House of Commons Hansard Debates for 1 Dec 1993

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and tobacco to British visitors. Of course we understand the attraction of that, but it is important to keep the whole thing in perspective.

In many cases, the goods can be purchased at considerably lower commercial prices, irrespective of the duty across the channel. That has been reognised and has been acted on by some firms in Britain to improve their position. That trade was to be expected. My right hon. Friend the Member for Kingston upon Thames (Mr. Lamont) said in 1992 that the Exchequer might lose a total of about £250 million a year in revenue as a result of the single market. There have been claims that the volume of cross-border shopping has been dramatically greater than that which is implied by that estimated revenue loss. However, I have monitored the receipts of duty extremely carefully month by month, as the House would expect me to do. The fact remains that, if anything, those estimates look as if they were on the high side rather than the low side.

Various surveys suggest different increases in the legitimate trade but there is nothing to suggest that the loss is anything like as drmatic as some of the newspapers have suggested. It is nothing like enough to justify people saying, as they occasionally do in the newspapers, that we need to reduce the rate of duty in order to preserve the revenue. Even if the revenue loss from increased cross-border shopping were more than £250 million, if one considers that we get £5 billion on alcohol and £7 billion on tobacco from those duties, the House will realise that it is not something that enters into the calculations much.

There have also been references during the debate to the proposed air passenger duty that the Chancellor introduced in his Budget. That fits the Government's strategy of shifting at least some of the burden from direct taxation by broadening the indirect tax base, and it makes a contribution to tackling the budget deficit, which has been discussed so much in the past two days.

The tax addresses a sector where expenditure is currently subject to very little indirect taxation because of the VAT zero-rating and the use of duty free fuel by international aircraft and most domestic services. If that is compared with some of the areas of expenditure that we tax already, it can be seen that my right hon. and learned Friend was correct to say that that sector is lightly taxed. Such a tax has therefore been suggested to us from time to time. People do not always understand why some other countries have had such a tax for so long while we have not. The fact that others have similar taxes means that we can organise the duty in such a way that there will not be a major compliance burdens on the businesses involved.

The new tax will be raised through the ticketing system and we attach particular importance to designing the mechanism that will account for the duty to fit in with the airlines' existing systems as closely as possible. It is proposed that the tax will apply to passengers departing from United Kingdom airports from 1 October onwards. It includes domestic flights and flights to the European Community, on which the duty will be £5. That covers rather than more than 60 per cent. of all passengers who fly from United Kingdom airports.

To protect the position of the United Kingdom's international hub airports, there will be an exemption for transfer and transit passengers. There is also a provision that those coming from, for example, Edinburgh through

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Heathrow to another destination will pay only a single charge, which will depend on the final destination to which they are heading.

Mr. Blunkett : The Chancellor of the Exchequer told us all that yesterday afternoon. I remember him specifically talking about internal flights. Will the Paymaster General tell us instead why the Government have clearly broken their promise not to increase taxes?

Sir John Cope : I shall come to Labour's policies, our own policies and the election in a few moments. I was asked about details of the tax, and I think that it is important to put them on the record. The other new tax that was proposed--insurance premium tax--goes on a sector that has been lightly taxed because of the exemption from VAT that it enjoys. My right hon. and learned Friend also spelt out some of the particulars of that yesterday, but the impact on households and industry of the insurance premium tax is important.

My right hon. and learned Friend mentioned some of the ways in which it would affect people. It would be about £35 a week for the average household. I can give more particulars to the House. The average tax on contents insurance, which about three quarters of households have, will come to about 6p a week, although obviously it depends on how large is the house and how elaborate are the contents.

Mrs. Helen Jackson : Did I hear the Minister correctly? Did he say that the cost per household of the tax on insurance was to be £35 a week?

Sir John Cope : No, it will be 35p a week. I hope that that is what I said. It is what I intended to say and it is what my right hon. and learned Friend the Chancellor told us yesterday. [Interruption.]

Madam Deputy Speaker : Order. People might hear better if there were not private conversations going on.

Sir John Cope : Thank you, Madam Deputy Speaker. The tax will be due on all payments made on or after 1 October 1994. For policies that span that date, the tax will not be due if the premium has been fully paid before 1 October but will be due on any payments made after that date. The Finance Bill will also include specific measures to combat forestalling. It will not be possible to avoid the tax by making payments in advance of 1 October 1994 if insurance commences on or after that date. We also attach considerable importance to ensuring that the implementation of the tax is done in a way that gives rise to the minimum compliance costs either for the industry or for the Government.

