House of Commons
Thursday 11 January 1996
The House met at half-past Two o'clock
PRAYERS
[Madam Speaker in the Chair]
PRIVATE BUSINESS
City of Westminster Bill [Lords]
Motion made, and Question proposed,
To be considered on Thursday 18 January.
That the Promoters of the City of Westminster Bill [Lords] may, notwithstanding anything in the Standing Orders or practice of this House, proceed with the Bill in the present Session; and the Petition for the Bill shall be deemed to have been deposited and all Standing Orders applicable thereto shall be deemed to have been complied with;
That if the Bill is brought from the Lords in the present Session, the Agents for the Bill shall deposit in the Private Bill Office a declaration signed by them stating that the Bill is the same, in every respect, as the Bill which was brought from the Lords in the last Session;
That, as soon as a certificate by one of the Clerks in the Private Bill Office, that such a declaration has been so deposited, has been laid upon the Table of the House, the Bill shall be read the first and second time and committed (and shall be recorded in the Journal of this House as having been so read and committed) and shall be committed to the Chairman of Ways and Means, who shall make such Amendments thereto as were made by him in the last Session, and shall report the Bill as amended to the House forthwith, and the Bill, so amended, shall be ordered to lie upon the Table;
That no further Fees shall be charged in respect of any proceedings on the Bill in respect of which Fees have already been incurred during any previous Session.
TREASURY
Alcoholic Drinks and Tobacco (Smuggling)
1. Sir Fergus Montgomery: To ask the Chancellor of the Exchequer what priority he attaches to tackling the smuggling of alcoholic drinks. [7076]
3. Mr. Hawkins: To ask the Chancellor of the Exchequer what steps he is taking to counter the smuggling of tobacco and alcoholic drinks. [7078]
The Paymaster General (Mr. David Heathcoat-Amory): The Government take a serious view of smugglers, who seek to evade payment of revenue duties and undermine legitimate trade. Customs and Excise has about 250 single market excise staff specifically engaged in countering smuggling of alcohol
and tobacco. Additionally, other Customs staff involved in audit and investigation work make an important contribution.
In the 12 months to 30 September last year, Customs and Excise made more than 3,500 detections related to alcohol and tobacco with a revenue value of £7.6 million. Smugglers run the risk of losing the imported goods and the vehicle used to transport them, and of a prison sentence of up to seven years.
Sir Fergus Montgomery:
Is my right hon. Friend working with the honest traders in cracking down on smugglers? Is he aware of the effect of smuggling on the businesses of honest traders, who play by the rules and are penalised for their honesty?
Mr. Heathcoat-Amory:
Yes, I take seriously the fact that smuggling is not only anti-social and illegal but undermines legitimate traders. That is why, last November, Customs and Excise formed an excise alliance with trade groups representing those who make, transport, distribute and sell alcoholic drinks and tobacco, to exchange information about smuggling and to co-ordinate action to stop that traffic.
Mr. Hawkins:
What my right hon. Friend has said will be welcome to tobacconists and those in the licensed trade in my constituency, who have been concerned about the problem for a long time. I pay tribute to my right hon. Friend for the active steps that he has always taken to meet groups of people involved in the trade from my constituency and from many other constituencies. Has there been any opportunity to employ additional staff to deal with the important and serious problem of smuggling. Was it possible to introduce any particular measure in the latter part of last year, or will it be possible for the future?
Mr. Heathcoat-Amory:
Yes, I can give that assurance. In the present financial year, Customs and Excise has deployed additional staff where there is a particular risk. I am pleased to say that 20 additional excise verification officers have been allocated to work against smuggling during the coming financial year. We take the threat seriously, and deploy resources accordingly.
Mr. Skinner:
I think the Government have a cheek to talk about controlling smuggling of any kind, because when I met the customs officers in Southend last year, their biggest complaint was not about 20 new workers but about the fact that thousands of them had been given the sack and sent to the dole queue. What they are concerned about--
Madam Speaker:
Order. I should like to hear a question from the hon. Gentleman. He has not yet put a question to the Minister.
