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Sir Robert Smith (West Aberdeenshire and Kincardine): Does the hon. Gentleman think that although the declared intention behind increasing those duties may have been based on health or environmental factors, the Treasury had its eye on the fact that it could make much more money by increasing them?

Mr. Swinney: That logic is absolutely irrefutable in relation to the road fuel duty increases that I have had to watch being approved by the House in my three years as a Member.

Specific tobacco or alcohol duty increases may have a particular purpose other than to stymie increased smuggling or to extend the price differentials between the United Kingdom and our European partners, while sending a message to people in our community that excessive drinking and smoking may not be good for them. There has been some confusion in the debate about the ideal level for excise duties and about how to deal with smuggling.

We have had some interesting exchanges on what could be done to reduce smuggling, and the hon. Member for Workington (Mr. Campbell-Savours) made a particularly lively comment on the number of scanners that could be used. However, in dealing with smuggling the starting point must be the maintenance of an effective Customs and Excise network properly to protect the access points to the markets in our community. As those of us who are familiar with the changes made by the previous Conservative Government will know, Conservative Members left the Customs and Excise network in tatters. I support this Government's attempts to try to restore some of that network, but I am sceptical that their action will be sufficient to tackle the problem.

Today, Conservative Front Benchers have dealt with the matter of alcohol sales to minors as though the problem has been caused only by smuggling. In fact, the cause of the problem goes much wider than smuggling. Our community's regulatory and legal systems must enable us to protect minors from gaining access to alcohol and tobacco products.

We have to ask ourselves two fundamental questions on the issue of excise duty. First, are we entitled to maintain duty differentials between this country and our European partners? I think that, unless we are all signed up to tax harmonisation--which I am not--we are entitled to maintain the differentials. Secondly, do we expect excise duties and the way in which they are determined to have a credible effect on the purchasing patterns of individuals in our society? I have been dismissive of the impact of road fuel duty on the fuel purchasing patterns of my constituents, who live in a rural area, because I do not believe that they have an alternative to using

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their cars. However, I am fairly confident that excise duties could affect people's patterns of purchasing tobacco and alcohol products.

The core of the fair parts of the amendments tabled by Conservative Members--and of the comments made by the hon. Member for West Worcestershire (Sir M. Spicer), who made a compelling case--dealt with why the Taylor report should be put into the public domain. Today, we shall have to hear from Ministers a new, different and very credible explanation of why that report has not been made public. If publicly commissioned and funded documents are not to be made public as we enter the freedom of information age, I wonder what on earth that freedom of information age is all about. What is the new age about if not to provide us with an opportunity to examine the issues?

The heart of the freedom of information issue is whether the House will be able to have reasoned and measured debates that are based on evidence. We have to keep a very keen eye on the issue. If the Committee or the House refuses to look the evidence straight in the face, we shall not be serving the public particularly effectively. The Conservatives have not proved that there is an inextricable link between smuggling and levels of excise duty, but I should like more evidence to be in the public domain so that we can arrive at a proper judgment.

Mr. Timms: We have had an interesting discussion on the amendments. I shall briefly explain to the right hon. Member for Wells (Mr. Heathcoat-Amory) and the hon. Member for West Worcestershire (Sir M. Spicer) why the figure of 3.4 per cent. was used for revalorising excise duties this year. Every year since the general election, we have revalorised duties by the expected increase in the all-items retail prices index over the 12 months from the September before the Budget. Since the general election in May 1997, the forecasts have been lower than the outturn, so the duty increases have been less than they would have been if we had used the actual inflation figure. Last year, inflation increases in excise duties were 1.3 per cent., whereas this year they are 3.4 per cent. It is swings and roundabouts. The hon. Member for West Worcestershire referred to RPIX and the 2.5 per cent. target, but it is the all-items RPI figure that is used for revalorisation, not the figure excluding mortgage payments. That accounts for some of the difference. I do not recall any complaints from Opposition Members last year at the small inflation increases in excise duties and there should not be any about the 3.4 per cent. increase this year.

Mr. Howard Flight (Arundel and South Downs): Will the Minister confirm that the Government moved to using the forecast because they had two increases in fuel duty in one year? Otherwise, they could have continued with past practice of using the same inflation index for taxes and allowances.

Mr. Timms: That was not the reason. The reason was the timing of the changes. The decisions are now made at a different time of year.

In 1998, the Government published the alcohol, tobacco and fraud review that we had commissioned. It examined fraud and smuggling in some detail, particularly issues relating to alcohol. That resulted in 90 recommendations to help stem and reduce levels of illegal activity. Customs

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was allocated £44 million for the period to 31 March 2002 to take forward the key recommendations. It has been acknowledged in the debate that we have implemented the main recommendations. Customs continues to work closely with the trade on those that remain.

Smuggling is a serious threat to our health and revenue objectives, but we have made it clear that we are not going to allow criminals to dictate our agenda or influence the levels of our duties. Following the 1999 Budget and the sharp rise in tobacco smuggling, my right hon. Friend the Chancellor appointed Martin Taylor to conduct an independent evaluation of tobacco smuggling last summer. His conclusions formed part of the new anti-smuggling strategy described in the Government paper, "Tackling Tobacco Smuggling", published on 22 March.

Mr. Letwin: Will the Financial Secretary now commit the Government to publishing the Taylor report?

Mr. Timms: There has been some discussion of that point during the debate. I was particularly interested in what the hon. Member for West Worcestershire said, but he was mistaken. My right hon. Friend wrote to the Chairman of the Treasury Committee on 26 January, saying:


My hon. Friend the Member for Workington (Mr. Campbell-Savours) was right on that point. I would have thought that the Conservatives would have been aware of that letter.

7.15 pm

Mr. Heathcoat-Amory: That is why I asked the Chancellor if he would place a copy of the report in the Library, with excisions of matters of operational sensitivity to Her Majesty's Customs and Excise. We fully understand that any matters of national importance to do with the intelligence services should be excised. The reply made no reference to that point, saying simply that Martin Taylor's advice to the Chancellor was personal and confidential.

Mr. Timms: I am glad that the right hon. Gentleman was aware of that; his hon. Friend the Member for West Worcestershire appeared not to be. The important point is that the recommendations on tackling smuggling were published in "Tackling Tobacco Smuggling" and have been fully implemented by the Government.

Mr. Letwin: Will the Minister now commit the Government to publishing the Taylor report with all operationally sensitive elements excised, and if not, why not?

Mr. Timms: My right hon. Friend's letter makes it clear why that would not be sensible. We have published the recommendations and are implementing them, as well as putting around 1,000 extra officers into tackling the problem, reversing the cuts in Customs under the previous Government. Our aim is to put cigarette smuggling into decline within three years. The additional staff dedicated to combating smuggling in the tourist lanes at the channel ports will yield important dividends in the fight against

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alcohol smuggling as well, which featured particularly in the contribution of the hon. Member for Bury St. Edmunds (Mr. Ruffley).

My hon. Friend the Member for Workington rightly put great emphasis on the importance of scanners and asked me to comment on the issue, which I am pleased to be able to do. He is right about the significance of what we have done. We have committed £44 million to the purchase of a national network of scanners. There will be at least a dozen. All the main freight ports will be covered. Some of the scanners will be mobile so that we can move them to where the risk is highest. He would not expect me to say precisely where they will all be, for obvious reasons, but the first scanners will be in operation before the end of this calendar year and the remainder will be introduced during the next calendar year, so we are moving rapidly.


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