Select Committee on Northern Ireland Affairs Minutes of Evidence

Examination of Witnesses (Questions 60 - 70)



  60.  The chemicals used for washing, the chemical I have just given, hydrochloric acid, is a very powerful chemical with potentially major environmentally damaging consequences. What quantities would these operations need of such dangerous chemicals in order to be able to perform this operation? Do you have any idea? It may give us a line as to how to perhaps police or trace these operations.
  (Mr Palmer)  Personally, I am not qualified to give an opinion on that, but maybe some other colleague might.
  (Mr Maxwell)  We have with us Peter Barlow who is our environmental and health and safety officer and perhaps I could have your permission, Chairman, to point that question to him.


  61.  Of course.
  (Mr Barlow)  Whenever one is dealing with either sulphuric acid, nitric acid or hydrofluoric acid in a case where you wish to remove dyes and markers, then you are dealing with sufficient quantities of a material to wash the product for it to be a dangerous operation in any case, so there are health and safety at work implications if one were doing it on a legitimate basis. You then have problems of disposal of those materials anyway and presumably they are not going to be disposed of in any way other than to the ground, so it is an extremely dangerous process both from the health and safety point of view and from the environmental point of view. As to the quantities involved, well, you are probably talking in terms of——

Mr McWalter

  62.  Let's take, say, 10,000 gallons or whatever it might be going on somewhere.
  (Mr Barlow)  You are probably talking in terms of washing with a volume which would be concentrated at 5 per cent of that 10,000 gallons being progressively used up and then the residue of reduced activity having to be discarded.

  63.  So 500 gallons for that kind of quantity of diesel?
  (Mr Barlow)  Yes.

  64.  It is clearly very traceable?
  (Mr Barlow)  That is right.

  65.  The other issue I wanted to raise was the issue of price harmonisation which is your preferred option. I cannot quite recall the figures from the Budget Red Book, but I do not think that a total cost on the public exchequer of about £7.5 billion would be much out of line if we were to try to remove the fuel price escalator and instead try and get into harmonisation with the Republic of Ireland, as this could be a rather spectacular case of the tail wagging a very large dog. Obviously these policies cause difficulties because we have a different pollution problem in England than they have in the Republic of Ireland and noxious fumes are much more significant here than they are in the Republic of Ireland, so it is a different problem and, hence, a different solution. Would you just suggest that the Committee recommends to the Chancellor of the Exchequer that we spend whatever the sum is, if it is £7.5 billion per annum, that we spend £7.5 billion per annum addressing this issue or do you have a more fine-grained way of addressing it?
  (Mr Holloway)  Yes, clearly pollution in Northern Ireland is on a much smaller scale. In fact you could say that pollution in Northern Ireland pollutes England or the west coast of Scotland more than Northern Ireland, so I think your justification would be a good one for actually addressing Northern Ireland in a different way. The whole of Northern Ireland's retail market products actually amount to 2.8 per cent of the UK's use and, therefore, similarly the cost of solving this problem, whichever route you take, is similarly small. I think we come back to the principal point there that what we are talking about is a lasting solution to prevent an illegal act continuing, and from the figures that we would actually suggest are appropriate if we address harmonisation of price, then we are not suggesting a criterion here that is based on any distance from the border with the Irish Republic because the smuggled product is available right across the Province and, therefore, we would be suggesting that this concession or rebate should be available right across the Province.

  66.  But only in Northern Ireland?
  (Mr Holloway)  But only in Northern Ireland.

  67.  And that being in defiance of the European Regulations about not having differential rates of duty within a single jurisdiction and also notwithstanding the fact that to start treating Ireland as a single entity for these purposes would inflame certain minorities within Northern Ireland itself. They might be getting cheap fuel, but I am not sure they would wish to get cheap fuel at the expense of increasingly seeing the island of Ireland as a separate entity.
  (Mr Holloway)  I think we return to the political will in order to address the problem and indeed it has been suggested in the past that to actually have this considered and supported by perhaps Customs & Excise, we would indeed have to have the kind of political support to effectively harmonise prices right across one island very clearly given before Customs & Excise would consider this as an option.

  68.  And then have Customs' posts between Northern Ireland and Scotland?
  (Mr Holloway)  Well, I think in a strange sort of way, this actually sort of breaks into ground where you have a problem on the west coast of Scotland very close to the problem between the north and the south of Ireland, where you have a rural community on the west coast of Scotland that is suffering from the high price of retail motor fuel products, but what we are talking about here is only Ireland, so I will stay with that. However, if we think of our Customs & Excise addressing this problem, at this precise moment in time they have to cover a 300-mile border, they are not doing it effectively and we have lost a third of the legitimate market since 1994. If they only had to focus on the ports or the pinchpoints, the smuggling of petrol would become impossible because of the Carriage by Sea act and then they would only have to deal with gas oil or diesel which would be very manageable, so we believe that a harmonisation effect of prices, I accept the political distance that has to be covered in order to actually convince those who may be of a mind that it should not occur at this moment in time, but it would stop considerable illegal practices eating into the very nature of the businesses that support Northern Ireland. Northern Ireland is essentially a rural community and most of the service stations that we are talking about are not just a service station, but they act as a shop, they are a bank, they are a meeting point, they provide many other services and although we are not seeing the effect in closures, we believe that some 48 or 50 perhaps of the small sites closed in the whole of last year. You will not see a gathering of momentum of closures for some time because there is this effect of actually living off other legal activities that make up the business because motor fuel is just a part, but over time that will occur and once you have closed a filling station, you have to fill the tanks with concrete slurry or a foam, so you extinguish that service for ever. If that occurs to any great extent in Northern Ireland, it will have a fundamental effect on the rural community. You can similarly go across the border into the Republic and look at what happened some years ago when we had a price differential the other way and for a distance of some ten miles across the Irish border, you would be hard-pushed to find small filling stations other than at the border point because of the things that happened ten or twelve years ago. So we know we are not suggesting something that is easily acceptable here, but we actually promote it as a very practical way of addressing the problem. We are not promoting that it is actually a two-tiered excise duty level within the UK, but it is the same excise duty level and all that we are proposing is that there is a rebate, short-term if it has to be described as such, to address a problem where a part of the UK has the only land border with another European Community country.

  69.  I am sure our Clerk has heard what you have had to say and you would be very interested to know if our Ulster Unionist Members would feel able to support such propositions. I suppose if they did, it would go a long way to solving your problem, but I would be not surprised if they felt unable so to do.


  70.  With spectacular serendipity, you have pre-empted certain questions I was going to ask, although I will suggest that we follow up afterwards in writing in the context of any questions that Mr Murray suggested you would have extra evidence on than he could have in case there is anything you want to add. I do have one question with which to conclude. Which Ministers in the Northern Ireland Office and in the Treasury declined to see you?
  (Mr Holloway)  In the case of the Treasury, we were regularly refused access by Dawn Primarolo and indeed only gained access by going and standing in the lobby of the Treasury until we saw her personal clerk. Adam Ingram refused access and indeed Mo Mowlam refused access to the Petrol Retailers Association, and Paul Murphy. We saw Annabel Jones at the Northern Ireland Office only after months of sustained effort.
  (Mr Murphy)  Mo Mowlam saw fit to meet the National Federation of Newsagents in Northern Ireland, but she did not see fit to meet us—are we deemed a smaller problem?

Chairman:  Thank you most warmly. I am conscious, as I said to Mr Murray, that this has not been the easiest day to have such a session and we very much appreciate your having come and the evidence you have given us. Thank you very much indeed.

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