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  • Writer's pictureFirst Port Global (FPG)

UKMPG comments on "no-deal" Brexit

With Free Ports on the agenda, the UK Major Ports Group has reiterated its priorities as, officially at least, the country’s new Prime Minister Boris Johnson prepares to leave the EU without a deal if the Irish "backstop" is not removed from deal negotiated by Theresa May.

In his PM acceptance speech Boris Johnson remarked that "free ports...will drive growth and thousands of high-skilled jobs in left-behind areas." There is clear support for this. For example, Ben Houchen, The Mayor of Tees Valley Combined Area, has said that turning Teesport into a Free Port is just "common sense." Johnson previously stated that he would like to see about six Free Port clusters in the UK.

“Regardless of your views on Brexit, the right thing to do is to prepare for a range of Brexit outcomes and do so quickly," said Tim Morris, CEO of UKMPG. "Most of Britain’s ports already successfully handle huge volumes of non-EU trade and have the systems and processes to do more.

"The ports sector has successfully navigated major change in the past and has been working hard to prepare for Brexit. But it is clear that significant parts of UK business are not ready for Brexit and are facing difficulties in becoming so."

As such, Morris continued, the Government must do four very practical things as a matter of urgency to speed the preparation of UK business for Brexit:

  • Reset the short-term border measures that were in place for March 29th to October 31st so industry has more certainty on what it’s preparing for

  • Substantially step up the public information campaign on getting ready for Brexit and look at proactively issuing international trader registration numbers

  • Make sure that short-term border measures for ferry ports apply to all ports so British business has the widest possible range of options for easier post-Brexit trading

  • Deliver the upgrades to common customs IT systems necessary for handling substantially higher volumes of declarations

Turning to the controversial topic of Free Ports, which the UK cannot introduce as a member of the EU, Morris said: "Ports welcome all positive interest in boosting investment opportunities...What sits behind this interest is an overdue recognition of the role ports and the maritime sector more generally can play in growing employment and prosperity in coastal communities all around the UK. These are communities who do often face challenging socio-economic conditions and in most part voted to leave the EU.

"Free Ports are a potentially transformational opportunity for locations with the right conditions and strong local support. They have proved to be successful in stimulating investment and jobs in a range of locations around the world. However, they are not a silver bullet for all locations nor the only way of boosting the UK’s main global gateways as Britain prepares for Brexit. They are one of a range of measures which would improve productivity and trade in and around the UK’s ports, adding more value to the UK and local economies.

"Free ports are one part of a broader package of reforms to development rules that the UK’s ports sector is calling for to boost investment in coastal regions. Critical to realising the benefits from this investment for the rest of the UK is improved connectivity for ports with inland economic and population centres.”

Free Ports are not just controversial within the UK, but would be contested by continental ports even if the UK leaves the EU. The Dutch, in particular, are vehemently opposed, as Free Ports in the UK would threaten the Netherlands’ status as a single logistics space.

One industry expert, Sue Terpilowski, MBE, FCILT, recently told WorldCargo News that if Free Ports are introduced, they have to bring genuine economic value to the communities where they are located and not just be tax havens, as they have proved to be in many developing countries.

Officially the EU regards Free Ports as spaces for money-laundering. From a different perspective, ruling out Free Ports is one way of protecting North Continent ports from ports in economically deprived areas elsewhere in the Bloc.

For certain, the EU will not countenance Free Ports in the UK and agree also to maintain more or less tariff-free UK access to the European market post-Brexit. Hence, raising the "spectre" of UK Free Ports in this way could be a negotiating card for Prime Minister Johnson and his team.

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