The Humber Freeport – What it means for local employers
23rd July 2021
The Humber Freeport has been hailed as a fantastic opportunity to attract investment, jobs and growth in the region – but what is it?
What is a freeport?
Freeports are a particular kind of port operating under special regulations offering tax incentives and government support specifically designed to encourage investment from businesses that import, process and re-export goods. For example, at a freeport, imports can enter with simplified customs documentation and without paying tariffs. Businesses operating inside designated geographical areas in and around the port can then manufacture goods using the imports and add value, before exporting again without ever paying the full tariff on the original goods they imported – although a tariff may be payable on the finished product when it reaches its final destination, including if that destination is in the same country outside the freeport. The new freeports set up in 2021 will also have access to a regeneration and infrastructure fund worth up to £175 million.
Where is it and when is it happening?
It is hoped that the Humber freeport will be operational by the end of 2021 and will already be creating new jobs in 2022. The idea is that it will attract global investment in manufacturing and support economic growth and recovery in the region. It will cover an area of approximately 45k radius and include Grimsby, Immingham, Goole and Hull. The Humber freeport is one of the biggest new freeports in the UK, alongside Teesside.
What are the benefits?
Apart from the obvious benefits of global investment in the region – estimated at £3.5bn – and the creation of thousands of jobs, the knock-on effect of such levels of investment boosts the local economy through the manufacturing supply chain. This has been proven at other freeports to impact on those both inside and outside the freeport ‘zone’ that benefits from tax breaks and special customs arrangements. Crucially, post-pandemic the global investment could accelerate recovery of businesses in the region, through increased opportunities and rapid growth. The Humber freeport operators intend to create packages with incentives for new investors to use local existing businesses within their supply chain, with the specific aim of ensuring that local businesses surrounding the port benefit from its creation.
Is this because of Brexit?
No, not really. The UK could have set up freeports as a member of the EU. The difference now is that the UK government will have more control of exactly how it provides tax concessions to businesses and what flexibility there is on customs arrangements.
Is this something to do with the Energy Estuary I’ve heard about?
Not directly, but the freeport status should help drive investment in both the offshore wind and carbon capture sectors as a freeport is of benefit to the global businesses investing in the energy industry.