Concerns raised for town's businesses after freeport decision
- Credit: James Bass
Felixstowe's new freeport could take business away from Great Yarmouth, an expert has claimed.
The Suffolk port was one of eight new freeports created across England as part of a government bid to regenerate deprived areas.
Freeport East, around Felixstowe and Harwich, will allow businesses to import goods for local businesses, such as manufacturing materials, tax free, before exporting products elsewhere.
Yet a report by think tank UK in a Changing Europe has raised concerns about the future of businesses in Great Yarmouth, with such benefits less than 100 miles along the coast.
Author Professor Catherine Barnard said: "I have some concerns for the simple reason, if the area around Felixstowe and Harwich is shown to be so attractive, and you're setting up a new business, do you set that up there where you get tax breaks, good infrastructure and probably a reduction in red tape for planning, or do you go to Great Yarmouth?
"The evidence shows from the US and elsewhere that freeports are very good news for the areas that have one.
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"There are further problems for the government that the more they laud freeports and say what a triumph they are, it means other areas of deprivation look on and ask why they haven't had some of it."
The eight freeports were announced in chancellor Rishi Sunak's budget, with the report arguing successes in attracting businesses to freeports around the world, such as the US, may simply be relocating jobs from other areas.
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Great Yarmouth MP Brandon Lewis, however, disagreed the town would suffer as a result, saying he believed Felixstowe's status could complement business in the Norfolk port.
He said: "I think it is good for our region to have a freeport.
"In Great Yarmouth and Gorleston we have an enterprise zone and our port is focused on the energy industry, and our area has experience now in both oil and gas and renewables with strong business growth around that.
"With our huge recent investment by the government in the third river crossing, and our recent announcements, I look forward to seeing our economy and local jobs continue to grow.
"The freeport in our region will be a good complement to boost the entirety of East Anglia and eastern economy."
What are freeports?
Freeports are areas that are exempt from import taxes on goods coming into the area which are not destined for the UK – effectively treating the area covered by the freeport as if it is not part of the country for tax purposes.
In theory this would make the area more attractive to manufacturing businesses because they could import materials tax-free before exporting their products elsewhere.
For instance, a clock manufacturer could import clock hands from France and clock faces from Algeria into a freeport without paying import tax. They could then turn the parts into a finished clock in a factory within the freeport area, before exporting the clock to Germany.
As well as shipping ports, freeports can also include areas around airports.