Memorandum submitted by the Public and Commercial Services Union (PCS) (CUS 1)
INTRODUCTION
1. The Public and Commercial Services Union (PCS) is the recognised trade union that represents the large majority of staff, in all grades/paybands, including the Senior Civil Service (SCS), and all businesses and support services, within HM Customs & Excise. In Scotland, PCS represents approximately 90 per cent of staff within HM Customs & Excise.
2. This submission has been compiled by the Customs & Excise Group of PCS as a constructive contribution towards the discussions and considerations by members of the Scottish Affairs Committee as they undertake their inquiry into aspects of Customs & Excise services in Scotland, particularly, the deployment of front-line resources to combat revenue evasion and smuggling.
3. This submission seeks to identify where additional investment by the Government will make a real impact in combating revenue evasion and smuggling in Scotland. In the submission, our focus will be on the following areas:
— Revenue evasion caused by smuggling of tobacco, alcohol and oils.
— Continuing efforts in the war on hard drugs.
— Resourcing in Scotland and staff morale.
REVENUE EVASION CAUSED BY SMUGGLING OF TOBACCO, ALCOHOL AND OILS
4. The decision made by the Government in 2000 to launch its tobacco strategy, providing the means (additional staffing, x-ray scanners and legislative change) by which Customs & Excise were able to combat tobacco smuggling was welcomed by PCS and its members. The combination of our members' support & enthusiasm and the extra resources has made a success of the strategy. However, the work of that strategy is not yet complete; it is our strongly held view that the current level of Government commitment to combating tobacco smuggling needs to be maintained in Scotland over the next few years.
5. A recent National Audit Office report (February 2002) estimated that £7.3 billion was being lost to the Exchequer each year due to smuggling and VAT evasion. This equates to £730 million a year less spent in Scotland on public services. The NAO said that the lost cash equates to around 3p on basic income tax, or a loss of £300 a year for every household in the country.
6. In a recent debate in the Scottish Parliament on tax stamping, two MSPs pointed out that, in their view, there was a correlation between the level of the problem of bootlegging in Scotland and the cuts in the resources provided by Customs & Excise in recent years.
7. PCS has also argued, for a number of years, that the Government should, in parallel with the Department's tobacco strategy, support the development of an oils strategy. In recent years, the problem of oils smuggling has changed dramatically from being one that was concentrated mainly in Northern Ireland to an issue affecting large areas of the UK as a whole, particularly prevalent in Scotland and Northern England. Additional customs officers are urgently required to clamp down on this illegal activity.
8. The revelations in the recent Roques report about the massive extent of fraud involving alcoholic spirits did not come as a great surprise to many within Customs & Excise as the PCS has consistently warned of the likely consequences of relaxing local physical controls on large-scale distributors of such spirits. The Department has taken action to deal with this problem but, regrettably and, in our view, unhelpfully, no new resources have been created. As elsewhere, the changes have been resourced from "within existing staffing levels". The view of PCS is that, again, additional resources represent the only realistic way to combat this particular excise fraud.
CONTINUING EFFORTS IN THE WAR ON HARD DRUGS
9. Despite the growing number of seizures by Customs & Excise and the use of more sophisticated intelligence and risk profiling techniques, reference to the street prices of hard drugs indicates that there appear to be increasing amounts of Class A drugs reaching the streets.
10. Scotland has a drug user population of almost 56,000, with Glasgow's heroin addict population standing at more than 15,000. The cost to society of this level of addiction is huge; in Glasgow alone these addicts commit 2.6 million criminal offences a year, accounting for £535 million of costs to society. Reliable estimates point up that, across the UK, up to 90 per cent of all crime is drug related. The problem is also starting to affect ever-younger members of society:- by age 15, 41 per cent of boys and 38 per cent of girls in Scotland have used drugs. In addition, cocaine use in Scotland has shot up from use amongst 39 per cent of drug users in 1999 to 63 per cent in 2001.
11. In order to meet the outcomes required from the Public Services Agreement (PSA) with the Government on Class A drugs, Customs & Excise is shifting more resources into the larger ports and airports and creating more flexible and mobile brigades of customs officers. In the considered view of PCS, whilst we have no opposition in principle to these developments, there are flaws in the new strategy, particularly from a Scottish context. Even vaster stretches of coastlines with more and more small ports & airports are becoming vulnerable to the resourcefulness of the drugs smugglers. The absence of a permanent Customs & Excise presence in many locations is undoubtedly creating more opportunities for the smugglers.
