Martin Vickers: My message to government is clear: green-light free ports and make the north open
Establishing free ports across the north of England would boost trade, create jobs and rebalance the UK’s economic divide, says Martin Vickers
As an island nation, the United Kingdom has always been reliant on its ports for trade. Brexit, presents a once-in-a-lifetime opportunity to capitalise and expand on our port infrastructure to boost our economy and rebalance the north-south divide.
We could achieve this by implementing a free ports policy across the country or as a northern cluster; discarding red tape, bureaucracy and costly tariffs. This will drive investment into our ports, creating jobs and boosting local economies.
Free ports are designated areas around a shipping port or airport which are separate for customs purposes. This allows goods to be imported and exported without paying tariffs. Around the world, around 3,500 free ports already exist but we do not have a single one in the UK at present. This puts us at a considerable disadvantage and poses a serious risk of us slipping behind some of our trading partners and competitors.
This is a policy that would disproportionally benefit the north. Former Treasury economist Chris Walker found that declaring seven northern ports (Grimsby and Immingham, Hull, Liverpool, Manchester Airport, Hull, Teesport and Port of Tyne) as free ports would boost trade by £12bn and create 150,000 jobs in the north. This represents more than 80,000 new highly skilled jobs and £4.7bn extra in the Yorkshire and the Humber alone.
Rebalancing the economy to correct the north-south divide is a mission of every government but we have yet to achieve it. In 2016 the northern economy created £330bn of economic output but, had north and south been balanced, this would have been around £400bn. That’s £70bn more – equivalent to £1,500 per northern household. If this government is serious about addressing the imbalance, free ports would be a logical means to an end.
A free port programme would, by default, target areas of high unemployment and deprivation. These tend to be found in rural and coastal communities which have weak or no links with the UK’s large cities. Grimsby and Immingham have been ranked in the bottom quartile of deprived areas, so a policy which led to a boost of investment in these areas should be universally welcomed.
ABP, which owns and controls much of the port infrastructure in my constituency and surrounding areas, is incredibly positive about the prospect of free ports being rolled out across the country. If done properly, there would be numerous benefits for this major port operator and other local businesses.
Projections show that free ports could close the north-south productivity gap by 15% which would be a welcome step to rebalancing the UK economy. Highly skilled jobs would be created in some of the most deprived parts of the country. To do this through organic growth, allowing northern businesses to thrive, is far more preferable than redistributive proposals to make the north richer by taxing the south.
Having discussed this with industry experts, I am convinced that the current plans for our future relationship with the EU – as outlined in the white paper and the withdrawal agreement – would be insufficient to make a success of free ports. The prime minister’s deal signs the UK up to key regulatory alignment commitments that make this policy almost a non-starter.
The UK must be completely free of EU anti-competition rules, laws on state aid and free from the shackles of Brussels’ bureaucracy. This makes the customs element to our exit negotiations vital.
By remaining in the customs union or a customs arrangement, it is highly likely that we will be too closely intertwined with the EU to strike a truly independent trade policy which would seriously hamper the opportunities available to our ports.
Free ports, if implemented properly, can attract new investment to some of the most disadvantaged areas of the UK without detracting investment from any other area. As a policy, it would be relatively easy to implement with no major initial investment in infrastructure needed but immediate results for businesses with increases in jobs and profits.