Teesside wins freeport status as leaders says area can be 'reborn as industrial powerhouse'

Teesside will become the UK’s first – and largest – free port after a landmark announcement by the Chancellor in Wednesday’s Budget. The Rishi Sunak said Teesport would be granted the ‘game changer’ status, in a move that will “turbo charge Teesside’s economy” bringing thousands of jobs and a GBP3.4bn boost to the area. Tees Valley Mayor Ben Houchen said future generations would look back on today as “the day Teesside, Darlington and Hartlepool was reborn as an industrial powerhouse”.

A free port is an area – either a shipping port or an airport – where goods do not incur import taxes. It brings major tax breaks for companies operating within the free port zone. The Chancellor has been mulling Teesside’s bid for a freeport since last month, after it was submitted by Mayor Houchen.

Rishi Sunak at the South Tees Development Corporation site

Last month PM Boris Johnson also hinted at a successful Teesside bid during a visit to Billingham’s Fujifilm plant, which is manufacturing the Novavax covid-19 vaccine.

He said Teesside was “one of the great opportunity areas” of the country – “if not Europe”. It’s thought a Teesside freeport will create more than 18,000 skilled, good quality jobs over the next five years and increase inward investment by GBP1.4bn. But it doesn’t end there.

The green light from the Chancellor is expected to generate many thousands more jobs in the supply chain and service sectors. It’s also hoped international investors will be drawn to the area. The bid covers sites across the region, including Teesworks, Wilton International, Teesside International Airport, the Port of Middlesbrough, the Port of Hartlepool, Liberty Steel, LV Shipping and PD Ports.

Teesside wins freeport status as leaders says area can be 'reborn as industrial powerhouse'Teesside Freeport Locations

Mayor Houchen said: “The Teesside Freeport marks the start of us returning to our rightful place on the world stage as a global player in advanced manufacturing and engineering.

“Today’s announcement now means that investors from across the world will choose to bring their investment to Teesside instead of elsewhere in the world. “Investment that previously would have wandered off to Holland or Germany will now come to Teesside, Darlington and Hartlepool – creating thousands of well-paid jobs for local people.” Teesside has the “largest development site in Western Europe”, he added, with “amazing infrastructure, a workforce to be envied and now the UK’s largest Freeport”.

“We’ve put the building blocks in place for local people to benefit from the tsunami of jobs and investment that will come to our area in the weeks and months ahead. “It’s taken nearly four years to turn this plan into a reality, but good things come to those who wait – and better things come to those who fight for what they deserve. “The future of our area has been set on a new path.

“A path of prosperity, investment, jobs and a better life for local people. “As we look towards our recovery from Covid, this allows us to not only recover but come back bigger, better and stronger than ever.”

Teesside wins freeport status as leaders says area can be 'reborn as industrial powerhouse'PD Ports’ Teesport.

What is a free port?

Freeports, or ‘free zones’ stimulate economic growth and are a key part of the Government’s much talked-about ‘levelling up’ agenda for ‘left behind’ industrial areas. The UK had seven free ports dating back to the 1980s, which were phased out by 2012.

Now they’re being reinstated. The Tees Valley was one of 10 areas across the country being considered by the Government. However opponents of Mr Houchen have warned that it is not a”silver bullet” for jobs and could merely see existing businesses shift from one location to another in order to take advantage of the benefits offered.

Will it cover the whole of Teesside?

All five council areas in the Tees Valley have worked “closely” in developing the bid for a Teesside free port, as well as businesses that rely on the River Tees.

Teesworks, Wilton International, Teesside Airport, the Port of Middlesbrough, the Port of Hartlepool, Liberty Steel and LV Shipping would all be covered by free port status. By spreading out the Freeport maximum benefit can be gained for the people of Teesside, Darlington and Hartlepool. These businesses already employ thousands of people.

What will it do?

A key part of Teesside’s plan for jobs, the Teesside Freeport will create 18,000 skilled, good-quality jobs within five years, boost the local economy by GBP3.4bn and support offshore wind, clean energy, chemicals and process, and advanced manufacturing sectors.

It also offers the opportunity to reshore good-quality manufacturing jobs from overseas, Mayor Houchen added, “all without reducing environmental protections or workers’ rights”. Covering 4,500 acres, the equivalent of 2,550 football pitches, the Teesside Freeport will be the biggest in the UK. It will increase inward investment into Teesside, Darlington and Hartlepool by over GBP1.4 bn.

Areas given Freeport status within the region will benefit from things such as tax reliefs, simplified customs procedures, streamlined planning processes to boost redevelopment and government support to promote regeneration and innovation. Today’s announcement is the culmination of years of work by the Mayor and the five Tees Valley councils. Mayor Houchen has been at the forefront of developing the UK’s Freeport policy for the last three years.

First working alongside Rishi Sunak before he entered government, and then taking the lead in driving forward the case for Freeports and making sure their delivery is a success.

When will it happen?

The first tax and customs incentives are expected to be in place by September.

What is the reaction from Labour?

Jessie Joe Jacbos, Labour mayoral candidate said: “Obviously, I welcome anything that brings jobs to the Tees, we all do – but Freeports are not a silver bullet solution to the problems we face. “It is not a quick fix for an area that has really suffered under 10 years of Tory government and four year of a Tory mayor. And Freeports are not new.

We have had them before and they weren’t a game changer then. They tend to move jobs rather than create them. That’s why the Con-Lib coalition wound them up.

“But if it means investment in the Tees I would welcome that – but we must ensure the new jobs are real jobs, secure and skilled jobs with good wages and conditions.

That is what we desperately need here.

“The incentives for business to come here are important though and we need to make sure we take the opportunity to build an economy fit for the future.”

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