Low-tax freeport on the edge of Yorkshire 'may allow employers to avoid national insurance contributions'

Treasury Minister Rishi Sunak
Treasury Minister Rishi Sunak
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The creation of freeports may lead to exemptions from employers' national insurance contributions, an MP has said, raising questions over the potential impact on the state pension fund.

Speaking in the Commons, Labour MP Melanie Onn asked about the impact the creation of freeports, which are areas inside the UK geographically but legally outside of the UK customs territory, may have on state pension funds if they provide exemptions from employers' national insurance contributions.

Once the UK leaves the EU, seaports and airports across the UK will be invited to bid to become one of up to 10 freeports, with the aspiration of increasing trade with new markets across the world.

Read more: Low-tax 'free port' plans on the edge of Yorkshire move closer as Liz Truss promises scheme will create thousands of jobs

Read more: Yorkshire logisitcs boss says Government's freeport plan 'unlikely to mitigate against Brexit'

Chief Secretary to the Treasury Rishi Sunak, who is Tory MP for Richmond in North Yorkshire, said: "We are developing an ambitious and attractive UK freeport offer to create hubs that will attract inward investment, create jobs and boost trade.

"Typically, freeports only offer customs benefits, but we are looking to go further than that to ensure that these turbocharged areas can drive growth for their communities."

Ms Onn said Ben Houchen of the Government's freeports advisory panel has said he would like to see reduced corporation tax and exemption from employers' national insurance contributions.

The MP for Great Grimsby asked whether the potential impact of this on state pensions has been considered.

Ms Onn said: "The Conservative mayor for Tees Valley and member of the Government's very carefully selected freeports advisory group says that he hopes to see reduced corporation tax and exemption from employers' national insurance contributions.

"Have you made an assessment of the impact of these Tory proposals to the Exchequer and state pension fund?"

Mr Sunak paid tribute to Mr Houchen's commitment to freeports, and called on Ms Onn to support the idea.

He said: "I pay tribute to the Conservative mayor Ben Houchen in Teesside for championing his community.

"He has been advocating a freeport because he believes such a phenomenon will create jobs in his area, drive inward investment and boost trade.

"I would hope that the honourable member opposite would welcome this for her community in Grimsby, where the seafood industry, ABP, the port employer, has loudly called for such a freeport status for her area, and I hope that when the opportunity comes, she will support her community in applying for one."