Seeing It Through: A Plan for 'Full Fat' Freeports

The Adam Smith Institute’s latest paper, written by Sam Ashworth-Hayes, argues that freeports can turbocharge growth in the UK economy if they focus on redressing the UK’s unique policy failures.

• Some academic economists are sceptical of the ability of freeports to add value to the British economy, arguing that they primarily divert (rather than create) economic activity;

• Policymakers need not risk this being the case—freeports offer an exciting opportunity to create growth by addressing inefficiencies within the British economy;

• This paper sets out four ways this can be achieved;

  • Creating a light-touch planning regime, providing fast and certain planning permission for high value economic activities;

  • Providing significant packages of local investment to alleviate concerns about crowding of public services and infrastructure, with short run disruption smoothed by offering payments linked to the port’s success;

  • Implementing a tax regime designed for growth, including full expensing for capital investment, the simplification of customs processes, and the elimination of property taxes;

  • Establishing a regulatory sandbox, allowing governments to trial regulatory changes across a sample of freeports, testing policy alternatives against one another and getting real world feedback on their performance.

• By tailoring the freeport model to address the UK’s unique policy failures, these facilities can boost growth and provide a proof-of-concept for beneficial future reforms to the wider economy.