Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses(Questions 60-79)



  60. The year before then?
  (Mr Broadbent) Smoking resumed marginally its long-term decline after the year before.

  61. It went upwards.
  (Mr Broadbent) A small blip and then it resumed its slow decline. The figure was 78 billion cigarettes that year but it is the trend you are asking me about, which I agree is the important thing.

  62. What does the law say is the maximum penalty for smuggling goods into this country?
  (Mr Broadbent) For smuggling any goods?

  63. Tobacco without paying duty on it.
  (Mr Wells) The maximum sentence is seven years.

  64. Seven years in gaol?
  (Mr Wells) Yes.

  65. So why then do you have a policy of not prosecuting people for smuggling?
  (Mr Broadbent) We do not have a policy of not prosecuting for smuggling; we have a policy of prosecuting people for smuggling.

  66. It says in the Report: "Customs' disruption policy does not place a premium on the use of prosecution where Customs judge that other methods will be as or more effective in achieving the outcome of reduced overall smuggling."
  (Mr Broadbent) That is correct and our policy is to prosecute where we are not satisfied that disruption will achieve that goal.

  67. Despite the fact that Parliament has given a maximum penalty of seven years for this offence, you have decided without reference to Parliament—and I have not seen a change in this law being proposed—to ignore that and then to have other methods like confiscation of assets and financial measures when we decided in Parliament we wanted custodial sentences. Why do you think that you are right and Parliament is wrong?
  (Mr Broadbent) I hope we have not. Indeed, I would like to think we are doing exactly what Parliament intended. What we are doing with prosecution is precisely what you are suggesting. The custodial penalities for tobacco smuggling are now quite severe. Almost all the prosecution we were doing before did not come anywhere near a custodial sentence, they were a slap on the wrist, a small fine. What we are doing now is resourcing all our prosecutions to make sure that there is a high chance of custodial sentence, confiscation, and indeed the average sentences are going up, the numbers going away for two years or more is going up, and we are probably impacting on the smaller-scale people who were getting a small fine more severely by, instead of taking the prosecution, seizing their vehicles or seizing their goods, which are also powers that Parliament gave us. We are trying to make sure that we use each of these sanctions in a balanced way to achieve a total outcome as opposed to seeing each sanction as an end in itself. I recognise, and it is something we probably debate internally more than anything else, the importance of getting the balance right. We never choose one or the other lightly. It is very important to get a balance and not go blindly for one or the other.

  68. If you are engaging in fewer prosecutions, inevitably the quality will rise and inevitably you will get a higher proportion of successful convictions and a higher proportion of custodial sentences, will you not?
  (Mr Broadbent) I am not sure the last thing follows. We are getting more custodial sentences of over two years in absolute terms as well as percentage terms. It is not the case that if you pursue your policy unchanged and do less of it, you will get more of a certain sort. You do have to drive towards a certain goal. One of the interesting things to me, for example, is that the number of defendants per case are going up. That tells me we are bringing more complex cases, cases where there is some sort of conspiracy or gang involved and therefore they ought to get a custodial sentence. That is increasing the quality of prosecutions. More people are going to prison for tobacco smuggling than a few years ago.

  69. Are not a lot of the problems you are citing about smaller prosecutions not getting custodial sentences caused by the problem with the judiciary that we have generally in this country of not passing custodial sentences for serious offences? Should your policy not be to prosecute everybody who is guilty of an offence that carries a maximum penalty of seven years in gaol? Just as a matter of principle, should you not be prosecuting every offence?
  (Mr Broadbent) At the lower end it is not the judiciary not passing the sentences. It is not evident that for 3,000 or 4,000 smuggled cigarettes it is appropriate to send somebody to prison.

  70. Aside from that, why did you even consider prosecuting somebody for bringing in 3,000 cigarettes? Surely that is enough for people to use?
  (Mr Broadbent) We sometimes seize their cigarettes, we sometimes seize their vehicles.

  71. Why would you seize anybody's 3,000 cigarettes?
  (Mr Broadbent) I agree that 3,000 or 4,000 is very much at the lower end of what we would be looking at.

  72. What would you be looking at?
  (Mr Broadbent) The minimum indicative limit is 800 cigarettes and we would look at anything above that, but we would not look at 805. That is the EU minimum set indicative level.

  73. Do you think that is reasonable?
  (Mr Broadbent) It is set by the EU. It is not for my judgment as to whether it is reasonable or not.