Mr. McCartney : Will the principle that the right hon. Gentleman has just enunciated, that advance payments will still be subject to VAT, also be true about advance payments for gas and electricity? In other words, will advance payments for fuel made before the date of the introduction of VAT on fuel be exempt from VAT? If that is the position, people who can afford to pay a year in advance will get a tax rebate at the expense of others who have to pay quarterly bills in the normal way.

Sir John Cope : It is not on precisely the same lines as the insurance premium tax, but nevertheless the hon. Gentleman is right in principle. The normal VAT rules

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apply. The tax point is when somebody pays, if they pay in advance, and that applies to VAT on fuel as well as to other matters in the VAT--

Mr. McCartney : That is the opposite.

Sir John Cope : On the contrary, it is similar to what I have just outlined with regard to the insurance premium tax. The tax point is when one pays but one cannot pay in advance for insurance that does not commence until after 1 October.

Mr. McCartney : Will the right hon. Gentleman clarify the matter precisely? Is it right that one cannot pay in advance to avoid VAT, whether on fuel or on anything else?

Sir John Cope : Yes, if one pays in advance for VAT for any purpose, and that includes for fuel, the rate of VAT that applies is the rate that applies at the time that one pays, as opposed to when the service is delivered. That is the normal VAT rule and it applies equally to fuel as to other matters eligible for VAT.

We are anxious to ensure that the compliance arrangements for the insurance premium tax are of the minimum possible cost and are designed with the fullest co-operation of the industry, to ensure that the burden is as small as possible. That is part of another of the themes of the Budget and of the Government--to ensure, through deregulation, that all taxation provisions are as user-friendly as we can make them. That includes VAT, and we have several proposals on that.

Mrs. Wise : Does the right hon. Gentleman understand that to impose a tax on people insuring their homes and the contents of them is oppressive? He said that three quarters of the population have insurance policies. Should not the Government, especially this Government who are always talking about people standing on their own feet, do something to encourage those who have not been able to insure their homes and the contents of them rather than penalising those who have?

Sir John Cope : The hon. Lady must make her own judgment about whether it is right that a large amount of expenditure for all people should be left out of the tax system in the way that insurance is. She knows that our philosophy has been to extend, and to some degree accelerate, taxation on indirect tax rather than taxation on income. The hon. Lady knows that, and the proposal is in line with that. I understand all that she says, and I understand also those who say that we should never extend taxes of any sort. At the same time, it is the duty of the Chancellor to look across the board and to see areas where taxation can be best raised. He must make his judgment on that, and whether that judgment is the same as the hon. Lady's is a matter for her also.

I was talking about deregulation, and the House knows that we have increased the registation threshold of VAT. We are also making proposals in connection with those businesses which are struggling to survive, and which have difficulties in paying their VAT. At the moment, those businesses which are in administrative receivership or are heading for being wound up have not been able to set off any of the VAT refund which they were due to receive against their VAT bills. We propose in future that they should be able to do so, as is the case under an ordinary voluntary arrangement under bankruptcy or liquidation.

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Businesses which trade in that way but which are in difficulty have been able to offset the VAT under the extra statutory concession. We propose to write that into law to extend it as I have described. We are also proposing to complete the package of VAT reforms in the March Budget which deal with repayment supplement. I announced the other day some further improvements which will make it easier for businesses to qualify for the cash accounting scheme. In the excise field, we have made a series of proposals. The first of those concerns gaming machine licence duty, a matter of considerable interest to some hon. Members. As those hon. Members will know, we are proposing to improve the administration of the tax and we published a consultation document about that earlier in the year.

There were some reservations about the proposals to abolish seasonal licences and the facility to surrender licences and to obtain a refund. Seasonal licences were introduced in the early 1980s. In fact, we have taken note of the reservations and we propose to continue both seasonal licences and the surrender provisions. We propose also to reform excise law to make tax enforcement more effective. At the same time, some safeguards will be introduced in the form of the decriminalisation of minor breaches of the excise rules. The trader will be given the right of an appeal to a tribunal in the case of both excise and customs law. We are extending the power of the VAT tribunals to allow them to take on appeals from those areas as well. That is part of the modernisation of the customs procedure to bring it more in line with modern business methods. I was interested in what the hon. Member for Norwich, South (Mr. Garrett) had to say about resource accounting and accruals. Speaking as a chartered accountant--

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although one who has not practised in a long time--I believe that that is a most important sea change in Government finances, and that it has profound long-term significance.

