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Operators demand special economic status for UK ports and airports

A new coalition of ports and airports has called on the U.K. government to grant many transport hubs special economic status in a bid to stimulate international investment and reshore manufacturing in a post-Brexit Britain.

Launching a new report outlining their case on Sept. 9, the opening day of London International Shipping Week, Port Zones UK said designating ports and airports as “enterprise, development and free trade zones” would create dynamic centers of economic growth and trade.

A new report from the coalition, which includes the British Ports Association (BPA), Regional and City Airports (RCA), the ports of Milford Haven and Tyne and the Institute for Exports, claims that the U.K.’s imminent departure from the European Union has created “a fresh impetus for a new and innovative growth-generating policy in regional and coastal communities.”

It argues that for the U.K. to succeed outside the EU, business conditions need to be created that increase the flow of foreign direct investment. This, it adds, can best be achieved by making “zonal” enhancements to the terrestrial and marine planning systems, as well as “modifications to business-focused policies of enterprise zones,” which should be overlaid with any free port designation.

Specifically, the coalition would like accelerated planning permission procedures, expedited marine licenses and looser oversight of environmental legislation such as the Habitats Directive and environmental impact assessments. All this, it believes, will be easier to achieve in a post-Brexit Britain.

“As the U.K. recasts its global economic relationships, trade has never been so important to the fortunes of the nation,” said Richard Ballantyne, chief executive of BPA. “Business, consumer and investor confidence are — and will be — inextricably linked to the future success of the British economy.

“However, to forge new trade agreements and transition existing ties, strong domestic foundations are needed to maximize the value of inbound and outbound business flows through our international gateways.”

The launch of the new initiative must, of course, be viewed in the context of the U.K.’s current political chaos. Just weeks from a potential Oct. 31 no-deal Brexit, almost every conceivable outcome in terms of EU departure date and trade terms still are on the table. As reported in FreightWaves, the shipping and logistics sectors are doing their best to prepare in this sea of uncertainty and received welcome news last week when new measures were announced aimed at reducing the expected trucking and aviation chaos should the U.K. leave the EU Oct. 31.

Port Zones UK sees opportunity in a post-Brexit world, although its success will largely hinge on the success of the current — flailing — Conservative government. Unfortunately, Nusrat Ghani, MP and government Freeports minister, failed to arrive to deliver her keynote speech at the initiative’s launch.

Martin Vickers, Conservative MP for Cleethorpes and chair of the All-Party Parliamentary Freeports Group, tried to make amends. He said the success of Port Zones UK was dependent on Brexit being achieved in a way that enabled the U.K. to avoid EU State Aid regulations. He said its success also would rest on having a Conservative government in power. “For free ports to be implemented, Brexit must go ahead,” he added.

Alongside the Port Zones UK initiative, the U.K. government recently announced it was planning to create up to 10 free ports after Brexit, allowing firms to import goods and then reexport them outside normal tax and customs rules. Opponents of the scheme have criticized them as potential tax havens.

Ballantyne believes there is scope to roll out the scheme far beyond the 10 ports identified. Vickers conceded “governments are not good at picking winners,” a point which provoked some wry glances given the number of recent parliamentary defeats suffered by his party’s prime minister, Boris Johnson.

Setting aside the politics, the Port Zones UK report — “A Licence to Operate: ‘Enterprise, Development and Free Trade Zones’” — lays out the required changes to planning and the designation of enterprise zones the coalition believes are needed for the plan to succeed.

The report highlights Port of Tyne proposals to develop a virtual free zone to bolster U.K. advanced manufacturing. This multiple site designation would utilize supply chain technology to create a unified Customs area covering the port, a manufacturing cluster including the Nissan car plant at Washington and R&D development areas at neighboring enterprise zones.

Regional and City Airports also is promoting airport-based free trade development across its U.K. operations, which includes Bournemouth Airport. Andrew Bell, chief executive of Rigby Aviation, said with significant international flows and a runway capable of taking the largest aircraft, Bournemouth Airport and the adjacent 200-acre airport business park offered a prime location for a free trade area.

Ballantyne believes that the reforms outlined in the report allied with the government’s free port program have huge potential in a post-Brexit world.

“If done successfully, they can bring critical benefits to the U.K.,” he said. “In a global marketplace where competition for capital, resources and skilled personnel is fierce, it’s crucial that vital transport nexuses, like airports and seaports, are given the necessary business conditions to continue to grow.”