The UK Freeports initiative has received a resounding endorsement from the Labour Government, reinforcing its pivotal role in fostering economic expansion across the country
The recent Budget announcements reveal a strong commitment to integrating Freeports into the national industrial strategy, recognising the initiative as a catalyst for both economic regeneration and industrial innovation.
Simon Bird, Chair of Humber Freeport, expressed his enthusiasm for this new government backing, which he sees as a recognition of the significant advances already achieved through Freeports: “This is a major vote of confidence in Freeports by the new Government. It highlights the crucial contribution Freeports are making to the drive for economic growth.” He pointed to the Humber Freeport’s success in attracting over £1 billion in investments, particularly in decarbonisation, skills, and technological innovation projects.
Humber Freeport: Decarbonisation and Skill Development at the Forefront
The Humber Freeport has emerged as a national leader within the Freeports programme. Supported by dedicated funding and incentives the Humber region has drawn substantial investments, particularly in green and sustainable industries. Among these developments, the Hull East tax site is set to expand significantly with a new £250 million production line at Mitsubishi Chemical Group’s Saltend facility. This expansion will double the facility’s capacity, creating numerous new roles and securing existing jobs, a testament to Freeports’ local economic impact.
This commitment to regional industry extends beyond Humber. Across the UK, Freeports are demonstrating their potential to attract capital and expertise in targeted sectors, from renewable energy to advanced manufacturing, positioning the UK as a competitive player in critical global markets.
Tax and Customs Incentives: A Gateway for Business Growth
Freeports offer companies a range of tax and customs incentives designed to lower costs and encourage investment in strategic locations. These include employer National Insurance Contributions (NICs) relief, allowing employers to claim up to £25,000 in eligible employee earnings annually for three years. This measure not only reduces costs but also incentivizes businesses to build and retain a skilled local workforce.
Customs efficiencies further enhance Freeports’ appeal, as businesses operating within these zones can defer or waive tariffs on imported materials. This is especially advantageous for manufacturers and exporters handling raw materials or intermediate goods, enabling them to operate more cost-effectively and compete on a global scale.
Regional Transformation through Strategic Investment Zones
As hubs of growth, Freeports are evolving into Strategic Investment Zones, aligning with broader government priorities. These zones offer enhanced investment incentives on infrastructure and equipment, allowing companies to scale operations and improve productivity. In the Humber for instance, there is a focus on rare earth metals processing, which supports the UK’s ambitions in green technology and energy independence.
In addition to Humber, Freeports across the UK are advancing sector-specific goals. Teesside Freeport is positioning itself as a centre for offshore wind turbine production, while the Anglesey Freeport in Wales is driving investment in renewable energy projects, such as solar and tidal power. These targeted initiatives help address local economic challenges, attract high-value businesses, and drive sustainable growth.
A Future Filled with Opportunities
Freeports have already garnered significant investment, with over £6 billion secured to date and approximately 7,000 new jobs created. While the initial roll-out was measured, Freeports’ appeal is growing rapidly as more businesses recognise the potential of these zones to foster competitive advantages. With ongoing government support, the Freeports programme is poised to expand further, providing even more attractive conditions for businesses looking to establish or enhance operations within the UK.
At VARTAN we are closely tracking developments within the Freeports programme to support our clients’ supply chains and identify strategic opportunities that align with their goals.
Whether exploring cost-saving measures, optimising operations or securing tax efficiencies, our team is prepared to provide insights and guidance on how Freeports might benefit your business. Contact us today to discuss how VARTAN can help you unlock the potential of Freeports for your business success.