My hon. Friend the Member for Stratford-on-Avon (Mr. Howarth) seemed to touch on a similar point in his speech when he drew attention to the references to human capital in the Red Book. We propose to publish a document about resource accounting next year. In the meantime, studies have been set in hand on the matter under the new chief accountancy adviser. One important aspect of that--to which the House will have to pay great attention in due course--is the interaction with voting and the way in which accounts are presented to Parliament. We are drawing both the Public Accounts Committee and the Treasury Select Committee into the discussion on that subject. Much else has been said, but I should return to the main theme of today's debate and, indeed, of the days of debate on the Budget. Yesterday was devoted to spelling out the Government's view of what should be done and the plans for doing it. The day following the Budget is usually the opportunity for Opposition parties to set out their alternatives. Neither the hon. Member for Newbury (Mr. Rendel) who spoke for the Liberal Democratic party nor the hon. Member for Dunfermline, East (Mr. Brown) who spoke for the Labour party took that opportunity. [Interruption.] The hon. Member for Newbury said that the Liberal Democrats would abolish mortgage interest tax relief. [Interruption.]

Madam Deputy Speaker : Order. I have spoken before about seated interventions. I expect the Front Bench at least to set some sort of example.

Sir John Cope : The Labour party--

It being Ten o'clock the debate stood adjourned.

Debate to be resumed tomorrow.

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PETITION

Child Support Agency

10 pm

Mrs. Alice Mahon (Halifax) : I beg leave to present a petition To the Honourable the Commons of the United Kingdom of Great Britain and Northern Ireland in Parliament assembled.

The humble petition of the residents of Halifax sheweth that they regard the Child Support Act 1991 as a failure, and believe that its effect upon single mothers on income support and on second families is injurious, that many women on income support have been left worse off through loss of passported benefits and that single mothers have been intimidated to authorise the

Child Support

Agency to pursue fathers of second families. This is grossly unfair and a serious poverty trap and the petition therefore calls on this House to abolish the Child Support Act and the agency.

Wherefore your petitioners pray etc.

To lie upon the Table.

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Young Offenders

Motion made, and Question proposed, That this House do now adjourn.-- [Mr. Wood.]

10.1 pm

Mr. Warren Hawksley (Halesowen and Stourbridge) : I thank you, Madam Deputy Speaker, for the opportunity of raising an issue which is of great importance nationally as well as in west midlands constituencies. A debate on the subject of young offenders could range over many days. I intend to specialise in particular in cases in the west midlands which show that public concern is legitimate. There has been a massive increase in the number of persistent young offenders in particular. That has led to the public outcry, which is fully justified, and to the courts and the police maintaining that they are powerless. They have joined the public in calling on the Government to take action soon and speedily.

Too many young offenders are going into court and leaving court laughing, not just at the judiciary but at society. They think that we are fools to let them get away with what they do. They appear persistently, time after time. I shall cite at length one case in Birmingham a few months ago.

In September, a 13-year-old appeared in court charged with 225 offences, mainly of breaking into cars, stealing cars or burglary of a comparatively minor nature, although the cost of the items that he stole totalled £23,000. The frightening thing is that, of the 225 offences, 175 were committed while he was awaiting trial at a so-called social services secure accommodation abode. He managed to leave the accommodation and commit many offences. Indeed, on one occasion he was re-arrested only three hours after being sent back there by the court.

The chief superintendent, John Jasper, who is in charge of the city of Birmingham centre area, said :

"If I could lock up my hard core of six, I could reduce city centre crime by 18 per cent. and car crime by 30 or even 40 per cent." He also commented that the magistrates were unable to help him to deal with the problem.

When the youngster eventually got to court, he was given 12 months' probation. Shortly afterwards, he was due to appear on a television programme that I was appearing on for Central Television. I arrived at the studio to be informed that, unfortunately, the youngster could not make it- -he had been detained yet again by the police. I should think that the police were sick of spending their time chasing someone who was committing that number of offences.