RESOURCING IN SCOTLAND AND STAFF MORALE
12. In 2001, Customs & Excise was, by and large, reorganised into two main operational businesses, Business Services and Taxes (dealing with VAT, Excise and International Trade) and Law Enforcement (dealing with Detection, Intelligence and Investigation). As a result of this reorganisation, it is difficult to make exact comparisons between past and present deployment of resources in various parts of the country; however, in Scotland, it is true to say that most staff are now concentrated in the Central Belt and there have been some overall decreases in total numbers. Additionally, the geography of Scotland presents particular problems, as there are many many miles of coastline with little or no Customs protection.
13. There was a Customs & Excise presence in every major town and city in Scotland. Many offices have now been closed to the public and enquiry points have been replaced by the more impersonal National VAT and Excise Advice Service. In addition, staff from more remote locations are now being drawn into the Central Belt to provide cover at Edinburgh and Glasgow airports. There have also been recent instances where staff have been deployed to northern England and Northern Ireland to support other operational priorities consequentially reducing the available customs officers in Scotland even further.
14. PCS is concerned that large areas of Scotland are being left without cover to prevent or deter the smuggling of alcohol and tobacco in particular. In many towns in Scotland these items are now blatantly and openly on general public sale.
15. Airports are not necessarily staffed on a 24-hour basis. Staffing is provided on the basis of assessed risks based on a worked up model and seizures of prohibited items are carried out on the basis of intelligence provided. This process has been further exacerbated by recent reductions in the resource for the Intelligence teams in Dundee, Aberdeen and Inverness.
16. The transfer of the work, previously undertaken at the Glasgow Collection Coordination Unit (CCU), which will be completed in May 2002, was part of a particular project emanating from the 1999 Departmental Modernisation Programme, which was consequently taken forward under the most recent Reorganisation of the Department. A decision was taken to centralise the work of all 14 CCUs, including that in Glasgow, into one site, equipped with the most modern telecommunications and IT equipment, so that all Customs Officers in the field had the most immediate, effective access to relevant information, support and intelligence.
17. In part as a consequence of consultation with PCS, the Department agreed to site the new National Coordination Unit (NCU) in Ipswich, an area with some of the most intractable HR difficulties stemming from Departmental Reorganisation. Whilst the project did not result in any overall losses of posts, continuing joint efforts will be required to find suitable alternative posts and/or new work for a number of members previously employed at the Glasgow CCU.
18. PCS is satisfied that the decision to centralise CCU work into the Ipswich NCU was based on maximising the health and safety of our members in the field and putting HM Customs and Excise at the cutting edge of Intelligence technology. However, a priority for PCS will be the provision of suitable personnel arrangements for all members displaced by this specific centralisation.
19. On the other hand, however, PCS does not believe that its members on operational front-line duties in Scotland are well served by having to rely on a Dog Service where the nearest dog and handler are based in Hull. We know that the Department recognises the important role that the Dog Service plays in its Detection activities but, in the view of PCS, it has been required, because of restrictions on its allocated resources, to cut back on those activities, to the particular detriment of Scotland.
20. A new daily ferry service from Rosyth to Zeebrugge is about to commence operating. This activity will become the largest risk area, from the point of view of HM Customs & Excise, in Scotland, but will be staffed from within existing resources. Ferries operating from Zeebrugge to elsewhere in the UK have already proven to generate a high degree of smuggling activity. There is no reason to think that the direct service to Scotland will be any different. No additional resources have been allocated by HM Customs & Excise to address this increased risk whereas Fife Constabulary have received additional resources to establish a port police force.
CONCLUSION
21. This submission has attempted to bring to the attention of members of the Scottish Affairs Committee the problems facing the Government and the people of Scotland due to the impact of smuggling activity. PCS represents many hard-working and committed members in Scotland, without whose efforts and endeavours the situation would be incomparably worse, but the continuing incremental decreases in resources combined with the escalating scale of the problems means that we are facing an uphill task, with ever-increasing gradients, to counter the illegal activities.
22. The Customs & Excise Group of PCS fully recognises that any requests for additional resources to the Treasury will always be subject to a very high level of scrutiny, and rightly so. However, from feedback and information supplied by our members, the gaps in controls that have been identified in this submission and elsewhere could be plugged by only 500 additional customs officers, dedicated to the prevention of passage of hard drugs, illegal alcohol, tobacco and oils products into the UK.
23. In return for such an investment of extra staff in Customs & Excise in Scotland as we have outlined, the Government could expect dramatic increases in the yields of VAT and excise duties, further disruption of the affairs of smuggling gangs and better protection for society.
24. PCS trusts that members of the Scottish Affairs Committee will share these concerns and use their good offices to support our arguments for additional Customs & Excise staffing levels in Scotland.
March 2002
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