Examination of Witnesses(Questions 60-79)
MR RICHARD
BROADBENT AND
MR MIKE
WELLS
MONDAY 29 APRIL 2002
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.
Chairman
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.
| 
