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Dawn Primarolo: I gave the Committee figures for the change in loss of revenue, which has increased from 1995 to 1996, and is therefore clearly getting worse. We need to be mindful of the scale of the deterioration and consider what would be the most effective response from the Government.

I want to ensure that Opposition Members do not use the debate on a 1p increase on a pint of beer to imply, and state outside the Chamber, that the Government are complacent about the corrosive effects of smuggling and diversion fraud--we certainly are not.

I am grateful to the hon. Member for Mid-Sussex for his generous comments about Customs and Excise--particularly the operation at Gatwick airport--and its continuing success in dealing with smuggling. He made some suggestions about how customs activity could be expanded to increase our ability to deal with the problem.

28 Apr 1998 : Column 175

The hon. Gentleman also made a special plea for small brewers. He quoted two from his area, but there are several throughout the country. We have recently received proposals from the Society of Independent Brewers for a sliding duty scale for small brewers. The Government are examining those proposals, because we wish to ensure that we respond fairly to the entire industry and to the special pleadings of small brewers.

Ministers have studied the review report. We greatly value the input from the trade, which has been exceptional and very helpful. However, as I have told hon. Members before, in view of the possible public spending implications, the Government will announce their proposals as part of the outcome of the comprehensive spending reviews and when they can be evaluated, as hon. Members have required us to do in this afternoon's debate, against all the Government's priorities. They will be published at that stage. I have always told hon. Members and the trade that that would be need to be subject to questions of commercial confidentiality.

The Opposition sought to characterise the Government as the hate figure of the trade. I shall give one example of how the trade has responded positively to the Government's actions on smuggling. On 27 April, the Wine and Spirit Association of Great Britain and Northern Ireland wrote to me:

The trade recognises that the Government's strategy is correct. However, with the exception of the hon. Member for Kingston and Surbiton, Opposition Members cannot bring themselves to acknowledge that the Government are achieving what the Conservatives failed to achieve in 18 years of government. The clause is a reasonable measure to defend Government revenue. The Government have a strategy and a proportionate response to deal with smuggling and to start tackling diversion fraud.

Mr. Heathcoat-Amory: We have heard some exceptional speeches by my hon. Friends. In such debates, hon. Members often revert to type--the only Liberal Democrat solution that we heard from the hon. Member for Kingston and Surbiton (Mr. Davey) was to try to persuade other EU member states to increase their rates of duty in line with ours. As usual, the Liberal Democrats go for the high-tax, harmonised solution, which is simply a pipe dream. We should try, even slowly, to reduce our duty rates in the direction of those on the continent if we are to remove the cause of the illegality and smuggling.

A number of my hon. Friends spoke in this debate.My hon. Friend the Member for Vale of York (Miss McIntosh) has pursued this matter in the European Parliament as well, and my hon. Friend the Member for Tunbridge Wells (Mr. Norman) brought to bear an unrivalled knowledge of the retail trade. In a Chamber that is not over-burdened with practical business experience, his speech was particularly telling and valuable.

28 Apr 1998 : Column 176

My hon. Friend the Member for Beckenham (Mrs. Lait) has pursued this matter over several Parliaments. Her comments were largely ignored in the Minister's wind-up speech. The chief point stressed by my hon. Friends the Members for Mid-Sussex (Mr. Soames), for Blaby (Mr. Robathan) and for Guildford (Mr. St. Aubyn), all in different ways, was the seriousness of what is happening. That contrasted starkly with the attitude of Labour Members, who seemed almost to deny that a problem was being experienced either as a result of massive cross-border shopping--a huge new industry has been set up in France selling drink back to us and therefore denying us business, profit, jobs and duty to the Treasury--or as a result of large-scale smuggling and duty fraud.

Labour Members' comments show how quickly, in government, they have become out of touch with their constituents. They have only to go into their local off-licences or pubs to discover what people are saying.

The problem is serious and getting worse. The Financial Secretary gave some figures that show that the problem is escalating and that the loss of duty is increasing. That is happening even before the increase in duty as a result of last year's Budget and the increase when the clause comes into effect. When those duty increases work through, in contrast to the freeze in duty in the last two years of the Conservative Government, the situation really will get worse. Moreover, the strong pound makes cross-border shopping all the more attractive.

The Minister did not answer the point about the broken promise on the review. The Prime Minister promised, in the main trade journal, that there would be an urgent, independent, comprehensive study of the problem. He has broken that promise. There has certainly been no urgent study, because even the one carried out by Customs and Excise has not yet come out. In any case, it is not independent, because it has been carried out by a Government Department. It is not comprehensive because the trade report said that Customs and Excise has, on the instruction of Ministers, ruled out examination of the two main measures that could control the problem--either the reinstatement of border controls or the approximation of duty rates.