I am not critical of the Government. The Home Secretary has responded to the problem. Following discussions, his speech to the Conservative party conference contained 27 points covering many of the issues that I had raised, including cautioning.

In my district of Dudley, the chief superintendent, contrary to what the chief constable had thought could be done, suspended cautioning. The chief superintendent said that the small print stated that cautioning could be suspended in cases of extreme need. The number of house burglaries, car burglaries and joy-riding in his area led the chief superintendent to believe that he had the right to suspend cautioning. The results were interesting : in

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Dudley, joy-riding fell in the first four months from 248 cases a month to 97--a success for the suspension of cautioning.

The Government are right to look at bail-breaking. Too many offences are committed by those on bail. When my hon. Friend the Minister replies tonight, I hope that he will be able to give a guideline not just on whether serious offenders who are likely to reoffend will be denied bail. I hope that he will also consider more persistent and perhaps minor offenders, because they waste a lot of police time and cause a lot of inconvenience and concern to society. I also hope that the Minister will be able to give us some idea of when he hopes the secure accommodation for such youngsters will be available. It is important that society knows that it will not have to wait much longer for those people to be denied the way of life that they are pursuing.

It is also important that the age of criminal responsibility is considered again, because I believe that many eight-year-olds know the difference between right and wrong. At that age, if they are persistent offenders, they should be treated as young criminals, and they should be prosecuted for offences that they commit.

One issue involves social services more than the Home Office. It is the most important aspect of the issue of young offenders. I served in the early 1970s as a member of Shropshire county council's social services committee when it first became responsible for dealing with young offenders. We took over the running of homes that had formerly been Home Office-approved schools. In the past 20 years or so that social services have been responsible for the way that young offenders and young children are looked after, they have failed. The time has come for the Home Office to be given responsibility for the treatment of those youngsters.

From my files, I have taken out some newspaper headlines from around the September period. They read :

"Ram-raid boy on safari",

"Yobbo sent on sailing jaunt",

"Bailed youth sent to Jamaica"--

he was on five counts of arson at the time--

"Car thief was sent on £20,000 holiday",

"Yobs taken on £34,000 hols by care workers",

"11-week camping trip to Portugal"

and

"2 months rambling through France".

Are those punishments? the law-abiding youngsters in my constituency wonder why they stay law-abiding.

I coined a phrase which seems to apply today--nick a car, grab a social worker and go on holiday at our, the taxpayers', expense. That must stop. It is essential that the sort of holidays given to those youngsters are seen as undesirable. The director of social services for Shropshire told me that money was being saved by sending youngsters on such trips.

I asked how much was being spent. The answer that I was given was that £1,600 per child per week was being spent. When I asked whether that was saving money, he said yes. I confirmed with Dudley social services that to keep a child in care costs about £2,200 a week. That is unacceptable, when we consider that a person can be kept in prison for about £260 to £270 a week. I cannot understand why it is necessary to spend so much on these children.

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I am concerned that social services are using these private homes. The Bryn Melyn home at Bala has been involved in many of the cases that I have quoted. People have been sent to Portugal, and a girl was sent swimming with dolphins. I am not sure whether that was in Ireland or Israel : it may have been both. They have sent people to France and Eire. I asked, "Do these trips succeed?"

Mr. Christopher Gill (Ludlow) : My hon. Friend may be interested to know that the mother of a youngster who was sent to Portugal said that it was a total waste of time and money. Who should know better about the effect of that so-called punishment on the young person than the mother?

Mr. Hawksley : I thank my hon. Friend for his helpful comment. The mother was right, and, yet again, social services were wrong. The youngster has returned. When he was there he was, I was told, doing a computer studies programme. I am advised that, unfortunately, they sent the wrong programme, so he spent most of his time scuba diving and, apparently, getting badly sunburned. I was worried that Shropshire county council might be sued because of the sunburn that he suffered.

After his return the Express and Star reported :

"A Midland teenager car thief has admitted going on a crime spree only weeks after returning from a £20,000 trip to Portugal designed to reform his behaviour."

He was back in Telford court with a list of charges against him. As well as that, he managed to escape from the court, and had to be arrested yet again. Surely such people should be locked up for some time.

I hope that social services will look at the way establishmees department said, "Well, it is up to Gwynedd. It has approval for running the establishment."

