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Date TimeAugust 01, 2019
VoiceBritain could establish up to ten Singapore-style low-tax freeports in a bid to drive post-Brexit trade, a move critics said would have “money launderers and tax dodgers rubbing their hands with glee”.
Liz Truss Plan For Singapore-Style Freeports Will Create Tax Havens In Britain
Trade Secretary Liz Truss is setting up a panel to advise the government on the establishment of freeports, which could provide tax and customs benefits and cut red tape and paperwork for companies that operate within them.
Boris Johnson backed the creation of freeports during the Tory leadership campaign.
The EU warned last week that they are among emerging sectors which are vulnerable to money laundering, alongside the football industry and “golden passport” investor visas.
But Truss insisted freeports could boost trade with the United States and fast-growing Asian markets after Brexit, encourage offshored businesses to come back to Britain and create jobs.
She said: “Freedoms transformed London’s Docklands in the 1980s, and freeports will do the same for towns and cities across the UK. 
“They will onshore enterprise and manufacturing as the gateway to our future prosperity, creating thousands of jobs.
“I look forward to working with the freeports advisory panel to create the world’s most advanced Freeport model and launch the new ports as soon as possible.” 
But Labour’s Shadow Trade Secretary Barry Gardiner warned freeports could drive down workers’ rights.
He said: “This is not new investment and growth. It is a race to the bottom that will have money launderers and tax dodgers rubbing their hands with glee. 
“Freeports and free enterprise zones risk companies shutting up shop in one part of the country in order to exploit tax breaks elsewhere, and, worst of all, lower employment rights.
“The British people did not vote for this new administration and they certainly did not vote to see their jobs and livelihoods threatened in favour of gifting further tax breaks to big companies and their bosses.” 
There are already more than 80 free ports in the EU. There is also one on the Isle of Man, the British crown dependency in the Irish sea. In a report on money laundering, the European Commission last week said free ports “may pose a risk as regards counterfeiting, as they allow counterfeiters to land consignments, adapt or otherwise tamper with loads or associated paperwork, and then re-export products without customs intervention, and thus to disguise the nature and original supplier of the goods.”
They may also be misused for criminals engaging in “VAT fraud, corruption and money laundering” the infringement of intellectual property rights, the report said, while highlighting that they are lawful.
Truss’s department for international trade highlighted the free port in Miami, which sees more than 7m tons of cargo pass through every year, as an example of how they can prove a success. 
Businesses within the zone can import, warehouse and re-export products duty-free. They can also defer paying tax on their products while they are stored on site.
Chief Secretary to the Treasury Rishi Sunak said: “We are exploring freeports as an innovative way to drive growth and support thousands of high-skilled jobs across the UK.  
“We will focus on those areas that could benefit the most, as we look to boost investment and opportunity for communities across the country.”
Truss will invite ports and airports across the UK to bid to become one of the ten freeports while visiting Conservative mayor for Tees Valley Ben Houchen, who has long campaigned for a Teesside free trade zone. 
Other ports which have expressed an interest in the bidding process include the Port of Tyne, Milford Haven and London Gateway.
Labour MP Owen Smith, who supports the People’s Vote campaign for a second referendum, said: “Creating a legal on-shore tax haven is more likely to suck away jobs from businesses that pay their taxes than anything else.
“If that happens at any scale it is likely to undermine the public finances and ultimately lessen the money available to fund the police, schools and hospitals.
“Free ports do, though, offer great new opportunities to anyone who wants to avoid customs checks while they store goods. One industry could indeed boom – self-storage for art thieves.”
But the move was backed by the Centre for Policy Studies think-tank after its head of tax Tom Clougherty was appointed to the advisory panel.
“Freeports offer a proven way to boost trade, investment, and regional development,” he said.
“The government wants to capitalise on the economic opportunities presented by Brexit to reinvigorate Britain’s regions, and this is a great place to start.”Related... No-Deal Brexit Would Be 'Instantaneous Shock' To UK Economy, Bank Of England Warns Does Boris Johnson Have Any Idea What £2.1Bn Could Do For This Country? Chancellor Spends Another Billion Pounds On No-Deal Brexit Preparation

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