Freeports will fail to boost the UK economy, the Treasury watchdog says, in a damning verdict on Rishi Sunak’s flagship policy.
Eight English ports are being granted controversial tax breaks – to “generate trade and jobs”, the chancellor has claimed – at a cost of £200m, in what was been hailed as a benefit from Brexit.
But the Office for Budget Responsibility (OBR) has dismissed the claim in its assessment of the budget and spending review, in an embarrassment to ministers.
“We have assumed that the main effect of the freeports will be to alter the location rather than the volume of economic activity,” its report says.
“So the costs have been estimated on the basis of activity being displaced from elsewhere.”
The verdict adds to criticism that the freeports open the door to corruption, the reason why the the EU is cracking down on the policy.
Freeports allow goods be imported temporarily without tariffs, excise duties and other taxes being paid – before those goods are shipped on again.
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