Ben Houchen: Why Free Ports are essential to post-Brexit trade

The main aim of the Northern Powerhouse agenda is to empower the North to take back control and take charge of our own destiny. We need to stand up for ourselves and be counted, so we can end the North-South divide—and it is against this criteria, and this criteria only, that the Northern Powerhouse’s success will be judged.

The Powerhouse’s detractors are more often than not the people who would complain about anything the government does, especially when it doesn’t support their long-cultivated narrative of dependence. No amount of taxpayers’ money will placate them, and the idea of having powers and responsibilities devolved to the North terrifies them.

Success can’t be achieved with slight changes to national or local government spending, however, but only with a transformational economic shift that empowers the North to make its own way in the world. Along with devolution and infrastructure investment, this means a fundamental change in the way we do business. This is something that can start with the creation of Free Ports.

Five of the UK’s twelve major ports are located in the North, and most notably those at the mouth of the river Tees. Each year, Tees Port and the Port of Hartlepool handle 27 million tonnes of cargo—trade that is worth £17 billion to the UK economy.

A report released today, by Mace Group, and endorsed by Secretary of State Liam Fox, indicates that ‘Supercharged Free Ports’ could provide the UK with a massive opportunity for growth if we have a proper Brexit, which means leaving the single market and being outside of a customs union. Mace estimates that this model could create 150,000 jobs and create an extra £12 billion of trade, if implemented across the ports in the North of England. This comes off the back of a fantastic Centre for Policy Studies report, penned by Rishi Sunak, the MP for Richmond, which also demonstrated the colossal benefits Free Ports could bring to the UK.

The Mace report is right to point out that the North is badly in need of economic development. This is an undeniable fact, and decades of taking our regional begging bowl to Westminster in the hope of a handout has delivered nothing but more misery.

Free Port status would be a great economic boon for Teesside, boosting our area’s specialist sectors, such as chemicals and pharmaceuticals, energy, and advanced manufacturing.

In short, Free Port status means changing the customs and regulatory environment in and around a port, making it easier and cheaper for serious UK and international businesses based there to import, export, and grow. It is estimated that this could create thousands of jobs in my own region. Not only that, but this would likely lead to the reshoring of good quality, well-paid manufacturing jobs, not seen in the UK for years.

The full benefits of the Northern Powerhouse will take time, as the effects of infrastructure investments, business growth, and devolution take hold. However, the one immediate positive the Northern Powerhouse has had is its brand. Far from being the cynical PR exercise it is often denounced as, the idea of marketing the north as a whole is paying dividends.

While individual Northern towns and cities aren’t comparable with London, the combined offering of the three regions of the Northern Powerhouse are. Combining this brand with Free Ports—first in Teesside, then across the entirety of the North—could be the spark that ignites the Powerhouse project.

Like most right-thinking northerners, I voted for Brexit, and I’m the only elected Metro Mayor to have voted for Brexit. Why? Because the global trade opportunities are exponential, with Free Ports being the perfect example of what being part of a post-Brexit UK economy could look like. The reason for this is that proper Free Ports can exist in no meaningful way within the European Union, owing to the UK’s inability to set differential tax rates under EU law. I’m pleased that Liam Fox recognises this, and I hope his colleagues follow suit, because support for this excellent post-Brexit opportunity would be significant to the regions.

If the North is going to play the part I know it can play in the economic success of UK plc, and do so in a sustainable way, we need to do it under our own steam. The ability to combine powerful post-Brexit Free Ports, free from the shackles of EU law, and with the capital expense write-offs and business rates discounts of enterprise zones, they would be a powerful tool for us as we strive for the economic powerhouse of the North.

Ben Houchen is the Mayor of the Tees Valley.

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