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Why Free Trade Zones may not be the magical solution to Brexit’s economic woes

brexit, eu, european

Immingham, Lincolnshire is a relatively unknown town with a grand population of 9,641.

The small town features very average architecture and a rather unremarkable shoreline. By the sounds of it, Immingham is an unmemorable town with every reason to be ignored by the rest of the British population. So why – of all places – is it an integral part of Boris Johnsons’ post Brexit strategy? Well, Immingham is home to the largest port in the United Kingdom; Port of Immingham.

brexit, eu, united kingdom

The Port of Immingham has become a subject of Johnson’s grand master plan to maintain the integrity of the United Kingdom’s economy and prevent it from crashing, after D-Day (31st January). The Port is part of a wider plan to create ‘Free Trade Zones’ in the UK; such zones are geographical locations that are not subject to normal United Kingdom trade rules. Effectively, this means that, for the purposes of manufacturing, storing or re-exporting goods, businesses in these FTZs can trade without incurring certain taxes.

The main advantage of having free trade zones is that doing business within the United Kingdom’s vicinity may become cheaper, thus attracting businesses. Free Trade Zones – depending on their format – can offer tax exemptions, less regulatory red tape and certain incentives for businesses that operate within one. The hope is that the UK can still remain a hub for prospering business despite Brexit’s economic uncertainty.

Whilst these Free Trade Zones are relatively unknown, the saying ‘there’s nothing new under the sun’ holds true in this circumstance. The existence of Free Trade Zones-esqe projects in the UK goes as far back as the 16th Century. More recently, famed Prime Minister Margaret Thatcher utilised a version of them – Urban Enterprise Zones (UEZs) – in the 1980s. Whilst Free Trade Zones are generally seen in areas with ports, urban enterprise zones are attractive for similar reasons to FTZs. Both UEZs and FTZs offer tax concessions, infrastructure incentives and reduced regulations to attract business to certain areas. Despite the large success of converting the London Docklands from a derelict area to the commercial hub we know today, national successes of the programme were limited. Urban Enterprise Zones cost The Thatcher Government just under £300 million for a mere net creation of 13,000 jobs from the 2,800 enterprises established in UEZs. Clearly a poor cost-benefit ratio. The Thatcher Government eventually scrapped the program in favour of urban development corporations to incentivise urban renewal. Bringing this back to present day, if it didn’t work then, why will it work today?


Johnson’s FTZs may be equally disastrous, it is hard to tell at the moment, given that we have no definitive policy details. Even so, we must be sceptical of any project that claims it will be a ‘big solution’ to any problem, as history proves results can disappoint. Given the economic outlook of Britain post-Brexit, FTZ’s may be part of a legitimate solution to mitigate the predicted instability of Great Britain’s exit from the EU – but let’s stay sceptical.


  • Free Trade: The idea that companies and individuals can trade goods internationally with no restrictions
  • Tax concessions: Discounts on the amounts of tax owed to the Government
  • Urban Enterprise Zones: Special areas within urban regions that have special incentives to draw businesses there
  • Urban Development Corporations: Organisations created by the government to develop specified areas

By Tanyaradzwa Kasinganeti

  3. Urban and Regional Planning (2002) Routledge – Peter Hall and Mark Tewdwr-Jones

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