§ 2. Mr. Colvinasked the Chancellor of the Exchequer when he expects to receive a report from the appointed consultants about reviewing the customs and tax regulations covering freeports; and if he will make a statement.
§ The Minister of State, Treasury (Mr. Peter Brooke)The consultants were appointed in July 1984 to undertake a five-year research study to enable an initial evaluation of the freeport experiment. Annual progress reports submitted by the consultants to date include assessments of the problems which have arisen in the operation of freeports.
§ Mr. ColvinThat is a long time to have to wait. Is my hon. Friend aware that the experiment is unlikely to prove successful unless he does something to get the Customs and Excise off the backs of the freeports? Some of us believe that the Customs and Excise was determined to ensure that the experiment failed before it even started. The freeports need to be wholly free of VAT. In some instances, the VAT regime inside the freeport is even worse than that outside it, which is hardly a recipe for success.
§ Mr. BrookeI must rebut my hon. Friend's contention about the Customs and Excise. It has not changed any of the rules that were set out at the beginning of the freeports experiment. Freeports remain subject to European Community legislation. On the subject of consultants, there will shortly be an interim report.