The owners of Bristol Port donated £25,000 to Boris Johnson’s leadership campaign only six weeks before he backed a tax-cutting incentive that could massively boost the port’s profits.
Mr Johnson on Friday endorsed a report calling for Singapore-style tax-free trade zones at ports across the country, with Bristol mentioned as one of those that could benefit should a post-Brexit pilot scheme prove successful.
The ex-mayor of London said he was “firing the starting gun on free ports for Britain”.
The concept would be easier to deliver once outside of Brussels customs union rules that demand European Union members apply the same import tariffs.
The creation of so-called “free ports” would allow the city’s port to operate outside of the UK’s customs regime, meaning taxes on imports would not apply, allowing port chiefs to save vast amounts in taxes, given the majority of trade into the ports comes from goods arriving into the city.
Free ports can also offer other tax breaks, including waiving business rates and giving companies in the free zones five to 10 years holidays from paying national insurance contributions for employees.
In the report highlighted by the Tory leadership frontrunner, it claimed there could be at least six free ports established across the UK after Brexit, including in Bristol.
(Image: Ian Forsyth/Getty Images)
It said “an aeronautics cluster at Bristol port, exploiting existing linkages across the Midlands” could be set-up, along with similar facilities in the Tees Valley, Liverpool, Hull, Grimsby and Belfast, in a bid to make Britain an attractive trade proposition after leaving the European Union.
The feasibility report – commissioned by Ben Houchen, Conservative mayor of Teesside – said free ports across the country could create 70,500 extra jobs and provide a £4.2bn contribution to GDP after 25 years.
The endorsement of the idea, which is popular among free-market Tories, comes only six weeks after Mr Johnson’s campaign to be prime minister received a £25,000 donation from the Bristol Port Company.
The former foreign secretary accepted the five-figure payment from First Corporate Shipping, which trades as the Bristol Port Company, on 22 May, according to BuzzFeed News .
Mr Johnson’s team denies any wrong doing.
A spokesman said: “The donation was transparently declared – there was nothing untoward.”
First Corporate Shipping also donated £25,000 to Jeremy Hunt’s leadership campaign.
The former health secretary has opened the door to looking at expanding the role of free trade zones in Britain but has been less effusive than his rival.
(Image: Neil Edbrooke)
One of Mr Hunt’s key allies, Dr Liam Fox, Trade Secretary and MP for North Somerset, is known to privately be supportive of free ports. He is also a close friend of senior figures at Bristol Port, parts of which are in his constituency.
The Bristol Port Company was formed in 1991 when businessmen Terence Mordaunt and David Ord bought the Port of Bristol from Bristol City Council.
It has talked regularly about the opportunities it sees with Brexit, especially with the chance to trade more with America.
Bristol Port’s trade is 66 per cent non-EU and is mainly an importing facility. The port does not handle food for human consumption or deal with roll-off, roll-on traffic like Dover.
It employs 550 people directly, there are nearly 9,000 people working at the site and nearly 20,000 jobs across the UK depend on the port.
A spokesman for the port said in January that the company did not see leaving the EU as a “threat”.
(Image: Leon Neal/Getty Images)
“We expect activity levels to increase in the years ahead – whatever the final Brexit outcome. Bristol Port sees Brexit as an opportunity not a threat,” said the company spokesman.
“The one thing that Brexit cannot change is our geography and we strongly believe our west coast gateway will enable us to thrive and flourish in the post-Brexit trading climate.
Mr Johnson, who is currently on a tour around the UK meeting Tory members in tandem with his rival Jeremy Hunt, has confirmed he will look to give the green light to free port pilot projects after October 31 to determine whether they are worth pursuing. Teesside is currently in pole position to be offered the pilot.
Endorsing the proposals, Mr Johnson said: “I welcome this well-written report”. He added: “Taking advantage of the opportunities afforded by leaving the EU on 31 October to introduce free ports is an excellent way to boost businesses and trade.”
A government led by Mr Johnson would “consider specific candidate sites,” his campaign team said.
The Bristol Port Company has been approached for comment.