Could Mayor’s Free Port offset the effects of Brexit in Tees Valley?

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In a letter from Mayor Ben Houchen to Philip Hammond, Chancellor of the Exchequer, this week Tees Valley Combined Authority (TVCA) launched its campaign to establish a Free Port in Teesside. The Mayor’s correspondence was supported by regional, national and international firms such as Hitachi Rail, Liberty Steel and Quorn Foods, who already have a base in Teesside.

Mayor Houchen has put forward a bold argument for Tees Port to become a test case for the establishment of Free Ports following Brexit. TVCA has realigned its focus onto the region’s reputation as an industrial powerhouse at the same time as highlighting existing core processing and manufacturing skills for which the region is already renowned. The port is a catalyst for development for businesses already on the river, and the combination of a river location with huge capacity, a port with the capacity to develop out and a gateway to 4,500 acres of brownfield industrial land will prove an attractive offering.

Since his election in May 2017, Mayor Houchen has outlined several bold initiatives to boost Teesside’s status nationally. In October, he launched the South Tees Development Corporation, responsible for fully developing a 25-year regeneration plan with the potential for 20,000 jobs and an additional £1bn annual income. This is the single biggest development corporation outside of London.

But this new “Free Port for Tees Port” vision is ultimately about trade policy and to progress devolved ambitions for the region, TVCA must make HM Government listen. One of the challenges the Mayor will face is marrying the cross-party support of a handful of MPs with the divergence of policy and politics across departments such as International Trade, DBEIS, MHCLG and HM Treasury, all of which have a stake in this policy area.

Local government support will also be crucial. Mayor Houchen is considered in some circles as the lone wolf of Teesside. TVCA is a Conservative-led authority consisting of five local councils, four of which are Labour-controlled, with Redcar & Cleveland  in No Overall Control.

Houchen has already had some collaborative success working with other local government leaders. The Mayor swiftly employed his Combined Authority borrowing powers to secure £7.5m in investments for the Tees Advanced Manufacturing Park. TVCA’s £7.5m investment will be used to remediate the land and infrastructure works to prepare the ground for high-quality commercial accommodation, a development co-funded by Middlesbrough Borough Council of which £12.5m has been committed on their part.

By putting free port status on the agenda, Teesside Valley must develop and rationalise its investment policies. The business case will need to satisfy investors and promote sound economic growth opportunities for new businesses. Teesside is set to lose £25m per year in structural and investment funds on exiting the EU. Mayor Houchen will not want a free port to become a financial burden on local and central government. Nor will he want to fall behind in the race to bring inward investment to his combined authority over those City Region Deals, Powerhouse and Engines of the UK all vying for new deals.

To be truly representative, TVCA should be mindful of creating a port which is geared towards international activity. The Mayor must work hard to bring investment to his region, but he must also make those investments work to the benefit of the wider community. Cross-party political support in Westminster from Middlesbrough South, East Cleveland and Redcar MPs and MHCLG’s Rishi Sunak will not be enough to secure the future of Free Port status for Tees Valley.

Again, looking inwardly, development for increasing cargo freight at Durham Airport faced strong opposition in 2017 and the associated housing development on the same site was only approved by the casting vote of the Planning Committee Chairman after a 4-4 split of councillors.

The Mayor’s economic growth narrative must make good on his promise to buy back Durham Tees Valley Airport. For that, he must add an Act of Parliament to his mayoral to do list. In the wake of this week’s announcement, the campaigning bodies are already calling for the Airport bid not be overshadowed by a new focus on the Port. Could the airport be the alternative duty-free port the Mayor is looking for? Balancing the breadth of feeling in the local community, the authorities’ plan for economic growth and the interests of British and international enterprise will be the source of much conflict for the directly elected Mayor at a time when industry is looking for greater opportunity in a post-Brexit United Kingdom.

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