§ Mr. Hanley
To ask the Chancellor of the Exchequer what is the outcome of the Treasury's evaluation of the freezone experiment.
§ Mr. Ryder
A copy of the evaluation report on the United Kingdom freezone experiment (1984–89) by the Treasury's consultants Roger Tym and Partners is being made available today in the House Libraries. Further copies are available from the Treasury.
The experiment has shown that freezones can be worth while and viable enterprises in the United Kingdom. The Government have therefore decided to offer a further designation for 10 years from August 1991 to the three currently operating freezones at Birmingham, Liverpool and Southampton. In addition, the Government intend to announce later in the year objective criteria against which further similar designations of freezones under existing EC and United Kingdom legislation will be considered by Customs and Excise. Applications from potential freezone operators will be invited at that time and will be judged primarily against the criteria of their commercial viability without public sector assistance and sufficient volume of demand to justify the Customs resources required at the freezone.
Finally, the Government have decided in the light of the evaluation report to introduce certain improvements to 707W the freezone regime. Subject to EC approval, VAT zero rating will be allowed for supplies of imported freezone goods where, under an agreement with the supplier, the customer is required to clear the goods from the freezone. Furthermore, the Customs and Excise guidance on the freezone regime will be updated and consolidated to take account of technical amendments made since the scheme was introduced to ensure that the scheme operates as clearly and simply as possible within the necessary EC and Customs procedures.