Chancellor Rachel Reeves is expected to forgo announcing any new freeports in the upcoming Budget despite a Downing Street press release on Friday that hinted at the unveiling of five additional sites.
Ms Reeves will instead confirm funding for the “next steps” for five of the existing freeport locations, giving them official clearance to establish customs facilities within their designated zones.
In a move seen as an endorsement of the previous government’s strategy, the chancellor is also set to green-light an “investment zone” in the East Midlands – a proposal originally tabled by the Conservatives.
According to government insiders, the confusion stemmed from a “total cock-up with the comms,” as officials apparently muddled the freeport sites themselves with the customs zones contained within them.
Seven of the UK’s twelve freeports already operate with multiple customs zones, which offer tax advantages, such as paying tariffs only on finished goods and receiving breaks for new hires.
Under Labour’s plan, a further five sites are expected to be granted customs status, though the absence of “new” freeports has left industry figures frustrated. The Financial Times, which broke the story, reported that Downing Street’s premature announcement blindsided port executives and local mayors, who received no prior warning about the supposed “new” freeports.
Downing Street declined to comment on the debacle, while a Treasury spokesperson insisted that the government remains “committed to ensuring the custom benefits remain on offer”.
The Conservatives were quick to seize on the apparent disarray, with a party spokesman branding the Labour government’s handling a “humiliating U-turn” and warning that such mixed messages risk damaging business confidence in the UK.
“Ahead of the first Labour Budget in 15 years, the Prime Minister has today confirmed that the Chancellor will announce a new investment zone in the East Midlands and five new freeports as part of the government’s package of measures to fix the foundations and rebuild the country,” Number 10 had stated just a day earlier.
On a visit to Samoa, Prime Minister Sir Keir Starmer was questioned about the matter and asked whether the decision to persist with freeports reflected an admission that the Conservative model had succeeded.
He responded: “Freeports were introduced by the last government. We looked at them and saw that they were working well; I think they can work even better. So rather than stand them down, we’re going to go with it, but we’re going to make some improvements to ensure they’re even more effective.”