Community leaders worried over local benefits of Freeport East project
- Credit: Sarah Lucy Brown
Questions have been raised over how much Suffolk businesses stand to benefit from the Freeport East project, which it is said will create 13,500 jobs and secure £330million investment.
Backing has been given for the final business case for the project - which will centre on Felixstowe, and Harwich ports and the Gateway 14 business park at Stowmarket - and this will be submitted in the next fortnight and a new company to manage the enterprise will be formed.
Suffolk County Council’s cabinet gave its unanimous support to the business case on Tuesday.
It agreed a company should be formed to oversee the scheme made up of members of the current supervisory board.
Cited benefits of the freeport include reduced VAT, lower stamp duty on new buildings within the site, lower rates of National Insurance contributions for employers within the tax zones (but employees will still have to pay the same) and five years of rate relief.
Richard Smith, Conservative cabinet member for economic development, said it would be “on the world’s major trade routes and will be a strategic hub linking UK businesses to suppliers and customers across the globe".
But opposition Green, Liberal Democrat and Independent group leader Andrew Stringer questioned the benefits to local firms.
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He cited a small family-run company near the Gateway 14 site which will not be allowed to relocate into the new business park because the drive is to attract foreign firms rather than relocate existing Suffolk businesses.
He said: “In order to compete with the new businesses coming into the freeport, my constituent’s business is now at a distinct disadvantage because his business won’t be able to qualify for lower or zero VAT, lower National Insurance, no business rates for five years.
“Yet he will be excluded from the freeport by his geography. But even worse his business rate payments will go into funding the freeport.”
Mr Stringer said it was “was sold as a chance for local sustainable growth, but instead settles for taxes on local business to fund onshore tax havens”.
Other questions raised included whether A14 upgrades will be included if the freeport generates more vehicle movements and how planned hydrogen production from Sizewell B will be transported to Essex.
Mr Smith said: “One of the core aims of the freeport is to establish them as national hubs for global trade and investment, so the benefits of freeports will be available to both home and foreign investors.”
If the business case is approved, £25m seed-funding will be released - Felixstowe will get £12m, Gateway 14 £6m and Harwich £7m.