The U.K.’s chancellor of the exchequer, Rachel Reeves, will approve five new freeports across the U.K. in her budget on October 30, embracing a Conservative Party-era policy as she seeks to promote investment while keeping spending on new programs in check.
Reeves will also announce a new investment zone in the East Midlands, designed to attract private money to the region’s high-tech green industry, the government announced on October 25. Trade into freeports are usually exempt from taxes, in an attempt to bolster local economies. Reeves is expected to announce the locations of the ports as part of her first budget on October 30.
While Freeports disappeared in Britain almost a decade ago, they were revived by consecutive Conservative Party administrations in the aftermath of the U.K.’s exit from the European Union. The new Labour government said they would change the model by aligning the programs with its yet-to-be-announced industrial strategy, and by increasing oversight and scrutiny from local councils and mayors.
“I have always said I will look at whatever will deliver for working people, with no ideological lens,” prime minister Keir Starmer said during a visit to Samoa for a summit of Commonwealth leaders. “Yes, freeports were a scheme we inherited, but when combined with Labour’s laser focus on growth generated from the ground up, we will maximize their potential.”
The announcement allows Reeves to point to efforts to grow local economies in Britain, without putting any public money toward such pledges. She also plans to allow importers of critical minerals access to U.K. Export Finance, a state body that usually helps British exporters and their buyers with financing and insurance, which also doesn’t require her to allocate additional spending.
Deputy Prime Minister Angela Rayner, who also serves as housing secretary and oversees local government policy, reached agreement with the Treasury on spending for her department two days past the allotted deadline after protesting against cuts to her budget, Bloomberg reported.
To allow herself more room to borrow money to invest in major infrastructure projects, Reeves confirmed this week that she will change the fiscal rules underpinning the U.K.’s spending plans, a move that could allow Britain to borrow as much as £70 billion ($91 billion) more over the next five years.
