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Ports and the future of trade

By David Leighton  

This article was produced in association with Associated British Ports

As an island nation, Britain’s historical trading success was built on the strength of our maritime industries. Our ports remain the key link connecting UK businesses to global markets, handling some 95% of the nation’s trade in goods.

Every year ABP’s network of 21 ports around Britain handles £150 billion of trade, contributing £7.5 billion to the economy and supporting 119,000 jobs. Our ports include the Port of Southampton, the UK’s number one export port, exporting goods worth £40 billion. Some £36 billion of those exports are destined for countries outside the EU. The port is the UK’s number one automotive port and last year handled around 820,000 vehicles on behalf of leading manufacturers such as Jaguar Land Rover, Bentley, Honda and BMW Mini, as well as facilitating the import of components to support automotive production. The Port of Southampton supports 23,200 jobs in automotive manufacturing across the country, including 11,700 in the West Midlands alone.

Our four ports on the Humber, including the UK’s largest port at Immingham, serve a wide range of sectors, ranging from refining to pharmaceuticals to food and beverages. The £75 billion of trade handled by our Humber ports is more than the Mersey, Tyne and Tees combined, making the Humber the Northern Powerhouse’s premier gateway to trade. Together with other ports on the east coast, the Humber also provides one solution for businesses wishing to reduce their exposure to the risk of potential disruption at Dover when the UK leaves the European Union. That’s why ABP is investing £50 million in new equipment and facilities, more than doubling our container handling capacity in Immingham and Hull. The Humber also offers many the opportunity to import and export using ports closer to their locations, saving carbon by reducing lorry miles on UK roads and avoiding congestion in the south east.

Recognising the key role that ports have in supporting businesses and manufacturers across the UK, it is clear that making sure ports can develop and grow, and prioritising investment in road and rail links to ports are an important part of achieving the Government’s desire to boost exports. The current appraisal methodology used by Government to determine public investment in infrastructure does not adequately capture this policy objective or the vital economic contribution of trade and exports. Fortunately, this is a problem which can be easily remedied.

The potential of our ports to boost manufacturing is not limited to facilitating trade flows however; ports themselves can become the manufacturing centres of the future. A number of ports offer large areas of development land adjacent to deep water. Examples include the Humber International Enterprise Park, one of the largest development sites in the UK, and Port Talbot. These are ideal locations for the efficient import of raw materials or components and export of finished products. ABP’s joint £310 million investment with Siemens in an offshore wind manufacturing facility at Green Port Hull underlines these benefits, but using sites close to deep water can offer significant advantages for any type of manufacturing. That’s why ports offer a major opportunity to attract investment in new manufacturing. And the creation of a Free Ports policy can make a vital contribution to realising that potential.

Free Ports (or Free Trade Zones) are designated areas where goods can be imported, products manufactured and re-exported without incurring domestic customs duties or taxes. Consequently,  a Free Ports policy can super-charge ports’ and the UK’s ability to attract global investment in new manufacturing, especially when combined with other existing incentive regimes to create ‘Super Enterprise Zones’. It is estimated that a Free Ports policy in the UK has the potential to create up to 86,000 new jobs. The importance of realising this opportunity is reinforced by the fact that many ports are located in parts of the country with severe socio-economic challenges; 17 of the UK’s 30 largest ports are currently in the bottom quartile of local authorities when ranked by the Office of National Statistics’ Index of Multiple Deprivation.

Boosting trade and increasing exports is key to the UK’s future prosperity. Achieving that ambition depends on backing the nation’s ports.

With the support of Associated British Ports, Prospect will be hosting a panel at the 2018 Conservative party conference. Speakers will include: Suella Braverman MP, Parliamentary Under Secretary of State for DExEU; John Howell MP, Trade Envoy to Nigeria; David Leighton, Group Head of Corporate Affairs, Associated British Ports; Alan Winters, Director, UK Trade Observatory

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