Mr. Skinner:
If the Minister is really concerned about dealing with smuggling, what he ought to do--
Madam Speaker:
Order. The hon. Gentleman is a long-standing Member of the House, and he knows that it is Question Time. He may have a perfectly genuine question to put to the Minister, but he must put it in the form of a question, not make a statement.
Mr. Skinner:
Why does the Minister not get off the backs of the customs officers and allow them to do the job that they are intended for--dealing with all those problems? Instead of talking about 20 staff being added, why does he not ensure that the thousands who have been sacked get their jobs back?
Mr. Heathcoat-Amory:
It is good to know that old Labour has survived into the new year, and still believes that public services require ever-more staff at ever-higher public cost. We believe in deploying staff effectively--where the risk and threat arise. I explained in answer to my hon. Friend the Member for Blackpool, South (Mr. Hawkins) that we are deploying extra excise verification officers to deal with the smuggling risk in the areas affected.
Ms Primarolo:
Is the Minister aware of the significant discrepancy between the amount of beer supposedly exported to France from the United Kingdom and the amount of beer that the French imported from us? According to official statistics, some 107,000 barrels of beer disappeared into thin air in 1994, whereas previously the two sets of figures were approximately balanced. We must assume that not all of that beer was drunk on a booze cruise somewhere. Will the Minister confirm that he is aware of, and concerned about, the damage being done to revenue into the Treasury, the growth of illegal duty scams and criminal activity and the threat to jobs in this country? Could he explain to the House the Government's strategy for tackling this growing criminal activity?
Mr. Heathcoat-Amory:
I do not know whether the hon. Lady wrote her question before she heard my earlier reply, but I have outlined the additional staff and resources that we are deploying. The hon. Lady has reminded the House of something that is at least partly true--that cross-border shopping is only a part of the trade and smuggling is only a part of the problem. There is also a threat caused by the diversion of exports back on to the home market having received the repayment of excise duty. It is to counter all of those threats and illegalities that we have formed the excise alliance with the trade and deployed additional staff. In his Budget, my right hon. and learned Friend--recognising that specific problems affected certain excise items--either froze or reduced duty in some cases.
Mr. John Townend:
May I congratulate my right hon. Friend on the successes of Customs, but may I remind him that hundreds of millions of pounds of smuggled goods are coming over? If we could only take the simple precaution of having a customs officer open the doors of the dozens of transit vans which come over on the cross-channel ferries, we could stop this. However, I am told that that is against European Union regulations. If French industry was being damaged, can one imagine that the French would take any notice of the regulations? If we cannot open the doors of vans at the port, why can we not have a road block 50 yd down the road?
Mr. Heathcoat-Amory:
As I think that my hon. Friend recognises, the single market in Europe means that a port is no longer a routine fiscal frontier. However, that does not mean that we cannot open doors and examine cargoes where excise duty fraud is suspected. When I visited Dover last year, I saw the excise verification officers carrying out effective checks to counter the menace.
Economic and Monetary Union
2. Mr. Spearing: To ask the Chancellor of the Exchequer what criteria, other than those specified in the treaty of European Union, Her Majesty's Government apply as relevant to successful monetary convergence within the European Economic Community. [7077]
7. Mr. Purchase: To ask the Chancellor of the Exchequer what are his conditions for deciding whether Britain should use its opt-out in respect of proceeding towards economic and monetary union. [7082]
12. Mr. Renton: To ask the Chancellor of the Exchequer what assessment he has made of the permanence of the convergence criteria in the Maastricht treaty for countries wishing to join the single currency. [7087]
The Chief Secretary to the Treasury (Mr. William Waldegrave): The convergence criteria are set out in the Maastricht treaty. We regard differences in productivity growth and flexibility of labour markets as also being relevant. The opt-out negotiated by my right hon. Friend the Prime Minister means that we are not committed to join a single currency. We would seek to join only if it were in our national interest at the time.
