Mid Suffolk council approves plans for Freeport East despite 'tax haven' fears
Freeport East will include the Gateway 14 business park near Stowmarket, as well as the ports at Felixstowe and Harwich
Backing has been given by Mid Suffolk District Council’s cabinet for the Freeport East business plan that will incorporate a new business park off the A14 – but fears of an “onshore tax haven” have been voiced by the opposition.
The full business case for Freeport East must be submitted by April 15, with the Conservative and Independent coalition at Mid Suffolk agreeing to endorse the document.
Freeport East will see new tax and custom zones created at the ports in Felixstowe and Harwich, as well as the new Gateway 14 business park in development off the A14 near Stowmarket, while Port One in Great Blakenham will benefit from customs site status.
It aims to attract new investment and outside businesses to the area – which will be able to take advantage of tax breaks – and boost the region’s economy.
It is expected that the 275-hectare freeport site will generate investment north of £330million and create more than 13,000 new jobs.
Gerard Brewster, Independent cabinet member for the economy and deputy leader of the council, said it was a “once in a generation opportunity”.
“Freeports are a flagship HM Government programme that play an important part in the UK’s post-Covid and post-Brexit economic recovery,” he said.
“The inclusion of Gateway 14 as a tax site has meant that 100% of the business rates received for all development on this site will be retained locally for the next 25 years.
“This will be split into pots, some of which we will be able to reinvest in Gateway 14 to deliver added value for this landmark development.
“Most notably, bringing forward development of the innovation and skills centre and funding additional net zero initiatives on-site.”
Cllr John Whitehead, Conservative cabinet member for finance who is also a councillor director for Gateway 14, said: “This development with Freeport East is a really exciting opportunity – it really is the icing on the cake for our site in Stowmarket because the tax and customs advantages for business, and the ability for the council to retain business rates is a real bonus.”
Suffolk County Council’s cabinet agreed to back the full business case at its meeting last week, while East Suffolk Council’s cabinet is to discuss the business plan in a closed-session meeting on Wednesday, April 5.
If the business case is approved, seed funding of £25million will be released by the Government, split between the three tax sites. Felixstowe will get £12m, Gateway 14 £6m and Harwich the remaining £7m.
But opposition councillors say they have “grave concerns” about Gateway 14’s designation.
Andy Mellen, leader of the Green and Liberal Democrat group, said: “The site is wholly-owned by Mid-Suffolk, and the original vision was for a high-quality manufacturing hub with a food enterprise zone.
“We think that the Freeport proposal has skewed the development in a different direction, and we fear it will largely become an onshore tax-haven, a logistics and transport hub with fewer, lower-paid jobs than originally envisaged.
“The proposal documents suggest that Freeport East will be a green energy hub – but there are still questions about how this aspect will be delivered at Gateway 14.
“Lastly, it is incredibly disappointing that, despite the site being right next to the main railway line, there will be no rail connection for goods traffic, meaning that all the extra trade produced will have to travel along the A14 on lorries.”
Deputy group leader John Field added that the scheme needs to deliver high quality jobs and be mindful of “possible impacts on existing businesses of competitors who are exempt business rates, national insurance and import duty”.
Timescales laid out indicate that 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.