Boris Johnson Plans to Make the UK a World Leader in Freeports, Building 10 State-of-the-Art Facilities for Collectors After Brexit

The government promises the initiative will create thousands of jobs but critics say it will encourage tax evasion and money laundering.

British Prime Minister Boris Johnson attends the first meeting of the National Policing Board at the Home Office on July 31, 2019 in London, England. (Photo by Kirsty Wigglesworth - WPA Pool/Getty Images)

The UK’s new prime minister, Boris Johnson, has quickly followed through on his campaign promise to establish “Singapore-style” freeports post-Brexit. Plans are coming together to introduce up to 10 freeports across the UK, which the government hopes will boost trade and cut through customs red tape.

The move comes as Johnson makes planning for a hard Brexit from Europe without a trade deal his government’s priority. He has staked his new premiership on leaving the European Union on October 31, “come what may.”  

The UK’s international trade secretary, Liz Truss, announced on Thursday that she hopes to launch “the world’s most advanced freeport model” as soon as possible, promising it will create “thousands of jobs.” The move was immediately criticized by the opposition Labour Party. Peter Dowd, the shadow chief secretary to the treasury, said that creating tax havens, where the super-rich can store their “art, wine, and gold,” is “payback for Tory funders and their mates.”

Ports and airports around the country will be able to bid to become a freeport. Front runners include one to the east of London at the port of Tilbury on the Thames. Tax and technology experts have joined ministers on a newly established Freeports Advisory Panel, which will help set them up.

Johnson, who has promised to take the UK out of the EU customs union by Halloween this year “do or die,” took to the idea of freeports during his campaign to become leader of the Conservative Party. Sometimes known as “free zones,” they are areas where goods, including valuable artwork, cars, and jewelry, can be imported and processed while avoiding customs duties before they are exported again. They can also be used to import raw materials, which can be transformed in situ into finished products ready to export.

International Trade Secretary Elizabeth Truss. Photo by Chris J Ratcliffe/Getty Images.

International Trade Secretary Elizabeth Truss. Photo by Chris J Ratcliffe/Getty Images.

The high-security storage facilities are under increasing scrutiny across Europe after EU experts found them to be a haven for money laundering and tax evasion

The UK’s chief secretary to the treasury, Rishi Sunak, said that the government will introduce freeports to “areas that could benefit the most.” The mayor of Tees Valley in the North East of England has floated the region as a freeport, extolling its potential benefits. Ben Houchen says it would “turbocharge jobs and growth,” as well as bring investment to the region. Other areas that have expressed interest include the port of Tyne in the North of England, and Milford Haven in Wales.

The US has several similar models called “Foreign Trade Zones,” including in Delaware and also in Miami, where Art Basel is held every December. Some 7 millions tons of goods pass through the Miami port each year.

A consultancy firm last year found that establishing seven freeports in the north of England could generate $10.8 billion for the UK, and create 150,000 jobs, according to Reuters. However, the UK Trade Policy Observatory, which aims to ensure that new trade policies are constructed in a manner that benefits all, suggests that the net benefits to establishing UK freeports would be limited. It said that much of this would simply be redistributing existing economic activity from elsewhere in the country. 

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