Freeport East takes another step forward
The final business case is due to be submitted anytime now
Backing has been given for the final business case for Freeport East to be submitted in the next fortnight and a new company to manage the enterprise to be formed.
But question marks have been raised over how much local businesses stand to benefit.
The final business case for Freeport East – one of eight new freeports across the country that offers tax breaks and benefits to drive investment and economic activity – must be submitted to the Government by April 15.
Suffolk County Council’s cabinet gave its unanimous backing to the business case at its meeting on Tuesday, and agreed for work to be pursued to form a company that will oversee the scheme made up of members of the current supervisory board.
Freeport East will unite the Gateway 14 business park being created off the A14 near Stowmarket with the ports of Felixstowe and Harwich.
Cited benefits include reduced VAT, lower stamp duty on new buildings within the site, lower rates of National Insurance contributions for employers within the tax zones (but employees will still have to pay the same) and five years of rate relief.
Richard Smith, Conservative cabinet member for economic development, said it would be “on the world’s major trade routes and will be a strategic hub linking UK businesses to suppliers and customers across the globe.”
But opposition Green, Liberal Democrat and Independent group leader Andrew Stringer has questioned the benefits to local firms.
He cited a small family-run company near the Gateway 14 site which will not be allowed to relocate into the new business park because the drive is to attract foreign firms rather than relocate existing Suffolk businesses.
“In order to compete with the new businesses coming into the Freeport, my constituent’s business is now at a distinct disadvantage because his business won’t be able to qualify for lower or zero VAT, lower National Insurance, no business rates for five years,” he said.
“Yet he will be excluded from the Freeport by his geography. But even worse his business rate payments will go into funding the Freeport.”
Cllr Stringer said it was “was sold as a chance for local sustainable growth, but instead settles for taxes on local business to fund onshore tax havens”.
Other questions raised included whether A14 upgrades will be included if the Freeport generates more vehicle movements and how planned hydrogen production from Sizewell B will be transported to Essex.
Cllr Smith said: “One of the core aims of the Freeport is to establish them as national hubs for global trade and investment, so the benefits of Freeports will be available to both home and foreign investors.”
Essex County Council has reported a potential ÂŁ80million funding gap from its side, but Cllr Smith said that would be made up from the development of Bathside Bay.
If the business case is approved, ÂŁ25million in seed-funding will be released from the Government, split between the three tax sites. Felixstowe will get ÂŁ12m, Gateway 14 ÂŁ6m and Harwich the remaining ÂŁ7m.
The 275-hectare Freeport will include a new green energy hub at Bathside Bay in Harwich, while “build to suit” business units can be created at Gateway 14 and industrial units close to berths eight and nine at Felixstowe are also among the offering.
An estimated ÂŁ330m of investment in infrastructure is expected, and around 13,500 jobs provided under the plans.
According to the county council’s report, the Felixstowe tax site is due to be fully active from 2023 or 2024, with hopes that Gateway 14 will have first occupation from as soon as this autumn.
The Harwich tax site is set to be active from 2024/25.