties brought back into use before 30 September 2026.
- Capital allowance of 100% until 30 September 2026.
- Full business rates relief available to apply until 30 September 2026.
- National insurance relief from April 2022 until at least April 2026.
- Infrastructure funding, to improve transport links.
The Conservative government committed to the long-term support of harbour development through the Maritime 2050 strategy. This is supported by the National Policy Statement for Ports, which records the need for new seaport infrastructure and provides the consenting framework for nationally significant port developments in England and Wales.
Government grants were available through freeport status, but project managers are stressing the importance of getting engaged early to make the best use of these. To date, the biggest benefits have been received by landowners; however, to make genuine progress and build on the success of freeport status, local businesses and adjacent landowners must get involved. This includes investment zones (currently Greater Manchester, Liverpool City Region, North East of England, South Yorkshire, West Midlands and Tees Valley) launched at the Spring Budget 2023 allocating £160m to designated areas in order to stimulate local growth and investment.
Where next?
Up until the general election, and at the time of writing, there still seems to be a lot of promotion and support for freeports and their ability to act as a catalyst and real driver for innovation and connectivity. On 13 January 2023, it was announced that Inverness and Cromarty Firth Green Freeport and Forth Green Freeport had been jointly selected by the Scottish and UK governments to become the first “green freeports”. Work has spread into Wales and continues in Northern Ireland to expand freeport status across the whole of the UK.
Despite all these incentives, the proposal for relaxed and streamlined planning has not come to fruition – at least not in the format initially intended. In the original business cases for freeports, the suggestion had been for local authorities to prepare local development orders to effectively provide blanket permissions, in order to incentivise development within the freeport areas, aligned with the aims of that particular freeport and to allow landowners and businesses to expand without the need (or delay) of applying for planning permission. To date, there appears to be no LDO focused on freeports.
At UKREiiF 2024, East Midlands Freeport promoters spoke about how their local authority was working with the landowner and project managers to streamline the planning system, but they made no reference to LDOs, instead suggesting mere acknowledgement of the benefits of priority and assistance given in the usual manner. While this is to be commended, without any legislative backing or agreement on parameters, there is arguably nothing to compel either side to keep to any conditions or limitations or be called to question over any alleged deviation.
What impact will a change of government have?
The Labour website proudly declared on 18 April 2024 that “Labour will invest £1.8bn in ports to reverse 14 years of industrial decline”. However, if we apply a degree of scepticism and consider the language used, this is not an investment plan for “freeports”, but ports – something very different in concept and operation. For one, it will not cover East Midlands, which is not a port.
So one must assume that Labour’s intention is not necessarily aligned with freeports as implemented by the Tories. We will have to wait and see what they deliver.
Pamela Chesterman is a planning partner at Irwin Mitchell
