THE news in this week's budget that a Solent Freeport is being approved has been largely welcomed due to the hopes it could create up to 25,000 jobs in the region. But what does it actually mean?

What are freeports?

The Solent Freeport was announced by Southampton-born Chancellor Rishi Sunak, who had championed the idea.

Designed to attract major domestic and international investment, areas given freeport status are said to benefit from a wide package of tax reliefs, simplified customs procedures, streamlined planning processes to boost redevelopment and government support to promote regeneration and innovation.

Freeports are a special kind of port where normal tax and customs rules do not apply.

They are similar to free zones, or 'enterprise zones', which are designated areas subject to a broad array of special regulatory requirements, tax breaks and government support.

Who submitted the bid?

The bid was submitted by the Solent Local Enterprise Partnership (LEP) in response to the government’s plans to create at least ten freeports across the UK.

The Solent LEP believes the proposal has the potential to attract £2billion investment and create 52,000 jobs, including more than half in The Solent area, through opening the potential to bring tax reliefs, simplified customs procedures and streamlined planning processes to promote regeneration and innovation.

What area will the freeport cover?

The Solent Freeport covers an area of approximately 30 miles around Hampshire, including part of the IW.

Isle of Wight MP, Bob Seely, was one of eight MPs backing the bid in the Solent area. He said he worked with the Solent LEP to ensure the overwhelming majority of the IW has been included in the catchment area.

How will it help the Island?

Mr Seely said previously: "This bid will help to create jobs, drive investment and regenerate communities. A Solent Freeport would create new opportunities for the Island, boosting our economy at a critical time.

"A Freeport would attract jobs throughout the Island but especially in the Medina Valley area. The benefits would most certainly be felt in IW shipbuilding and in our green industry and composite sectors as well."

It is thought the area covered by the Solent Freeport could retain business rate growth to reinvest locally.

Focused on some of the Solent's most disadvantaged communities, the freeport will see high quality employment space created, with investment specifically targeted at state-of-the-art growth sectors and ground-breaking approaches to decarbonisation.

The proposal also includes plans to work with the area's universities and research assets, and establish a dedicated Solent Freeport Green Growth Institute to provide a centre of excellence in green skills and jobs.

What have people said since the announcement?

Chair of the Solent LEP, Brian Johnson said: “The Solent has a very proud maritime heritage, but we don’t live in the past. The announcement represents the start of a new era for The Solent as we begin our work with government to create jobs, drive innovation and build sustainable, long-term opportunities now and in the future.

"As the Nation's Global Gateway, the Solent Freeport will be critical to ensuring that the UK can remain competitive on an international stage in the years ahead and the LEP is committed to ensuring that our local communities — and in particular our young people — can benefit from the opportunities created."

IW MP Bob Seely said: "Delighted Rishi Sunak has confirmed the Solent Freeport. Thanks to Solent LEP for working with me to ensure this includes most of the Isle of Wight.

"The freeport will increase investment and businesses on the IW through lower taxes and cheaper customs."

Royston Smith, Conservative MP for Southampton Itchen, said it was 'game changing' for Southampton.

New Forest District Council leader Cllr Barry Rickman, a member of the Solent LEP board, said it was 'fantastic news'.

Southampton Test’s Labour MP Alan Whitehead said the news was 'potentially good news for Southampton' as long as it benefits the people and not just big businesses.

Steve Szalay, operations director at Southampton Airport, said: "We welcome the Chancellor’s announcement. The economic recovery of our region is vital for job sustainability and creation.

"We have been working closely with the Solent LEP on their bid as the airport is a vital component to the Freeport. We are optimistic about the pivotal role we can play in repositioning and rebuilding the region, that is why we are calling on our councillors to approve the runway extension to ensure we are able to continue to connect the central south, nationally and internationally.”

Concerns from the IW Green Party

The IW Green Party said the announcement had "thrown up a number of questions regarding the potential consequences of this decision".

They said: "There is a distinct lack of clarity, apart from references to ‘tax reliefs’ and ‘streamlined planning processes’ – so could there be a social and environmental impact to becoming a Freeport?

"Conservatives have heralded freeports as an opportunity to turbocharge the economy post Brexit. They have also falsely claimed that the EU is the only place where freeports don’t exist. In fact, there are around 80 such free zones within the EU. However, a 2018 European Parliament report concluded that they encourage corruption, tax evasion and criminal activity and so are likely to become much more regulated."

Julia Laursen, who will be standing for the Green Party in the council elections, has experience of the Freeport in Hamburg, Germany.

She said: “On the one hand it is a system which can benefit importers and increase trade opportunities, but it will increase shipping levels at a time of climate crisis. There are many unanswered questions – where will the borders be? Where will the customs barriers, high security fences and storage facilities be built? We are not being given the full picture of the impact this could have for the Isle of Wight and I would be interested to know what vision our MP has, when in Europe these freeports have created environmental damage, encouraged corruption and criminal activity. That is not a vision that many Islanders share.”

Who is against it?

Opponents of the freeport idea include the campaign group Fair Tax Mark, which says the idea is likely to exacerbate tax avoidance and evasion, “encourage a global race to the bottom on corporation tax” and give an unfair advantage to some businesses.