Essex council joining Freeport East in bid to bring jobs, business and growth to Tendring

It's hoped it will be a national hub for global trade and investment

Author: Sian RochePublished 28th Oct 2022

Essex County Council is set to become a member of Freeport East.

The freeport is being created to be a national hub for global trade and investment by making trade processes more efficient.

Essex County Council says Freeport East, which has its Essex base in Tendring, will create the opportunity for jobs and education and training.

It also hopes it will allow businesses to grow, become more profitable and encourage relocation to Tendring.

The Government says Freeports will be national hubs for global trade and investment, hotbeds for innovation by focusing on private and public sector investment in research and development and will promote regeneration through the creation of high-skilled jobs in ports linked to the areas around them.

Freeport East is based around the Port of Felixstowe and Harwich International Port, but includes sites in Stowmarket, Suffolk.

It comprises 275 hectares of space and facilities across three tax sites eligible for tax relief at Felixstowe dock, Bathside Bay in Harwich, and Gateway 14 in Stowmarket. There are also seven sites eligible for customs duty relief.

The Harwich Tax Site is intended to be developed as a Clean Energy Hub and create around 3,000 jobs.

However, the boundary of the tax site is largely comprised of areas which require to be reclaimed from the sea in order to provide a development platform, and a significant funding gap of £80m remains even after the provisional allocation of £7m of seed capital funding by Government and the site may or may not be delivered irrespective of the decision to become a member.

The company – formed from Essex County Council, Suffolk County Council, East Suffolk Council, Mid Suffolk District Council, Tendring District Council, New Anglia LEP, South East LEP and University of Essex – will be initially funded through capacity funding of £1m from the Government together with £80,000 per year from each local authority until at least 2024/25.

A statement as part of a cabinet decision set to be signed off said: “The council would have very limited financial risk as a result of participating in the scheme. The biggest risk is that we participate in the company, pay the £80,000 annual contribution and very few benefits arise for Essex.

“The main benefits to Essex would be the delivery of a Clean Energy Hub in Harwich. There remains a significant funding gap and this may not be deliverable.

“The creation of a Freeport makes it more likely to be delivered but it is unclear how much more likely it would be. It may be difficult to say that it is likely, but it is definitely more likely.”

Critics of freeports says they will create 10 new internal borders in the UK creating in effect tariff-free zones that could be hard to control.

Richard Murphy, chartered accountant and a political economist who is professor of accounting at Sheffield University Management School, writing on his blog said the effect of this exemption from tariffs is to provide a tax subsidy to products sold from the freeport if they are exported.

He also says that freeports are linked to “lax, and potentially unenforceable regulation” whose operation is very often outsourced to private freeport operators.

He added: “Do freeports actually encourage growth as their proponents claim? There is no evidence for it. At best there is evidence that they might encourage jobs to be moved into freeports from areas outside them.

“But there is no evidence that freeports actually create new jobs or growth. That’s why the Tories scrapped a previous experiment with them in 2012. They simply did not work for the economy as a whole.”

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