Mr. Spearing: Does the Minister agree that the criteria would have knock-on effects for the criteria used for determining Treasury policy? Is the Minister aware that article 109.j.1. and protocol 6 article 3 state that a country must operate successfully inside the exchange rate mechanism--in whatever band--for two years before 1 July 1998? Would not that criterion produce problems for the Government's policy and for the country? Will the Minister list those problems? Would they include some of the difficulties being faced by Mr. Juppe and President Chirac?
Mr. Waldegrave: On the first part of the hon. Gentleman's question, all those matters will have to be judged at the time a country decides to go in or not. On his second point, which related to ERM membership before a country can join any single currency, the Prime Minister has made it perfectly clear that we would not be rejoining the ERM in this Parliament, and that we would not be going back into an ERM comparable to the old one in any Parliament in the future. Therefore, it will be for the Heads of Government at the time to judge whether the exchange rate economic criteria have been met.
Mr. Purchase: Would it not be a much easier decision for the Government to take if only they attended to the weakness and the lack of competitiveness of our leading companies--factors that have been exemplified by the appalling trade figures that have been announced? Would it not be better for the Government to spend their time attending to that so that we became a more prosperous nation, on the back of wealth-creating industries, than to trouble themselves over the niceties of convergence policy, which will eventually strangle us in any event?
Mr. Waldegrave: The hon. Member is a little confused. If one looks at the list of the most profitable companies in Europe, one finds that the lion's share of them are British companies. The hon. Gentleman is also unwise to go on one month's trade figures. The Labour party suffered from that mistake back in 1970. He might like to wait for the next month's trade figures, because the overall position on trade is not at all bad.
The hon. Gentleman would be unwise to wish to mimic some of the conditions that exist in Europe, particularly in the socialist countries. Although it gives me no pleasure to say it, as our unemployment rate steadily declines towards 2 million, it is sad to see German unemployment rising towards 4 million.
Mr. Renton:
Does my right hon. Friend agree that there are two different views about the convergence criteria in the Maastricht treaty? One view is that they could be regarded as shackles which will lead to higher unemployment in some of the weaker European economies; the other is that they are a totally necessary discipline to ensure that any country joining the European single currency has been exercising proper budgetary control, and control over its budgetary deficit. To which of those views does my right hon. Friend subscribe?
Mr. Waldegrave:
My view is that the disciplines that we have accepted are disciplines that we would have been happy to accept, whether or not Maastricht or convergence criteria existed. It is sensible to manage the economy in order to reduce debt and to have low inflation. It is sensible for the whole continent of Europe to manage its economy so that there is the minimum disruption and movement.
Sir Peter Tapsell:
While I am much heartened to hear my right hon. Friend re-affirm the Prime Minister's statement that a Conservative Government will never allow this country to rejoin an exchange rate mechanism, how is that to be reconciled with the fact, if I am correct, that the machinery for joining a single European currency at any time requires re-entry into the ERM 12 months beforehand?
Mr. Waldegrave:
That question is related to the one asked by the hon. Member for Newham, South (Mr. Spearing). It will be for the Heads of Government at any future summit to judge whether any exchange rate criteria have been met. As the Prime Minister has said to the House, the exchange rate mechanism, with its narrow bands, that existed at the time of the Maastricht treaty cannot be said truly to exist at all now. The problems for the Heads of Government will be interesting.
Mr. Shore:
Following the Minister's interesting replies and his confirmation of what the Prime Minister previously told the House about not joining the ERM in this Parliament or any other Parliament--if the Government are re-elected--can he say clearly whether membership of the ERM is still a condition for joining a single currency? It is not just a matter of interpretation, because the condition that we are a member for at least two years before the operation date is written into the treaty itself. Is the Minister saying that provisions written into the treaty are just a matter for interpretation and consideration, or is he saying that the treaty has no real validity?
Mr. Waldegrave:
The right hon. Member makes a fair and interesting point. I think that the Heads of Government will find themselves in some difficulty, because the ERM which existed at the time of the Maastricht treaty does not now, according to most interpretations, exist.
