Budget 2021: Ben Shephard challenges Rishi Sunak on GMB
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Rishi Sunak’s latest budget, delivered on Wednesday this week, is the last before the Government expects to relax the nationwide lockdown on June 21. While the Chancellor has extended some essential policies from the last year, such as furlough and the Universal Credit boost, some new additions have not attracted a positive reaction. Freeports, which the country has operated before, have reentered the equation, and with them comes a host of potential problems.
Freeports provide merchants with a zero-tariff entry point to UK docks and airports.
Those who transport their goods to these locations, usually a warehouse located on-site, can process their stock and sell it on for a profit at no extra charge.
While these may seem like an attractive prospect on the surface, experts have long criticised their use.
The ports have been linked with illicit dealings and accused of only displacing rather than developing trade around the UK.
Dr Steve McCabe, an Associate Professor and economist at Birmingham City University, offered up his analysis of the incoming policy.
He told Express.co.uk while the Chancellor made freeports a cornerstone of his speech this week, they are controversial.
Dr McCabe said: “The eight new freeports announced in Wednesday’s budget may seem radical.
“They’re not. There were seven in the UK between 1984 and 2012.”
“However, their status, as areas in which there are tax breaks for investment by the private sector makes them controversial.
“Indeed, the fact that it is a way to import goods without tariffs being applied that are then sent on raises the concern, who benefits?”
Dr McCabe said one of the few benefits of a freeport could include warehouse construction, which will “create investment in the local economy”.
But the number of jobs required to reap the tax advantages or rebuild pandemic losses would not meet the “magnitude required”.
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Also, the jobs these ports create will reflect basic positions of warehouse work, meaning not highly paid or skilled.
Dr McCabe added freeports could also attract the wrong sort of attention.
He said: “As many critics of freeports point out, they may be places which attract those with nefarious intent.
“Perhaps the greatest problem is that firms simply relocate to enjoy the tax advantages as well as newer premises; no additional jobs may be created.”
“If freeports offer so many advantages, why did those opened some 37 years ago not survive?
“Sadly, it may be argued, freeports represent and expensive and eye-catching initiative and, beyond the headlines generated for Chancellor Sunak, are a wasteful way to spend taxpayer’s money.“
Mr Sunak will concentrate the incoming freeports in the following locations:
- East Midlands Airport
- Felixstowe and Harwich
- Humber region
- Liverpool City Region
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