Thames Freeport - Britain's Trading Future

G R A N T T H O R N T O N U K L L P [ 54 ] Services Advisory Director at Grant Thornton, provides insights around these areas and how the stakeholders can come together to resolve them as an important stage of the programme is entered. Area 1 — Planning Government aims to achieve a position where freeports have a streamlined, flexible set of planning procedures. Careful consideration is required to understand how mechanisms such as local development orders and the use of permitted development rights, can be enabled to relax planning controls sensibly and encourage development at freeports while balancing other concerns such as the environmental impact. A key element of a successful freeports policy will be the role of the National Infrastructure Strategy to enable a connected approach to align the freeports strategy to investments in key infrastructure and logistics. If performed correctly, this will see the establishment of industrial clusters as part of a move to a clean energy generation strategy, which is a key component of the Thames vision. It will be fundamental to winning the hearts and minds of all stakeholders involved to present a full and holistic picture of what is trying to be achieved. Stakeholder management will be critical to navigate the planning process and reach a point where the Thames Freeport can unlock and secure the £1 billion of investment identified for the new port infrastructure. Area 2 — Decarbonisation The freeports offer huge opportunities for decarbonisation. For Thames, it is important that these benefits are fully explored, and that freeports policy and positioning is aligned, ideally through the National Infrastructure Strategy to achieve net zero aspirations. Collaborative working alongside the Port of London Authority brings the opportunity to deliver an ambitious 2040 net zero target — the Thames Freeport will link sites along the estuary by river into the heart of the largest market in Europe via operational wharves. This will reshape urban logistics and reduce pollution. Through innovative structuring alongside customs and tax rules, this could have major implications for the delivery of cheaper renewable energy projects, particularly if coupled with strong supporting infrastructure. This will engender capital investment, skills development and regulatory flexibility, thus promoting investments in high growth clean energy generation areas, such as the hydrogen economy. This will provide strong encouragement to private sector investment in the knowledge that the UK Government is committed to pushing forward on the net zero agenda. This is central to the strategy supported by the four major private sector organisations at the centre of the Thames vision — DP World, Forth Ports, Port of London Authority and Ford Dagenham. It is important that the branding of the strategy responds to the change that is coming and the changing face of these long-standing partners in this area. Area 3 — Tax A key component of any freeport is an attractive set of effective tax and customs rules. The ultimate objective is to secure streamlined customs procedures underpinned by certain tax incentives. The primary incentives include the proposed suspension of duties: no tariffs, import VAT or excise would be payable on imported goods into a freeport from overseas until they leave the freeport and enter the UK’s domestic market. The Government is looking at, amongst other policies, the impact of tax incentives from Enterprise Zones and assessing whether something similar could be implemented in respect of freeports. Karen Robb, Tax Partner at Grant Thornton, commented: “In the specific Freeport tax sites there will be beneficial VAT and Customs rules, including being tariff free. The overall message on tax is that some very attractive incentives are being introduced which should lead to tax cash flow savings in a number of areas including business rates exemptions, accelerated reliefs against corporation tax for capital expenditure, up-front stamp duty land tax savings on site acquisitions and employment cost savings through NIC exemptions for locally employed individuals. However as with all tax incentives, tax avoidance is a concern of Government which has led to a degree of complexity in the tax law introducing these reliefs and detailed plans will need to be scrutinised with care to ensure that the conditions for the incentives are met.” Area 4 — Security For many, the potential link between freeports and money laundering, tax evasion and trafficking remains a major concern. At this stage the Government is seeking views to inform its response to this challenge. It is important that this aspect of the policy is agreed before pushing ahead. What is clear, though, is that this is an opportunity for the UK to set itself apart as a world leader in secure, intelligent borders. This border strategy should also help to develop the current concept of borders beyond the purely physical realm towards a ‘system of systems’ that recognises digital and physical interdependencies at the border. Freeports present the perfect model by which this concept can be delivered, but there are many challenges when it comes to data sharing. Cyber resilience will be key to this, but the Thames Freeport can work closely with Government in developing a strategy that: • Ensures the business strategy addresses the challenges of cyber resilience and puts cyber risk at the centre of its risk management processes • Identifies the impact that a cyber attack might have on critical assets, understands how that might happen and has processes in place to counteract and mitigate the impact