Post-Brexit ‘free ports’ will let companies and super-rich avoid tax, Labour warns

Ministers say scheme will create business hubs and turbocharge economy

A chain of 10 freeports planned by the government will be used by the super-rich to hoard assets and avoid taxes, Labour has warned.

Launching a consultation on the initiative, the Treasury said that the new free trade zones would create thousands of jobs and “turbocharge” growth.

But shadow chancellor John McDonnell said the plan revived “failed” efforts by Margaret Thatcher in the 1980s to allow companies to bypass regulation and minimise taxes.

Following the 10-week consultation, sea ports and airports will be able to bid for freeport status, with successful applicants named around the end of the year and opening for business in 2021.

Goods brought into a freeport do not attract tariffs until they enter the domestic market and no duty is payable if they are re-exported. Raw materials processed in the zone attract duties only on the end product, and businesses also benefit from simplified customs procedures.

The government is also considering tax incentives to encourage investment in freeport areas.

Ministers said the initiative – first floated by Boris Johnson during last year’s Conservative leadership campaign – would increase opportunities for trade around the world following Brexit. They pledged that standards on security, safety, workers’ rights and the environment would not be compromised.

Treasury chief secretary Rishi Sunak said: “Freeports will unleash the potential in our proud historic ports, boosting and regenerating communities across the UK as we level up.

“They will attract new businesses, spreading jobs, investment and opportunity to towns and cities up and down the country.”

But Mr McDonnell said: “This is the revival of a failed Thatcherite plan from the 1980s, designed to cut away at regulation and our tax base.

“There is very little solid evidence that so-called freeports create jobs or boost economic growth, showing this up as another ideological move from a far-right government.

“This plan only represents a ‘levelling-up’ for the super-rich, who will use free ports to hoard assets and avoid taxes while the rest of us feel the effects of under-funded public services.”