Freeport plan raises job and tax concerns
More worries have emerged over the North East’s desire to become a ‘Freeport’, a plan which it is claimed could bring 60,000 jobs to the region.
A bid was launched on Friday, February 5, to create a ‘virtual free trade zone’ in the region, which business leaders say could add more than £3 billion to the NorthEast economy.
A Freeport is a special economic zone where businesses can operate outside of normal tax and customs rules, with the North East’s plan involving the ports of Tyne, Blyth, and Sunderland – plus Newcastle International Airport, the Nissan plant in Sunderland and the neighbouring International Advanced Manufacturing Park.
Sunderland MP Bridget Phillipson wrote last week that, while it makes “obvious sense” for local councils to try and secure Freeport status for their area, there is“very limited evidence that free ports create jobs”.
North of Tyne Mayor Jamie Driscoll has also been among the Labour voices who have doubted the Freeport model, saying last year that some“have simply displaced economic activityfrom one place to another or have been opportunities for tax avoidance” – though he has backed the North East bid.
Now Newcastle City Council leader Nick Forbes has become the latest figure to question the Government’s Freeport plans, which critics have claimed could create tax havens and simply relocate existing jobs to tax break areas rather than encouraging new investment.
The city Labour figure head said that local councils had put a lot of time into ensuring the proposed North East Freeport “most closely matches our ambitions for how people will be treated, how people will be employed, and how the economy would work”, but that he still had concerns about the impact of the potential tax breaks.
Coun Forbes told a North of Tyne Combined Authority scrutiny meeting on Tuesday that it was “not a secret that I have got some concerns about displacement activity into Freeport areas”.
He also raised fears about a potential loss of vital business rate income for cash-strapped local councils.
Coun Forbes said he was satisfied that the North East proposal would have the “least disruptive or least displacement effect on existing activity” and that, while he would not have supported the principle of a Freeport scheme if in government, “it is the show in town and we have to be pragmatic about it.”
But he added: “The one thing that I am still concerned about, frankly, is the opportunity for businesses within a Freeport area to be given tax breaks that are not available to those outside of the Freeport area.
“You can see how that would be beneficial if it was for things like the purchase of equipment or machinery to help establish a manufacturing business.
“When it is things like a waiver of National Insurance contributions for a number of years, you then have to question whether actually this is going to have the desired impact on the quality of employment practice that we all want to see .”
Areas across the UK are competing for at least 10 Freeport slots to be decided by the Government, including Tees side–where Conservative Tees Valley Mayor Ben H ouch en has been a vocal supporter of the policy.
An initiative tackling mental health and loneliness has received a funding boost.
CALM in East Durham is among those to receive financial support from believe housing’s Community Investment Programme, which has awarded £150,000 of grants in the last nine months.
They have received £17,874 for two projects to tackle mental health and loneliness issues.
Using group arts and crafts activities or yoga techniques, the initiative encourages participation and reduces isolation while providing opportunities to make new friends.
During the pandemic, activities have been delivered remotely, including yoga by video call.
Over Christmas, members created over 90 hampers for vulnerable people and key workers.