Call made for free trade zone in northern England

The next UK government should create a free trade zone across the north of England which could generate £12billion a year as part of a drive to give the region a new global outlook, a major think tank has said.

Tuesday, 6th June 2017, 11:22 am
Updated Tuesday, 6th June 2017, 11:28 am
Newcastle Airport

Policy North, the independent, cross-party think tank based in Newcastle, is launching its new Global North strategy to create a trading vision for the north of England that will ‘realise Brexit’s true potential’.

Writing for The Telegraph, Policy North president David Harrison, a senior business figure with more than 40 years of experience, says that a free trade zone across the north could play a long-term role in boosting economic activity near key port and airport facilities.

Free trade zones, or free ports, are areas within a country’s territorial border but are considered to be outside the customs border. That means businesses can import, process and export goods within the free port without incurring customs tariffs.

Initial research for Policy North shows that a free trade zone in the north of England, covering nine major northern freight ports, could create 612,000 jobs, if they match the success of existing free trade zones across the world.

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The average gross value added of each northern employee is £20,000, meaning the economic impact on the North could be £12billion annually.

He said: “It would enable cargo to be reconfigured or processed and then shipped outside of the UK or alternatively brought into the UK for customs clearance at a later stage, once processing has been completed without the need for UK customs clearance.”

Harrison also warns of the ‘catastrophic’ damage the Scottish National Party’s plans to halve Air Passenger Duty (APD) will have on airports in the north of England, particularly Newcastle, which is just 98 miles from Edinburgh.

He said: “When travelling as a group of four, the savings on APD could equate to anywhere between £13-£26 up to £94-£194 per passenger travelling (depending on final destination) and in some instances even more. Those hard-earned international routes that took decades to attract as we rebuilt industry throughout the North East would be threatened.”

He added: The risk to the north is that more companies will decide to invest in Scotland instead of the north because of their cheaper air travel and greater international connectivity. This is not a trivial matter and resolving it therefore sits as one of Global North’s key connectivity objectives.”

Harrison identifies the unique strengths of the north where globally relevant innovation and economic strengths lie, including cloud and computing capability; extreme environment technology; agri-tech; gaming; and advanced manufacturing.

He said that the strategic vision for the north by consecutive governments has, to date, been about closer collaboration between northern towns and cities:

“In contrast with the Northern Powerhouse project, we call on the next government to adopt a new strategy designed to take advantage of the global opportunities for businesses in the north,” he said.