The Home Office should take over the responsibility of running these establishments and for the care of young offenders. The madness of holidays and the rampaging of persistent offenders must stop quickly. Over the 20 years that social services have had responsibility, they have failed badly. Let us treat these persistent offenders as young criminals and stop their holidays. Lock them up quickly, so that the property of our constituents is safer. 10.12 pm

The Minister of State, Home Office (Mr. David Maclean) : I am grateful to my hon. Friend the Member for Halesowen and Stourbridge (Mr. Hawksley) for giving me the opportunity to hear the views of hon. Members on juvenile offenders and for giving me the chance to state plainly Government policy in this area. I am also grateful to my hon. Friends the Members for Stevenage (Mr. Wood), for Gravesham (Mr. Arnold) and for Ludlow (Mr. Gill) for being present throughout the debate, and for similarly pressing me on these matters. Their constituents have exactly the same concerns as those of my hon. Friend the Member for Halesowen and Stourbridge.

The Government's first duty is to protect the public : that must always come before anything else. From that perspective, there is no doubt that there are currently gaps in courts' powers for dealing with juvenile offenders, particularly those who are under 15. My right hon. and

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learned Friend the Home Secretary recently announced that the Government intend to give the courts the powers they need to deal properly with alleged and convicted offenders of all ages, and that includes juveniles. If that means custodial sentences, so be it. Critics of these options often talk of secure institutions as colleges of crime. But at present, persistent juvenile offenders are at large committing crimes openly on our streets in front of other children, giving them hands-on experience.

In my view, street corners must be more efficient universities of crime than any prison, because the prisons contain only those criminals who are unsuccessful enough to have been caught. The best teachers are still at large.

Let it be made clear : on those street corners children are not learning to steal Smarties or to scrump a farmer's apples. Those children are embarking on serious crimes, often with serious implications for their victims, who are often other children. Stealing a car, driving it dangerously, putting the lives of other people at risk, is a serious crime. Burgling a home, often one that is lived in by a defenceless older person, is a serious crime. What should we do with the juvenile who commits such a crime not once, not twice, but over and over again?

We could relate stories of such offenders ; the 15-year-old in Sunderland who already has 55 convictions and who the police believe is responsible for almost 50 per cent. of crime in the city centre ; or the 15-year-old in Bexleyheath who has already been convicted of 18 burglaries, two thefts, three criminal damage charges, an assault and riding in a stolen car. Tonight we heard another frightening example from my hon. Friend the Member for Halesowen and Stourbridge, of a juvenile offender, a youngster, with an horrendous record of criminality at that young age.

We do not need to be guided, however, by those individual stories, because the same message is coming out loud and clear from throughout the country. There is a hard core of offenders--not thousands, but only hundreds--with whom the system is quite unable to cope, but that small number of offenders just do not respond to what is currently available.

For those young people who continue to offend in spite of high-quality community schemes, there needs to be a custodial option. For 12 to 14-year- olds, the secure training order will be that option. For 15 to 17-year- olds, detention in a young offender institution is already the custodial option, thanks to changes that were made to the criteria for custodial sentences by this Government in the Criminal Justice Act 1993. So the courts will get real powers to deal with those juveniles whose offending has got completely out of control.

I remind my hon. Friends that we intend to introduce proposals for a secure training order. That will be a new sentence for 12 to 14-year-olds who have persistently offended and failed to comply with supervision in the community, and whose offending is so serious that only custody will do.

It is intended to be a determinate sentence for between six months and two years, one half of which will be served in a secure training centre and the final half under supervision in the community. We want the new sentence to provide good-quality regimes that are designed to educate the young people, to tackle their criminal behaviour and to equip them to lead a law-abiding life in the community.

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For the older age group, the 15 to 17-year- olds, the sentence of detention is already available, but the maximum length of that sentence, detention in a young offender institution, is currently limited to 12 months. We believe that that places an unnecessary restriction on the courts, and the Government believe that they should have greater powers to pass longer sentences where necessary. We therefore intend to double the maximum sentence from 12 months to two years.

I intend to put firmly on the record the fact that, for many juvenile offenders, custodial responses will not be necessary. The figures demonstrate that plainly. One hundred and forty-two thousand 10 to 16-year- olds were known to have committed offences in 1992, of which 80 per cent. were cautioned, 8 per cent. were given a community sentence, 3 per cent. were fined and 1 per cent. only were detained in young offender institutions.

