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Freeports have been a feature of UK economic policy since the 1980s, with their role and importance changing over time.

They are designated areas within a country that are exempt from certain taxes and regulations, making them attractive locations for businesses to set up and operate. They are usually located near ports and airports, aiming to stimulate economic activity such as trade, investment, and jobs.

Since the UK left the European Union, the role of freeports has again come to the fore. Speculation about freeports, Brexit and the future has been a key part of discourse about the UK’s economic future.

What role have freeports played in the UK up until now, and how is that likely to change?

When you do an internet search for freeports, UK, Brexit, you turn up a number of often contradictory answers. Let’s clarify.


What was the part played by freeports before Brexit?

In 1983, the Conservative government set out its plans to establish experimental freeports as part of a wider regional policy to modernise the British economy following a recession in the early 1980s.

After being re-elected for a second term, the government awarded freeport status to six areas including Belfast, Birmingham, Cardiff, Liverpool, Glasgow Prestwick Airport, and Southampton.

Although these freeports experienced some success, it was limited during their lifetime and by 2012, Prime Minister David Cameron decided not to renew the freeport licences.

A number of reasons were given for the lack of success, with the European Union often cited as a contributory factor. Since 2020, discussions about freeports, Brexit freedoms, and what comes next have gone hand in hand.


How Brexit has impacted freeports?

While it’s not true to say that being a member of the EU limits constituent nations from starting freeports, it does place some rules and restrictions on the kind of incentives they can offer.

Since leaving the EU, the UK has greater freedom to shape the kind of incentives it provides in freeports, not least to match the needs of the local economies in which they are located.

For example, in the Liverpool City Region Freeport, it’s hoped to encourage greater innovation in the area of green technologies.

However, detractors have argued that the UK had significant freedoms to shape freeport policy as a member of the EU but chose not to take it.


What might the future hold for freeports in Britain?


In the 2020 budget, the then Chancellor Rishi Sunak announced plans to establish up to 10 freeports across the UK, which will operate as special economic zones with their own customs rules, tax reliefs, and planning freedoms.

These freeports are expected to attract new investment, create jobs, and stimulate economic growth in regions that have been left behind by the global economy.

Contact us to find out more about freeports, the Liverpool City Region Freeport, SSO International Forwarding’s role within it, and how it can help your business to grow.

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