Free ports to offer tax breaks for workers

Applications to become a free port are open until February; resident firms will benefit from tax breaks including on the purchase of land

Companies which hire staff at new free ports will be offered a tax break of £2,240 per worker as part of a bid to turbocharge growth.

Opening applications for towns and cities to become one of up to seven free ports in England, the Treasury said that perks on offer in the special economic zones will include relief from national insurance contributions for up to three years for employees earning a salary of up to £25,000.

James Heywood of the Centre for Policy Studies think-tank, which worked with Chancellor Rishi Sunak on a 2016 paper calling for free trade zones, said the move will help create new jobs as the country looks to a post-Brexit future.

The free port model creates hubs where goods can enter the UK with zero tariffs, before being manufactured to add value. Goods then leave for export or enter the domestic market.

Bids must be submitted by February and will be assessed by a panel overseen by the Ministry of Housing, Communities and Local Government ahead of a decision on locations in spring.

Tim Morris, chief executive of the UK Major Ports Group, welcomed the launch but said: “Potential bidders face a real challenge in submitting the kind of detailed proposals involving a range of different organisations that the Government is asking for.

“This is particularly difficult at a time when port operators are both working hard to keep pandemic-impacted supply chains moving and preparing to mitigate the impact of UK-EU border disruption. Simply put, bidders need more time.”

While applications have opened for ports in England, Mr Morris said that those in Scotland, Wales and Northern Ireland are still awaiting clarity on the bidding process. 

As Britain seeks to liberalise trade, new research by the Global Trade Alert showed a tenth or more of goods exports in 43 nations this year faced worse market access conditions as trade restrictions rose due to the pandemic.