The chancellor will not unveil new freeports in the Budget on Wednesday, despite a government announcement on Friday saying she would do so.
In the whirlwind of pre-Budget briefings, it appears Downing Street has gone too far, promising that the new tax cut sites would boost growth and jobs.
Instead of announcing five new freeports as has been widely reported, the Chancellor will confirm the next stage of funding for some existing freeport sites.
There was “a mistake in communications”, a government official confirmed to the BBC on Sunday.
The error is due to confusion between the freeport sites themselves and the multiple customs zones they contain.
The chancellor, Rachel Reeves, would confirm five new customs zones within existing freeports, the official said, not new freeports.
Freeports are areas near shipping ports or airports where imported goods are exempt from customs duties. Businesses in these areas also pay lower national insurance for new employees and lower property taxes.
They are designed to stimulate economic activity such as trade, investment and job creation.
Reeves will still reveal his plans to create a separate investment zone in the East Midlands, which was also announced on Friday.
The Financial Times, which was first to report the error, said Friday's announcement, made while the Prime Minister was at the Commonwealth Heads of Government Summit in Samoa, had caused “bewilderment” among companies and officials involved in free ports, because they had not heard of them. all projects.
Although this poor briefing is unlikely to have any concrete impact on investment plans, it will reinforce the feeling that operations in Downing Street are not going as well as they should.
Earlier this month, friction was reported between staff at Number 10 and Sue Gray quit her role as Prime Minister Sir Keir Starmer's chief of staff.
Current freeports are located around the ports of Inverness, Forth, Teesside, Humber, Liverpool, Anglesey, Milford Haven, Plymouth, Solent, Thames, Felixstowe and Harwich.
A Treasury spokesperson said the Government was keen to reassure businesses considering investing in low tax areas that their plans had not changed, stressing that the Government was still committed to “ensuring that customs advantages remain available.
On Friday, Sir Keir backed the concept of free ports which he said “work well”, despite it being a policy inherited from the previous Conservative government.
He added that freeports “could work better” with greater involvement from local businesses and politicians.
Critics, however, have suggested they are simply moving economic activity or jobs from one part of the country to another, rather than creating new opportunities or roles.