  74. I have had constituents who have been to see me who have had their vehicle seized for bringing in a couple of thousand cigarettes. That does seem to me to be unreasonable given that you are allowed to bring in enough for your own personal consumption.
  (Mr Broadbent) There is very clearly laid out guidance. At the moment the indicative level is 800. Many people pass through our controls who have more than that. Indeed, the majority of the people who are stopped who are above the indicative limits are allowed to proceed with their goods. For those who are smuggling relatively limited numbers of cigarettes (we are talking here about thousands) we do impose sanctions less than prosecution, for example vehicle seizure. I can give you an example. Our average seizure in that circumstance is 7,000 cigarettes, which is clearly well above the indicative limit.


  75. Mr Wells, I feel we should give you an outing. As you are the Director of Law Enforcement perhaps you would like to deal with the point in paragraph 5.36 which was the point raised, quite validly, by Mr Gibb that "Customs" disruption policy does not place a premium on the use of prosecution. Do you want to say a word about that?
  (Mr Wells) As Mr Broadbent has just said, the total number of people going to prison for over 10 years for tobacco smuggling offences is rising. In fact, the percentage of our prosecutions which result in convictions and sentences of over two years has risen substantially from about 2% of prosecutions to over 15% of prosecutions. In terms of the quality of our activity it is very much more focused on the upper end of the smuggling organisations and at the lower end alternative sanctions are being taken, primarily seizure of vehicles, seizure of goods, fines and the like.

  Chairman: Thank you for that. Mr Gerry Steinberg?

Mr Steinberg

  76. As the Chairman said and virtually everybody else has said, we are talking about something like £2.8 billion of revenue lost on cigarette smuggling alone. One in five cigarettes smoked in the UK has been smuggled but I read somewhere else that one in three was smuggled. I do not know where I read that. I read it somewhere recently. These are pretty poor statistics, are they not? I do not think for the first time I blame Customs for this. You seem to praise the Government and say they are doing plenty about it. My view is that they are not doing enough about it. I think they are very complacent about the whole issue. I think it pleased Mr Osborne to hear me say that. For years now we know this has been going on and it is only fairly recently that they have started doing something about it. Again, I do not agree with Nick either because he seems to think that it is a waste of money to pursue these people but if you do not pursue them we are talking about something like £3 billion which is being taken away from the taxpayer, if you like, which could pay for God knows how many new hospitals, how many new nurses, how many more police on the beat that we are always being told we want. In fact, it is a very, very serious problem yet we are told in paragraph 5.4 that the Government will spend £209 million over three years. That seems peanuts to me. I take the totally opposite view from Nick, I think they are not spending enough. I know it is difficult for you to comment and to say whether you think that is enough money from the Government but presumably with a lot more money you would have a lot more success.
  (Mr Broadbent) I think I would say two things. One is to stress a point I have made before, and I do not want to labour it too much, that this is a very complex problem. To know you have got a problem is not always the same as knowing you know how to solve it. Smuggling is a very challenging activity. I have used this phrase before, I look at it as a commercial activity, I recognise it is illegal and cannot be condoned but it is a highly dynamic, highly flexible activity. To know you have got a problem is not always the same thing as knowing what to do about it. Undoubtedly it took a little bit of time to work out what the best way of tackling it was and during that time the problem increased quite significantly. That was probably time we had to take to work out what we would actually do because just standing at the border hoping you are going to catch the lorries coming in is not going to work. The issue of resources is always a complex one but, again, as I look at the organisation at the moment we are pumping these resources into it at a rate which it can cope with and cope with in a way which gives value for money I think. There are issues to do with capacity ultimately when you are changing so many things at once. I do not want to over-stress it, but we are changing the way that almost everybody engaged in this work in the organisation goes about their work. New skills, we have talked about scanners, new skills in investigations where we have tried to do more confiscation, more strategic skills, new intelligence skills. Although, of course, I would love to have more money pressed upon me it is important to get value for money to judge the rate at which you can deploy the resources. Some of my major shortages at the moment are, for example, in trained staff to run scanners or in intelligence staff, they are not so much in the cash in the pocket.

  77. Was my interpretation of the Report correct, it is £209 million over three years?
  (Mr Broadbent) Yes.

  78. So we are talking about £60 million or £70 million a year?
  (Mr Broadbent) Yes, there is a chunk of that for scanners and running costs—

  79. The amount being smuggled in that we are losing is £2.8 billion a year?
  (Mr Broadbent) That is right. We are good value for money.

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2003
Prepared 10 January 2003