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Sir Michael Spicer: My right hon. Friend makes an interesting point. The report on Customs and Excise gives an example of another Government report that has been kept secret and unpublished, and specifically refers to the context that my right hon. Friend described. The reports states:
Sir Michael Spicer: Because that is the clear implication. The report simply considered whether the Customs and Excise service could be made more efficient, perhaps by amalgamating it. No one has ever told the Select Committee that security or intelligence matters were involved. If that had been said, we could have considered it. My right hon. Friend the Member for Bromley and Chislehurst (Mr. Forth) is right to say that, despite the hoo-hah and hot air that surrounds the Freedom of Information Bill, six-years-old papers of no party political import are suppressed. Those papers were drafted by the previous Administration, and the Government probably believe that they reached the wrong conclusions.
Such suppression is wrong and a good reason for accepting amendments Nos. 1 and 2, which are eminently sensible. They are not especially party political and they deal with the extent to which Parliament should be allowed to scrutinise the Executive.
Mr. Michael Fallon (Sevenoaks): Before my hon. Friend leaves the point about whether the Taylor report can be construed as personal, can he explain to the Committee how a report which was commissioned by a Minister who is a public official and which was prepared for a public Department for public policy making, can be described as personal to the Chancellor of the Exchequer?
I want to consider the general thrust of the argument of the hon. Member for Kingston and Surbiton. He said that revenues would increase, and that the revenue take was necessary for all the projects that he wants to implement. He is a big spender and taxer; increasing revenue is therefore a good thing from his point of view. He said that all the Institute for Fiscal Studies reports on alcohol showed that that would happen and that, despite the leakage, the overriding thrust of policy would be to raise revenue.
The Institute for Fiscal Studies is undertaking a similar study on tobacco. Doubtless it will be as easy to pull apart as that on alcohol. The elasticity arguments in the report are highly subjective. No one knows from where they have been plucked. They are not empirically constructed because the IFS does not have the resources for that.
Mr. Edward Davey: The hon. Gentleman criticises the Institute for Fiscal Studies, which is well respected. I did not realise that he believed that it was so bad. It took its data from the family expenditure survey of 1979-96.
Sir Michael Spicer: When making a historical analysis of elasticity, one makes an assumption and includes it in the model that one is constructing. Assumptions based on historical data may not apply to the future. In the Canadian example, the assumptions applied to the future, but in the Swedish example they did not. Elasticity arguments are always subjective.
Mr. Davey: If the hon. Gentleman reads the report, he will find that the research was controlled by, for example, ascertaining whether elasticity in the south-east of England was different from that in the rest of the country. That was achieved by ascertaining whether price elasticity was different before the single market began and after it was established. The elasticity was found to be the same. The hon. Gentleman's argument is therefore not borne out by the facts.
Sir Michael Spicer: The hon. Gentleman is well versed in such matters. I am sure that he will accept that elasticity arguments in such studies, especially when based on historical data, are often highly subjective. That is especially true in the case that we are considering.
In his contribution, the hon. Gentleman claimed that the beneficial--in his view--revenue effect of all the extra dosh and the great expenditure plans, which he will doubtless beat the Labour party to effecting because the Liberal Democrats want to spend even more money than the Labour party, were tremendous and not to be stopped. The only method therefore of dealing with smuggling was by physical means, such as X-ray scanners. The hon. Member for Workington wanted 50 and the Government want 12; doubtless the Liberal Democrats are somewhere in the middle.
The hon. Members for Workington and for Kingston and Surbiton claimed that smuggling would be prevented by physical measures. That would be wonderful if the empirical evidence bore it out. However, in the 1998 pre-Budget report, the Government produced a list of physical measures such as X-ray screening, CAT marks, proposals for licences for pubs and related premises and provisions for punishing retailers for smuggled goods. That list was published in 1998 and repeated in 1999.
The Second Deputy Chairman: Order. We cannot have continual interventions from a sedentary position. If the hon. Member for Bexleyheath and Crayford (Mr. Beard) wants to intervene, I should be grateful if he did it in the conventional way.
Sir Michael Spicer: I shall give way shortly. However, I am trying to make the point--I hope calmly and collectedly--that the physical measures have been introduced and have been used increasingly. However, smuggling has increased much more quickly than the rate of the measures' introduction.
Mr. Beard: The hon. Gentleman claims that the efforts to stem smuggling have been ineffective. However, it was revealed in the Treasury Committee's inquiry into HM Customs and Excise that the previous Administration cut by 300 the number of officers who dealt with smugglers. The previous Administration had given up trying to control smuggling.
Sir Michael Spicer: There is no question but that both Administrations have tried to introduce new methods, methodologies and technologies to customs, but smuggling has increased rapidly even though more and more technology has been put in the system, particularly during the past two years over which, apparently, the Government have increased the physical resources going to Customs and Excise. There has to be at least a question mark over whether reliance on physical constraints and physical investigation as opposed to excise measures will be effective.
Mr. Campbell-Savours: I understand that the hon. Gentleman chaired the Treasury Committee Sub- Committee that considered the issue, so can he give a clear answer to my direct question: do the scanners that we are to buy work?
Sir Michael Spicer: I do not doubt that a scanner will scan effectively and will find--[Interruption.] We must deal with the question whether we will ever have enough scanners and whether the increased traffic--large vans from outside the European Union and the white van trade from inside--will swamp them, as is the case at present. The invasion flood of contraband articles is such that we cannot hope to control it physically. That is the argument. The hon. Gentleman may want more than 50 scanners, and he may have to have 500 or 5 million, but, given the massive differentials in cigarette duty, especially outside the EU, all the experience is that such measures are not effective or are at least questionable.
Mr. Swayne: May I ask my hon. Friend about these scanners? If, as is increasingly the case, young men go to France for an agreeable weekend and buy, ostensibly legitimately, a large number of cigarettes--presumably for their own consumption--and then sell them in pubs in the south-east and parts of rural Hampshire, what will the scanners do to deter such trade? Very little, I suspect.