COULD Teesside become the new Cayman Islands? No, not with a Caribbean climate where the temperature rarely falls beneath 30 and Redcar’s broad sandy beaches become thronged with sun-seeking tourists all year round.

But rather could it gain the equivalent of the Cayman Islands’ tax haven status? Could Teesside become a low tax manufacturing haven?

Yesterday, the mayor of the Tees Valley, Ben Houchen, launched a campaign to persuade the Treasury to allow Teesport to be designated as Britain’s first “free port”. An array of local businesses has already signed up to the campaign which has cross party support – Redcar’s Labour MP Anna Turley is writing an amendment to the Taxation (Cross-Border Trade) Bill that will create the regulatory framework by which free ports could be set up once we leave the EU.

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At a normal port, a car manufacturer – as a simple example – would import headlights, build them into a car and then export the finished vehicle. The manufacturer would pay import duties on the headlights and then export duties on the vehicle. At a “free port”, though, the manufacturer would be charged reduced duties – or none at all – and may be offered other incentives, such as low corporation tax or grants for research and development. This would, in Mr Houchen's words, create an "international magnet", drawing in manufacturers from the world over to base themselves in such a haven.

The British Treasury would take a hit by missing out on the duties, and would be worried that other ports, like Tyneside or Merseyside, would also want the advantages.

But the local economy could get a boost with potentially thousands of manufacturing jobs being created by the incoming businesses.

“I never want people to avoid paying taxes, but we need to convince the Treasury that it will generate more revenue and that it will rebalance the economy,” said Ms Turley.

Free ports are not a new idea. The ancient Greeks knew about them, and there are about 3,500 “free zones” across the world. Indeed, there are 85 already within the EU – for example, Katowice in Poland, Madeira in Portugal, Bremerhaven in Germany, Le Verdon in France, Findel airport in Luxembourg, and, most famously, Shannon airport in Ireland where Europe’s first free zone was created in 1959 to successfully revive an ailing airport.

So, as Ms Turley said in the House of Commons last week, it is wrong to make this a Brexit issue, although it is also true that the EU doesn’t really embrace free ports because they “distort competition” – they attract companies because they undercut other locations.

But Ms Turley argues that turning Teesport into a free port would enable it to compete “on a level playing field” with all those places which already enjoy these advantages.

But do free ports really create loads of jobs? Richmond Conservative MP Rishi Sunak was one of the first to highlight their potential and in his 2016 paper for the Centre for Policy Studies, he cited the success of Nissan’s plant in Tennessee. It imports and exports through the free ports of Boston and Seattle and has kept jobs in America which would have disappeared had Nissan relocated to somewhere with lower wages, like South America. Mr Sunak's paper suggested that should the UK replicate the success of US free ports, it would create 86,000 jobs.

But Professor John Tomaney of University College London, who specialises in regional economic development and takes a keen interest in his home region of the North-East, is not so sure.

“Overall, studies do not provide any evidence for the principle that free ports boost economic growth,” he says. “Results are mixed at best. They seem to work best in attracting low-end manufacturing.

“Studies by the World Bank suggest that low labour costs, trade preferences, and fiscal incentives provided by such zones are almost never sustainable. Indeed, they create pressure for further distortions and ‘race to the bottom’ policies, including extending and increasing incentives, granting exemptions on minimum wage and labour rights and reducing environmental protections.

“At the same time, governments forgo revenue that is needed for investment in services and infrastructure.”

The hope, then, is that Teesside can provide a new model for free ports.

“Neither workers’ rights nor environmental rights are negotiable,” says Ms Turley emphatically. “It’s about customs duties – and that’s the attraction. Companies are always looking for ways to reduce their costs.”

With lower customs duties, she hopes that companies will look again at the advantages of Teesport and its adjacent available land – “geographically, it’s the perfect place”, she says, with the chemical industry an obvious earlier benefactor.

In pushing for this status, the Tees Valley is blazing a trail. Will that trail lead to it becoming a manufacturing haven, creating thousands of jobs for the land left derelict by the collapse of steel-making, or will it lead to it becoming something akin to a fiscal hell, desperately undercutting other ports in a bid to keep global business content?