The same picture, I might add, is true in relation to adult offenders. Of all the adults who were convicted last year, 73 per cent. were fined, 10 per cent. were cautioned, 4 per cent. were given a community sentence and 3 per cent. only were sent to prison. It is therefore nonsense for the Government's critics to claim that "Lock them up" is our only policy either for adult offenders or for juvenile offenders.

Protecting the public, of course, requires consideration of the long term as well as the immediate future. Many youngsters commit crime, and most grow out of it. That is why the Government have developed over the past 10 years measures which deal with juvenile offenders without automatic recourse to the courts or to custodial penalties.

The response to the first offence is often a caution. That is fair, and it works for a large number of offenders. Cautioning has been successful in most cases. Recent evidence shows that 87 per cent. of those cautioned are not reconvicted within two years. A caution gives a clear warning to the youngster that his behaviour is not acceptable. It gives him a chance to stop that behaviour. However, there has been far too much repeat cautioning and cautioning for serious offences, and that is not acceptable either. That is why my right hon. and learned Friend the Secretary of State has issued new draft guidelines on cautioning.

Many offences are committed while the youngster is already on bail for previous alleged offences. In the next criminal justice Bill, we intend to introduce measures to reverse the presumption of those who are charged with an offence while out on bail for a previous offence.

To be effective in stopping offending, the punishment needs to follow the crime as quickly as possible. Delays in the justice system must be minimised. Inter-agency arrangements to reduce delays are already in place. The pre-trial issues steering group comprises representatives from the Home Office, the Lord Chancellor's Department, the Crown Prosecution Service, the Justices' Clerks Society and the Association of Chief Police Officers, and it has set time limits for the various stages of criminal proceedings. The targets for juvenile offenders are more demanding that for adult offenders, and there are already areas in the system where delays for all cases are being reduced. For example, in 1992, the period from first listing in magistrates courts to completion was 67 days. By June 1993, it had fallen to 53 days. It is important that we get juveniles to court as soon as possible to be tried for the offences they have committed.

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We have also enhanced the range and efficiency of community penalties by extending attendance centres, introducing a wide range of requirements to supervision orders, and developing tough national standards for the supervision of offenders in the community. We continue to support effective supervision in the community. Only last week, I opened a centre in Wandsworth which provides supervision and support in the community for alleged juvenile offenders on bail and convicted juvenile offenders subject to community sentences. Many community approaches have been developed in recent years, and many of them work well with juvenile offenders. However, community-based schemes have sometimes sought to keep young people out of custodial establishments as if it were an end in itself rather than a means to the more important end of reducing crime. Successful community schemes must provide an individualised and intensive programme for the offender. The programme must get to the heart of the individual's offending by addressing particular difficulties, whether it is drinking too much, lack of self-control, trouble managing money or whatever.

Community penalties must be just that--penalties. They will not have the confidence of the public or of my hon. Friends or myself unless they make the necessary impact on the offender. They must not be perceived as a soft option, or even as a holiday. Supervision in the community must not send out the wrong signals. Children must not be allowed to think that, if they embark on a life of crime, all they will get is tea, sympathy or holidays abroad.

Although a cushy foreign holiday is clearly an unacceptable and wrong response to offending, in some cases physically demanding activities can be a most effective way of instilling much-needed discipline into the lives of young offenders. I can see some merit in the kind of outdoor pursuits which could provide some young offenders with character-building opportunities, and I should be interested to hear from organisation with ideas on appropriately tough and demanding schemes. Links with private enterprise would be vital for the offenders concerned, to take the gains of their outdoor experiences into the world of work.

Community schemes must reflect the disciplines of working life. They must place responsibilities on the offender to attend and participate, with failure to do so leading to a speedy return to the courts.

The Government have already started the work of improving community penalties by setting national standards. These standards are now being reviewed, so that offenders ordered to serve community sentences receive proper punishment. Those improvements are crucial to the success of community penalties. Without them, the support of the police, clerks, magistrates, judges and, above all, the public will not be sustained. All those people must have faith in the penalties.

There is now more than ever a need for community penalties to be based on creative partnerships between statutory agencies and voluntary organisations. Local authorities, the probation service and the voluntary sector

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