Mr. Yeo:
Does my right hon. Friend agree that the key criteria for judging whether we should join a single currency is whether it will be in the national interest to do so? Does he further agree that, in order to preserve that freedom, the vital consideration at that time--indeed during the whole of the intervening period--is neither to rule out the possibility of joining within any specified time frame nor to enter into any commitment to join until we can judge whether it is in our interest?
Mr. Waldegrave:
I entirely agree with my hon. Friend. It is the achievement of my right hon. Friend the Prime Minister to have put this country, uniquely in Europe, in that position. It is odd that the Labour party, and especially the Leader of the Opposition--who now describes himself as a born-again Thatcherite, which is a surprising description--apparently see no constitutional issues at all, according to the quotations that I have read, in joining the European monetary union. It is for that reason that my right hon. Friend the Member for Watford (Mr. Garel-Jones) was right to put that point to the Leader of the Opposition the last time the House discussed these matters. As the Leader of the Opposition sees no constitutional or other implications, we must take it that, if we have met the convergence criteria, he regards whether we join as merely a technical matter. That is not the position on the Conservative side of the House.
Mr. Malcolm Bruce:
Given that the Prime Minister has failed to persuade the Italian Government to co-operate in delaying the start of the potential EMU, in spite of the Italian Government's difficulties in meeting the criteria--a meeting perhaps of the unwilling and the unready--will the right hon. Gentleman assure the House that it remains Government policy to validate their opt-out by ensuring that they are capable of meeting the time scale, because otherwise he must accept that the opt-out will have no validity, in or out?
Mr. Waldegrave:
The United Kingdom will meet the criteria. A large number of other countries--most surprisingly, even Germany itself at the moment--do not meet the criteria. The situation that was foreseen at Maastricht is, in any case, not going to come about. It was then foreseen that all the countries of Europe, with the exception of the United Kingdom, which had negotiated an opt-out, were going to move smoothly into a single currency. It is clear that, whatever happens, a large part of the European Union is not going to join a single currency--at least, not at the first available date.
Mr. Nicholls:
Given that my right hon. Friend has a powerful and inventive mind, what conceivable circumstances could come about which would make it in this country's best interest to surrender for ever its fiscal independence, which would be the inevitable consequence of going into a European single currency?
Mr. Waldegrave:
It was a saying of the previous Prime Minister, my right hon. and noble Friend Lady Thatcher, that it is unwise to take decisions until one has to take them. It is the strength of this country's position, negotiated by my right hon. Friend the Prime Minister, that, if we want to, we can consider those issues at the right time. At the moment, they are entirely hypothetical.
Mr. Mike O'Brien:
What is the Government's policy on the use of the opt-out? Will the right hon. Gentleman
Mr. Waldegrave:
There is no confusion on the Conservative side of the House. It is a little unwise of the Labour Front Bench, half of whom were elected on a platform of leaving the European Community altogether and now regard whether we go into a single currency as merely a technical matter, to accuse us of confusion on this matter. I could read out quotations, to the embarrassment of members of the Labour Front-Bench team, about their position of conscience on how important it was to leave the European Community. Some of their right hon. and hon. Friends have stuck to that; they have thrown it all overboard.
Mr. Jenkin:
Is my right hon. Friend aware that some people argue that the opt-out from the single currency has damaged the country's interest? Is he aware that that argument is advanced by Opposition Front-Bench Members? Does that not seem extraordinary when they may well support us using the opt-out if it is not in our economic interest to join a single currency?
Mr. Waldegrave:
My hon. Friend is exactly right. The Leader of the Opposition on this, as on many other matters, has tucked himself in behind my right hon. Friend the Prime Minister and takes--as far as I can tell, because the position changes from day to day--more or less the same position. He would be very unwise not to, because for any party to say that it would not look at the issue at the time in the interests of this country seems to me unwise.
"I don't want to see a single currency--period",
or by the Deputy Prime Minister, who said that there can be
"no truly unified market without a single currency . . . A close association of monetary policies will be needed if the Single Market is not to be put at risk"? Will the right hon. Gentleman end the confusion on Government policy on the opt-out?
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