Sunak announces Darlington as location for Treasury's northern headquarters and confirms Teesside freeport

Chancellor of the Exchequer, Rishi Sunak, holds his ministerial 'Red Box' outside 11 Downing Street, London, before heading to the House of Commons to deliver his Budget. Picture date: Wednesday, March 3, 2021.
The Chancellor, who represents Richmond in North Yorkshire, poses outside 11 Downing Street, before heading to the House of Commons. Credit: PA Images

Rishi Sunak has unveiled plans to move hundreds of Treasury officials to Darlington and confirmed Teesside will become a freeport, using his Budget statement to highlight regeneration in the area as embodying "the future economy of this country."

Darlington, which elected a Tory MP in 2019 for the first time in several decades, was one of several locations being considered for the Treasury's new 'economic campus.' The site will initially employ 750 officials and is expected to open before the end of 2024.

Pledging to do "whatever it takes" to help people and businesses through the crisis, the Chancellor also outlined an additional £65 billion of support and confirmed the extension of the furlough scheme and the £20 per week uplift in Universal Credit.

Sarah Glendinning, North East Director at the Confederation of British Industry (CBI), said the Budget "succeeds strongly in protecting the economy now and kickstarting recovery."

"Awarding freeport status to Teesside, as well as building a new Treasury hub in Darlington should bring benefits to local businesses and help the wider regional economy", she said.

  • Rishi Sunak spoke at length about Teesside during his statement in the Commons:

Tees Valley Mayor Ben Houchen, who is standing for re-election on May 6, said the Teesside freeport would create 18,000 skilled jobs within five years and support green growth, the chemical sector and advanced manufacturing.

"Future generations will look back on today and say this was the day Teesside, Darlington and Hartlepool was reborn as an industrial powerhouse", he said.

The freeport model works by allowing companies to import goods tariff-free and only paying once it is sold into the domestic market, or exporting the final goods without paying UK tariffs.

Chief secretary to the Treasury Stephen Barclay, quizzed by MPs last month, said the first freeports would "ideally" be "operational by the end of the year".

The 4,500-acre Teesside site will be the largest free port in the UK, encompass Teesside International Airport, the ports of Middlesbrough and Hartlepool and the Teesworks industrial development in Redcar.

Darlington has been unveiled as the location for a new Treasury base in the north of England Credit: ITV News Tyne Tees

The site of the Treasury's northern base has been the subject of months of speculation. In a video to his department's civil servants, Rishi Sunak said "a lot of thought and energy" had gone into choosing Darlington.

Mr Sunak said he was "really excited" about the decision, according to the recording of the message which has been shared on social media.

The Chancellor's Richmond constituency in North Yorkshire lies south of Darlington, which has convenient rail links to London via the East Coast Main Line.

Ben Houchen said: “The most powerful department in Government will soon beat with a Darlington heart."

Wednesday's announcements were met with enthusiasm by Conservative MPs on Teesside.

Simon Clarke, who represents Middlesbrough South and East Cleveland, said the Budget "has the potential to be the most significant moment" in the area's "modern history."

Darlington MP Peter Gibson wrote on Twitter that he was "absolutely over the moon" at the news of the Treasury coming to Darlington.

Andy McDonald, Labour MP for Middlesbrough, said the Treasury North announcement went "nowhere near replacing the loss of 6,680 civil servant jobs in the North East from 2010 to 2020."

In a statement, McDonald said freeports were "not a silver bullet", citing research showing that only one per cent of UK imports would benefit from "tariff inversion", "the main driver of economic activity in freeports."

"There is also a risk that freeports simply move economic activity around rather than increase it", he said.

The government said Teesside would benefit from a manufacturing port hub to help offshore wind, supporting up to 3,000 green jobs. Credit: PA Images

What are the other important points at a glance?

The Chancellor outlined a three-point plan to support people through the coming months, rebuild the economy and fix the ravaged public finances in the wake of the pandemic.

Among the billions pledged, the most significant commitments are:

  • Extension of the furlough scheme until September

  • Extension of self-employment help

  • More business grants

  • Universal credit £20 uplift extended

The Coronavirus Job Retention Scheme has protected more than 11 million jobs since its inception, but under plans to taper the government’s contribution, employers will be expected to pay 10% towards the hours their staff do not work in July.

The extension to the furlough scheme was welcomed by business organisations, with the CBI's chief economist Rain Newton-Smith saying it will keep "millions more in work and give businesses the chance to catch their breath as we carefully exit lockdown".

Economic think tank the Resolution Foundation's chief executive Torsten Bell said the phased tapering off will avoid a "risky cliff-edge", but warned that the "peak of unemployment is ahead rather than behind us".

However, shadow chief secretary to the Treasury Bridget Phillipson MP, who represents Houghton and Sunderland South, said the changes to support schemes "could have been made months ago" - accusing Mr Sunak of focusing on "getting his moment in the sun rather than protecting jobs and livelihoods".

Len McCluskey, general secretary of Unite, said that while the extra months of furlough support offer "some stability in the rocky months ahead", the scheme should be extended until 2022.

  • Video report by ITV News Tyne Tees correspondent Rachel Bullock: