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Mr. Fabricant: My hon. Friend contrasts the difference in travelling from one part of the EU to another, not involving the UK. He asked whether there had been a mistake in the drafting. Does he think that we have over-egged the European Union directive and made it a tougher regime than it need otherwise be?
Mr. Wilshire: I am certain that we shall behave as we usually do in the United Kingdom, and rigorously enforce measures while others shrug their shoulders and may or may not bother to enforce them. That is one of the reasons why we suffer time and again at the hands of Brussels bureaucrats, when others get away with ignoring them. Again, Mr. Deputy Speaker, if I went down that track for much longer, you would rightly call me to order.
Another phrase that concerns me in the wording of the new clause is "for consumption on board". We have not had an explanation why the Government suggest that.
I am all in favour of as many concessions as we can get, but this seems illogical. The reason why our harmless bit of fun has been taken away, as I understand it, is that the Brussels bureaucrats decided that it was against the interests of the single market for us to be allowed to buy duty free as we travel round the EU.
If we travel from Paris to London, we are travelling within the EU, but the Brussels bureaucrats say that it is perfectly all right for us to have duty free, provided that we consume it. That is daft. If we can get a concession for consumption, why not other concessions?
Another thing bothers me about the words "for consumption on board". We now know that duty-free prices at places such as Heathrow were seriously inflated--we are talking about £5 on an £8 bottle of spirits. We are granting an exception so that ferry companies and aircraft operators can sell duty-free drinks to passengers. Do the Government plan to make it compulsory for bar price lists and menus to make it clear that the person serving drinks is taking advantage of a duty-free perk? If they do so, there would be a warning of some sort and, when people paid, they would not make the mistake of comparing bar and menu prices with those in what was the duty-free shop and is now the duty-paid shop to judge whether they were being ripped off.
What do the Government have in store for Eurostar in respect of the words "for consumption on board"? When people catch a ferry from Dover to Calais or fly from Heathrow to Charles de Gaulle what they eat, drink and smoke on the ship or the aircraft is duty free--that is the concession--but it is not if they catch a train. That also is illogical. Perhaps the Paymaster General can tell the House why Eurostar and Le Shuttle have been singled out for such particularly nasty treatment.
Mr. James Gray (North Wiltshire):
Has my hon. Friend noticed the astonishing urgency with which the Minister's Parliamentary Private Secretary is dashing up and down to pick up bits of briefing? He is obviously hitting a few bull's eyes.
Mr. Wilshire:
I am fully expecting detailed answers to all my questions. Although some Labour Members may think that I am being a bit of a nuisance, Mr. Deputy Speaker--[Interruption.] I apologise, Madam Deputy Speaker--[Interruption.] I apologise, Madam Speaker; you can tell that I have been carried away by my enthusiasm.
The new clause raises two other issues--the safety of aircraft and environmental damage. Profit margins are being cut and the holding down of prices in what were duty-free shops will work only if sales increase. There is now no limit on what people can buy duty paid at Heathrow airport or wherever and it therefore follows that it is perfectly possible to buy a large number of bottles of spirits.
When I raised that issue with the Paymaster General in Committee last week, I received the answer that airlines would not allow vast numbers of bottles to brought on board. However, the number does not have to be vast. Someone with no hand luggage could easily bring four or five bottles on board instead of one. That would be within most airlines' limit. Alternatively--this has already happened--someone could buy a large number of bottles and arrange for the aircraft operator to carry them in the hold.
I represent part of Heathrow, and I am worried by the thought of large quantities of inflammable liquid in glass bottles hurtling about the skies. I believe that we have opened up a safety problem and I should be grateful if the Paymaster General would address it. I am also concerned about the extra weight that will be carried by aircraft. It would be easy to say that I am making another pedantic point, but if the weight carried by an aircraft increases the burn of aviation fuel increases and further damage is done to the atmosphere and the ozone layer.
There is a simple solution to the problem that the new clause causes: the Government should allow the sale of duty-paid products at lower foreign prices to arriving passengers at British airports. They would not then need to go to Charles de Gaulle airport in Paris to stock up with huge numbers of cheaper bottles. They could fly with less luggage, the aircraft would be safer and there would be less chance of environmental damage. I commend that approach to the Minister.
So many messages have been passed to the Paymaster General that I have probably asked enough questions of her. I see that another answer is on its way to her as I speak. I hope that she will not fall into the trap of saying simply that I am being difficult, or trying to wile away a few minutes. All my questions are serious. They raise difficulties about the wording of the clause and the workability of a forthcoming Act of Parliament. All of them need clear answers, although some were technical and, if the answers being passed to the hon. Lady do not answer them in detail, I should be grateful to receive a written reply, copied to the Library.
I deplore what has happened. It has spoiled the fun of many. It causes redundancies in my constituency, and it is yet another reason why the EU's powers need to be taken away. But I am a realist. What has happened has happened, and we must get the Bill right. Will the Minister repeat the undertaking that she gave in Committee to introduce the changes with the lightest possible touch from Customs and Excise in the early stages, when problems will arise? Will she repeat her undertaking to review absolutely everything over the next three to four months--not just what suits her--to see whether we can learn from the mistakes that the Government have undoubtedly made?
Dawn Primarolo:
I will not say that the hon. Gentleman was wasting time, and he was wrong to suggest that I should. I think that he is misguided, and that he has not paid attention to the fact that the successor regime operates already. He obviously has not read the newspapers or the undertakings given by suppliers about the possibility of job losses, but I understand entirely why he, like any good constituency Member, is particularly concerned about the future employment of his constituents.
The hon. Gentleman was present when I made it clear that preparations for the abolition of duty free and arrangements for the successor regime were working smoothly for traders and travellers. I am happy to repeat that Customs and Excise will work closely with the trade and will apply the light touch for which he asked. We shall review the work of the successor regime in the light of experience. The hon. Gentleman will have seen that many of the disasters that he predicted, and which he continues to forecast, have not happened.
The hon. Gentleman asked why on-board consumption was VAT free. The Commission announced on 2 October 1998 that member states could continue to allow goods consumed on board to be relieved of VAT. I explained in Committee that the Government would allow that to happen.
Mr. Wilshire:
The Minister may recall that I asked whether consumption was exempt of tax alone or of tax and duty. She may have made a slip of the tongue, but I understood her to say that goods would be free of VAT. Will they be free of VAT alone, or duty too?
Dawn Primarolo:
I am sorry; I misheard the hon. Gentleman. I thought that he was asking about VAT only. The position that I set out earlier on excise duty and VAT is correct.
The hon. Gentleman asked about the immediate destination provision. As I said in Committee, if a flight involves a stop-over outside the European Union, travellers have a limited entitlement to duty-free goods. As he well knows, it is a very limited entitlement and may not be the bargain that they thought they would get.
Over the next few months, the staff of Customs and Excise will concentrate on helping the industry to adjust to the new regime. In the long term, Customs and Excise does not expect the duty-paid regime to be any more demanding of its resources than the former duty-free regime.
The hon. Gentleman may have seen the report in The Sunday Telegraph on the decision of British Airways not to sell alcohol and tobacco on flights, but to continue to offer other goods under the EU restrictions.
As I said to the hon. Gentleman in Committee, safety is a matter for the airline companies, which are perfectly capable of enforcing a reasonable attitude towards the carrying of duty-paid goods, and are doing so.
The hon. Gentleman's final point was on triangular routes. A ferry may move through several duty regimes. As I said in Committee and in my opening remarks, the simplified arrangements apply to the majority of journeys. However, in the exceptional case of triangular routes, fuller accounting procedures are required. Those operators are already used to dealing with more complex accounting of their stores and sales under the old regime. The problem that the hon. Gentleman forecasts is not manifesting itself in the spectacular way that he continues to suggest.
The Government would have preferred more time to work on a successor regime, but it was not available to us. We would have preferred it if the previous Government had made some preparation for the abolition of duty free, for which they voted, but they did not. In the circumstances, we have a regime that has been welcomed by the trade, that is working well for the travellers,
and that is ensuring that the transition from duty free to the new regime is as smooth as it could possibly be. I commend the new clause to the House.
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