Freeports

Anna Turley Excerpts

Thursday 11th October 2018 Westminster Hall

[Anna Turley (Redcar) (Lab/Co-op)]

As always, Mr Hanson, it is a pleasure to serve under your chairmanship. I congratulate my right hon. Friend the Member for Birkenhead (Frank Field) and my near neighbour the hon. Member for Middlesbrough South and East Cleveland (Mr Clarke) on securing the debate. It is great to come together across the party divide to champion our area, because the hon. Gentleman and I both recognise how freeport status for Teesport could help and support our constituents.

My constituency lies at the mouth of the River Tees, where the North sea brings its cargo from around the world and ships queue to bring their goods to the third-largest port in the UK. It is from that port that steel from Redcar’s blast furnaces once sailed forth to build the world. Today, sadly, the site is desolate; the steelworks is now closed, and the 3,000 jobs it sustained are gone. But the land sits waiting, ready to drive a new industrial renaissance for Teesside. A freeport could be the key to unlocking the site’s huge value and delivering thousands more jobs. It could create employment and economic activity in an area where the need is high.

The same is true across the UK, as the hon. Gentleman said. Of the country’s 30 largest ports, 17, including my own, are in the bottom quartile of local authorities in the index of multiple deprivation. They are crying out for the inward investment that a freeport could draw in, so we must take a radical look at proposals to support their economies.

Like the hon. Gentleman, I make no apology for lobbying for freeport status on behalf of the port in my constituency. Teesport has strong structural advantages that should make it favoured for freeport status, including a deep-water facility that provides lock-free access to the sea and strong road and rail services. The facility already handles 5,000 vessels and 40 million tonnes of cargo a year. The port is integral to the Teesside manufacturing complex, incorporating chemicals, engineering, renewable energy and agritech.

The South Tees development corporation is overseeing the former SSI site, the biggest industrial opportunity that the UK has seen since the second world war. The development corporation—the only one of its kind outside London—has set out its ambition to create 20,000 additional jobs in high-value manufacturing over 25 years, with £1 billion in gross value added for the local economy. That programme would be substantially enhanced by the creation of a freeport. Incorporating the development corporation area into a freeport area, together with the Teesport facility, and in conjunction with adjacent industrial sites such as Wilton and North Shore, could help the region to build on its strengths in chemicals, steel, energy and logistics and realise our vision to become the most attractive place in the country for high-value manufacturing.

With the North East of England Process Industry Cluster leading the way, Teesside is the location for the largest integrated chemical complex in the UK—the second largest in western Europe in manufacturing capacity. The sector has inputs to a range of other key industries such as aerospace, automotive and life sciences. It is highly productive and competitive but faces a number of challenges, such as increasing global competition, high operating costs and skills shortages. A freeport could be part of a range of policy solutions to maintain and enhance the attractiveness of investment in the chemical sector in the UK and on Teesside. Freeport status for Teesside could make the area the gateway of the north, rebalancing the economy and making the region’s manufacturing base more competitive and attractive.

As the hon. Member for Middlesbrough South and East Cleveland noted, a study commissioned this year by the global construction company Mace Group shows that a freeport in Tees Valley could create more than 17,500 jobs and contribute more than £1 billion to the local economy—more than enough to offset any loss to the Treasury in import tax revenue. That should be considered when we weigh up the economic advantages. For an area in which unemployment is above the national average and many in work have to travel further afield or take insecure jobs, the proposal could be transformative.

As I mentioned, there are many areas similar to mine that have suffered deprivation and industrial decline, and that could see an economic boost delivered by a freeport. A freeport could also future-proof many of our other industries, which are battling to stay increasingly competitive in turbulent world markets. We only have to look around the world to see how our competitors are taking full advantage of freeports. Approximately 3,500 freeport zones exist, employing 66 million people across 135 countries. We are clearly lagging behind the rest of the world in this area.

Freeport zones are recognised around the world as playing a major role in retaining, reshoring and growing domestic manufacturing activity and boosting trade. There are 250 free trade zones in the US, and freeport zones also play a major role in the economies of Singapore, Hong Kong, Indonesia and the United Arab Emirates. However, I would urge caution when we are developing the model, to ensure that there is no erosion of employment rights, environmental rights or health and safety rights. It is really important that we look at the models that are being used around the world if we come to develop our own.

My view diverges slightly from that of the hon. Member for Middlesbrough South and East Cleveland, who said the advantages of freeports are dependent on being outside the EU. We could be taking advantage of them right now—indeed, he mentioned the legislation that we had in the past for models in the UK. Other member states already have freeports, including the ports of Bremerhaven in Germany, Le Verdon in France, and Shannon in the Republic of Ireland. In fact, there are currently over 85 freeport zones in the European Union. There are no barriers, but there is a lack of political will.

While this is the first debate that we have dedicated to the benefits of freeports, it is not the first time we have made this case in the House. Many Members, including myself and my neighbour, the hon. Member for Middlesbrough South and East Cleveland, have championed freeports for our own areas; indeed, I tabled amendments to the Taxation (Cross-border Trade) Bill that would have established the legislative basis for free zones to return to the UK. Until 2012, we had the legislation in place for five freeports, but unfortunately the statutory instruments creating them expired, and freeports were never fully explored. Moreover, the Secretary of State is already empowered to designate any freeport by statutory instrument under section 100A of the Customs and Excise Management Act 1979, which was referred to earlier and which is still in force.

I say to the Minister that the Government have an opportunity here to deliver transformative change to deprived areas across the UK, including my own. There could be no better expression of the northern powerhouse than delivering a freeport boost to northern ports and ports across the country, stimulating manufacturing, rebalancing the economy and creating jobs. I beg the Government to give serious consideration to this issue without delay.