‘Light touch’ planning could turbo-charge Freeport

A liberalised planning regime could turbo-charge the economic benefits of the new Liverpool city region Freeport, a new report claims. Tony McDonough reports

Port of Liverpool
LCR Freeport will cover multiple sites including the Port of Liverpool


Liberalised planning regulations could accelerate investment and development at the new Liverpool City Region Freeport (LCR Freeport). 

A new report from economic think tank, the Adam Smith Institute says, if done right, Freeports can address some of the weaknesses in the UK economy. In particular, the constraints caused by the planning system.

Shortly to go live with £25m from the Government, LCR Freeport is one of eight new English Freeport zones set up by previous Chancellor Rishi Sunak. Freeports are designated zones where many normal tax and customs rules do not apply.

LCR Freeport will operate across multiple locations. Its primary customs sites are the Port of Liverpool in Seaforth and at Liverpool John Lennon Airport. It stretches to Port Salford at the other end of the Manchester ship canal.

There will also be three tax and customs sites – Wirral Waters, the £100m Parkside scheme in St Helens and the 3MG multi-modal terminal at Widnes. It will also encompass other industrial and logistics sites.

LBN understands the first Freeport site is likely to be at Liverpool Airport. And, speaking earlier this year, LCR Freeport director John Lucy said investors across the world are already showing ‘phenomenal interest’. He will lead a trade mission to the US later this year along with cluster organisation Mersey Maritime.

At a Freeport, imports can enter with simplified customs documentation and without paying tariffs. There is also tax relief on purchase of land and buildings for qualifying commercial activity.

In order to accelerate growth at Freeport’s the Government says they will offer a “supportive planning environment” through an extension of permitted development rights and incentivising use of local development orders.

In his mini Budget last Friday, new Chancellor Kwasi Kwarteng unveiled a plan to create 38 new Investment Zones across the UK. These locations would include Liverpool city region and Cheshire. 

Similar to Freeports, the new zones will also offer a number of tax incentives to investors. And they will offer “accelerated development”. There will be designated development sites to both release more land for housing and commercial development. 

The need for planning applications will be minimised and where planning applications remain necessary, they will be “radically streamlined”. 

It is estimated that, in the first 10 years, of the LCR Freeport at least 10,600 high value jobs will be created. It will also offer huge opportunities for local businesses across Liverpool city region and add £1.3bn annually to GVA (a key measure of economic output).


MEA Park
A new logistics park at Wirral Waters will also be part of the Freeport


Written by economist Sam Ashworth-Hayes, the Adam Smith Institute report claims the relaxation of tax and customs rules may not offer as much of a boost as is hoped.

He writes: “The problem for Truss’s new freeport policy is that the UK is already a relatively low-tariff economy. And the general direction of Government policy is aimed squarely at making it lower still.

“Freeports benefit the economy by punching a hole in the tariff regime to let business flow unburdened… these things mean that the pure benefits in customs terms to locating businesses in new UK freeports are likely to be slim.”

However, Mr Ashworth-Hayes is more upbeat about the possible impact of a relaxed planning regime. He explains: “Planning rules present a major barrier to growth and investment in Britain, both by directly blocking high value uses of land and discouraging investment through the uncertainty they inject into firms’ decision-making processes.

“Freeports offer an opportunity to circumvent these blocks to growth by taking local authority planning processes out of the picture.

“Freeports offer a chance to punch through the red tape throttling UK growth. The successes achieved by earlier freeport schemes were attributable in large part to new developments, which are capable of driving virtuous cycles of growth in local areas.

“The location of businesses attracts demand for housing and services, which in turn create further incentives to make use of the area.”

Click here to read the full Adam Smith Institute report

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