5.45 pm

All we have is a secret study, which has not been published, despite Government words about openness, accountability and the public's right to know, but has been carried out within the Government. We await that study--even if it could not be published on time at the end of last year, it would inform our debates at later stages. As my hon. Friend the Member for Tunbridge Wells said, if we do not have it, we shall strongly suspect that its conclusions are embarrassing to the Government and critical, of their policy.

They might well be critical, because, in our last two years in office, we froze duty rates. Despite a large budget deficit, we moved, albeit slowly, to narrow the gap between rates of duty and thus provide a disincentive to the illegal trade and cross-border shopping. That contrasts with the actions of this Government who, despite their looming budget surplus, have again increased those rates of duty. I shall invite my hon. Friends to vote against the clause.

Question put, That the clause stand part of the Bill:--

28 Apr 1998 : Column 177

The Committee divided: Ayes 293, Noes 123.

Division No. 258
[5.46 pm


Abbott, Ms Diane
Adams, Mrs Irene (Paisley N)
Ainger, Nick
Ainsworth, Robert (Cov'try NE)
Alexander, Douglas
Allan, Richard
Allen, Graham
Anderson, Donald (Swansea E)
Anderson, Janet (Rossendale)
Armstrong, Ms Hilary
Ashton, Joe
Atherton, Ms Candy
Atkins, Charlotte
Baker, Norman
Ballard, Mrs Jackie
Banks, Tony
Bayley, Hugh
Beckett, Rt Hon Mrs Margaret
Beggs, Roy
Bell, Stuart (Middlesbrough)
Benn, Rt Hon Tony
Bennett, Andrew F
Benton, Joe
Best, Harold
Betts, Clive
Blackman, Liz
Blizzard, Bob
Borrow, David
Bradley, Peter (The Wrekin)
Bradshaw, Ben
Brand, Dr Peter
Breed, Colin
Brinton, Mrs Helen
Brown, Rt Hon Gordon
(Dunfermline E)
Brown, Rt Hon Nick (Newcastle E)
Brown, Russell (Dumfries)
Browne, Desmond
Burden, Richard
Burgon, Colin
Butler, Mrs Christine
Byers, Stephen
Cable, Dr Vincent
Campbell, Alan (Tynemouth)
Campbell, Mrs Anne (C'bridge)
Campbell, Menzies (NE Fife)
Campbell, Ronnie (Blyth V)
Campbell-Savours, Dale
Canavan, Dennis
Cann, Jamie
Caplin, Ivor
Casale, Roger
Caton, Martin
Chaytor, David
Chisholm, Malcolm
Clark, Dr Lynda
(Edinburgh Pentlands)
Clark, Paul (Gillingham)
Clarke, Charles (Norwich S)
Clarke, Eric (Midlothian)
Clarke, Rt Hon Tom (Coatbridge)
Clwyd, Ann
Coaker, Vernon
Coleman, Iain
Cook, Frank (Stockton N)
Corbyn, Jeremy
Cotter, Brian
Cousins, Jim
Cox, Tom
Cranston, Ross
Crausby, David
Cummings, John
Cunliffe, Lawrence
Cunningham, Rt Hon Dr John
Cunningham, Jim (Cov'try S)
Cunningham, Ms Roseanna
Dafis, Cynog
Dalyell, Tam
Davey, Edward (Kingston)
Davidson, Ian
Davies, Rt Hon Denzil (Llanelli)
Davies, Geraint (Croydon C)
Dawson, Hilton
Denham, John
Dewar, Rt Hon Donald
Dobbin, Jim
Dobson, Rt Hon Frank
Donohoe, Brian H
Dowd, Jim
Drew, David
Drown, Ms Julia
Eagle, Angela (Wallasey)
Eagle, Maria (L'pool Garston)
Ellman, Mrs Louise
Ewing, Mrs Margaret
Fatchett, Derek
Fearn, Ronnie
Fisher, Mark
Flynn, Paul
Follett, Barbara
Foster, Rt Hon Derek
Foster, Michael Jabez (Hastings)
Foster, Michael J (Worcester)
Foulkes, George
Fyfe, Maria
Galloway, George
Gardiner, Barry
George, Andrew (St Ives)
George, Bruce (Walsall S)
Gerrard, Neil
Gibson, Dr Ian
Godman, Dr Norman A
Godsiff, Roger
Golding, Mrs Llin
Gorrie, Donald
Grant, Bernie
Griffiths, Jane (Reading E)
Grocott, Bruce
Gunnell, John
Hain, Peter
Hall, Mike (Weaver Vale)
Hall, Patrick (Bedford)
Hanson, David
Heal, Mrs Sylvia
Heath, David (Somerton & Frome)
Henderson, Ivan (Harwich)
Hepburn, Stephen
Heppell, John
Hesford, Stephen
Hinchliffe, David
Hoey, Kate
Home Robertson, John
Hood, Jimmy
Hoon, Geoffrey
Hopkins, Kelvin
Howarth, George (Knowsley N)
Howells, Dr Kim
Hoyle, Lindsay
Humble, Mrs Joan
Hurst, Alan
Hutton, John
Iddon, Dr Brian
Illsley, Eric
Jackson, Ms Glenda (Hampstead)
Jackson, Helen (Hillsborough)
Jamieson, David
Jenkins, Brian
Johnson, Alan (Hull W & Hessle)
Johnson, Miss Melanie
(Welwyn Hatfield)
Jones, Barry (Alyn & Deeside)
Jones, Helen (Warrington N)
Jones, Ms Jenny
(Wolverh'ton SW)
Jones, Jon Owen (Cardiff C)
Jones, Martyn (Clwyd S)
Kaufman, Rt Hon Gerald
Keeble, Ms Sally
Keen, Ann (Brentford & Isleworth)
Kennedy, Charles (Ross Skye)
Kennedy, Jane (Wavertree)
Kilfoyle, Peter
King, Andy (Rugby & Kenilworth)
Kingham, Ms Tess
Kirkwood, Archy
Kumar, Dr Ashok
Lawrence, Ms Jackie
Laxton, Bob
Lepper, David
Leslie, Christopher
Levitt, Tom
Lewis, Ivan (Bury S)
Liddell, Mrs Helen
Livingstone, Ken
Livsey, Richard
Lloyd, Tony (Manchester C)
Llwyd, Elfyn
Lock, David
Love, Andrew
McAllion, John
McAvoy, Thomas
McCabe, Steve
McCafferty, Ms Chris
McDonnell, John
McFall, John
McGuire, Mrs Anne
McIsaac, Shona
McKenna, Mrs Rosemary
Mackinlay, Andrew
McNamara, Kevin
McNulty, Tony
Mactaggart, Fiona
Mallaber, Judy
Mandelson, Peter
Marsden, Gordon (Blackpool S)
Marshall, David (Shettleston)
Marshall, Jim (Leicester S)
Maxton, John
Michael, Alun
Michie, Bill (Shef'ld Heeley)
Michie, Mrs Ray (Argyll & Bute)
Milburn, Alan
Mitchell, Austin
Moffatt, Laura
Moonie, Dr Lewis
Moore, Michael
Morgan, Ms Julie (Cardiff N)
Morley, Elliot
Morris, Rt Hon John (Aberavon)
Mudie, George
Mullin, Chris
Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Oaten, Mark
O'Brien, Bill (Normanton)
O'Brien, Mike (N Warks)
O'Neill, Martin
Organ, Mrs Diana
Osborne, Ms Sandra
Palmer, Dr Nick
Pearson, Ian
Perham, Ms Linda
Pickthall, Colin
Pike, Peter L
Plaskitt, James
Pond, Chris
Pound, Stephen
Powell, Sir Raymond
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Primarolo, Dawn
Purchase, Ken
Quin, Ms Joyce
Quinn, Lawrie
Radice, Giles
Rammell, Bill
Rapson, Syd
Reed, Andrew (Loughborough)
Reid, Dr John (Hamilton N)
Roche, Mrs Barbara
Rogers, Allan
Rooker, Jeff
Roy, Frank
Ruddock, Ms Joan
Russell, Bob (Colchester)
Sanders, Adrian
Sarwar, Mohammad
Savidge, Malcolm
Shaw, Jonathan
Sheerman, Barry
Sheldon, Rt Hon Robert
Skinner, Dennis
Smith, Angela (Basildon)
Smith, Rt Hon Chris (Islington S)
Smith, Miss Geraldine
(Morecambe & Lunesdale)
Smith, Jacqui (Redditch)
Smith, John (Glamorgan)
Smith, Llew (Blaenau Gwent)
Spellar, John
Steinberg, Gerry
Stevenson, George
Stewart, David (Inverness E)
Stinchcombe, Paul
Stoate, Dr Howard
Stott, Roger
Strang, Rt Hon Dr Gavin
Stringer, Graham
Swinney, John
Taylor, Rt Hon Mrs Ann
Taylor, Matthew (Truro)
Temple-Morris, Peter
Thomas, Gareth (Clwyd W)
Thomas, Gareth R (Harrow W)
Tipping, Paddy
Tonge, Dr Jenny
Touhig, Don
Trickett, Jon
Truswell, Paul
Turner, Dennis (Wolverh'ton SE)
Turner, Dr Desmond (Kemptown)
Turner, Dr George (NW Norfolk)
Twigg, Derek (Halton)
Tyler, Paul
Wallace, James
Walley, Ms Joan
Watts, David
Welsh, Andrew
Wicks, Malcolm
Wigley, Rt Hon Dafydd
Williams, Rt Hon Alan
(Swansea W)
Williams, Alan W (E Carmarthen)
Willis, Phil
Wills, Michael
Winnick, David
Wise, Audrey
Wood, Mike
Wray, James

Tellers for the Ayes:

Mr. Greg Pope and
Mr. David Clelland.


Ainsworth, Peter (E Surrey)
Ancram, Rt Hon Michael
Arbuthnot, James
Atkinson, David (Bour'mth E)
Baldry, Tony
Bercow, John
Blunt, Crispin
Bottomley, Peter (Worthing W)
Brady, Graham
Brazier, Julian
Brooke, Rt Hon Peter
Browning, Mrs Angela
Burns, Simon
Cash, William
Chapman, Sir Sydney
(Chipping Barnet)
Chope, Christopher
Clappison, James
Clark, Rt Hon Alan (Kensington)
Clark, Dr Michael (Rayleigh)
Clarke, Rt Hon Kenneth
Clifton-Brown, Geoffrey
Collins, Tim
Colvin, Michael
Cormack, Sir Patrick
Cran, James
Curry, Rt Hon David
Davies, Quentin (Grantham)
Davis, Rt Hon David (Haltemprice)
Day, Stephen
Dorrell, Rt Hon Stephen
Duncan Smith, Iain
Evans, Nigel
Fabricant, Michael
Fallon, Michael
Forth, Rt Hon Eric
Fowler, Rt Hon Sir Norman
Fox, Dr Liam
Fraser, Christopher
Garnier, Edward
Gibb, Nick
Gorman, Mrs Teresa
Green, Damian
Greenway, John
Grieve, Dominic
Hague, Rt Hon William
Hamilton, Rt Hon Sir Archie
Hammond, Philip
Harvey, Nick
Hayes, John
Heald, Oliver
Heathcoat-Amory, Rt Hon David
Horam, John
Howarth, Gerald (Aldershot)
Hunter, Andrew
Jack, Rt Hon Michael
Jackson, Robert (Wantage)
Johnson Smith,
Rt Hon Sir Geoffrey
Key, Robert
King, Rt Hon Tom (Bridgwater)
Kirkbride, Miss Julie
Laing, Mrs Eleanor
Lait, Mrs Jacqui
Lansley, Andrew
Leigh, Edward
Letwin, Oliver
Lewis, Dr Julian (New Forest E)
Lidington, David
Lilley, Rt Hon Peter
Lloyd, Rt Hon Sir Peter (Fareham)
Loughton, Tim
Luff, Peter
Lyell, Rt Hon Sir Nicholas
MacGregor, Rt Hon John
McIntosh, Miss Anne
MacKay, Andrew
Maclean, Rt Hon David
McLoughlin, Patrick
Madel, Sir David
Malins, Humfrey
Mates, Michael
Maude, Rt Hon Francis
Mawhinney, Rt Hon Sir Brian
Moss, Malcolm
Nicholls, Patrick
Norman, Archie
Ottaway, Richard
Paterson, Owen
Prior, David
Randall, John
Redwood, Rt Hon John
Robathan, Andrew
Robertson, Laurence (Tewk'b'ry)
Roe, Mrs Marion (Broxbourne)
Rowe, Andrew (Faversham)
Ruffley, David
St Aubyn, Nick
Sayeed, Jonathan
Shepherd, Richard
Simpson, Keith (Mid-Norfolk)
Soames, Nicholas
Spelman, Mrs Caroline
Spicer, Sir Michael
Spring, Richard
Stanley, Rt Hon Sir John
Steen, Anthony
Streeter, Gary
Swayne, Desmond
Syms, Robert
Tapsell, Sir Peter
Taylor, Sir Teddy
Tredinnick, David
Trend, Michael
Tyrie, Andrew
Viggers, Peter
Wardle, Charles
Waterson, Nigel
Whitney, Sir Raymond
Widdecombe, Rt Hon Miss Ann
Willetts, David
Wilshire, David
Winterton, Mrs Ann (Congleton)
Woodward, Shaun
Young, Rt Hon Sir George

Tellers for the Noes:

Mr. John M. Taylor and
Mr. John Whittingdale.

Question accordingly agreed to.

28 Apr 1998 : Column 180

Clause 1 ordered to stand part of the Bill.

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