Excise Duties (Personal Reliefs) (Revocation) Order 2002

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Angela Eagle (Wallasey): Although we have abolished limits, will the Minister admit that part of the confusion of many of our constituents who have experienced incidents at customs when returning from shopping is that there are no limits? The subjective nature regarding the amounts that are allowed to be brought in for personal use throws many people. I understand how important it is to prevent smuggling and my hon. Friend is right to try to crack down on it. However, constituents who have had cars confiscated when they have not been far over what I would regard as a personal limit have come to see me; they have suffered a huge trauma. Should not we try to establish limits so that people know exactly where they stand, given that the context of personal use is so subjective?

John Healey: In a sense, the world was much simpler and easier before 1993 and the single market. Let me make it clear that those are not limits; they are guideline levels, and as such they are only part of what Customs officers must take into account when making judgments about explanations for the amounts that a person is bringing into the country.

In a sense, my hon. Friend makes my argument for me. She is right to point out that, in some ways, a realignment of the indicative levels was long overdue. We could not consider reducing those levels because 800 cigarettes and 1 kg of hand-rolling tobacco was the minimum level specified in European legislation, below which we could not go. However, a heavy smoker might get through 800 cigarettes in three weeks. In a way, I am reinforcing my hon. Friend's point.

Let us compare those figures to the indicative levels for alcohol. In the case of wine, for instance, even a heavy drinker would be hard pushed to get through 90 litres—maybe more—in less than three months.

Mr. Stephen O'Brien (Eddisbury): Try me.

John Healey: It is interesting to reflect that if the hon. Gentleman or I, using our rights under the legislation in the single market, brought back the amount of alcohol mentioned as the guideline level, we

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would have to consume 90 units of alcohol each week for six months to use up our entitlement.

In my judgment, there was a misalignment between the minimum indicative level for tobacco and that for alcohol. That made matters difficult for travellers and Customs officers. The changes make the starting point much clearer. Frankly, the new guideline level—3,200 cigarettes or 3 kg of hand-rolling tobacco—is enough to keep the average smoker in fags for at least six months, even if he or she rolls fags from a pouch of tobacco. I think that the guidance level is a pretty good starting point.

I stress that a Customs officer will not simply consider how much a passenger or traveller is bringing back into the country to make a judgment. Several other factors will come into account, such as how often the person travels.

Clive Efford (Eltham): My constituency is in south-east London, so it might have more regular travellers across the channel than those further from the channel ports. I cannot help but think that one of the reasons why we are discussing such an order is the draconian way that Customs officers have applied the regulations. Does my hon. Friend intend to review the guidance that is given to Customs officers on how to determine whether a regular traveller is obtaining goods for their own consumption? Someone might be known to have travelled three months ago, and to have done so again three months previous to that. However, no account is taken of the fact that they enjoy travelling across the channel and having a meal in France, some of the cost of which they offset by buying cheap fags and booze while they are there.

John Healey: I understand the point my hon. Friend makes, particularly in the light of many high-profile incidents. Many hon. Members from both sides of the House have raised cases with me. I should make two points. First, the operational guidance to which customs officers work is kept constantly under review. Secondly, the guidance was revised immediately after the Hoverspeed judgment on 31 July in order to take account of its findings.

I do not accept the description of customs' draconian enforcement of the regulations. There will always be cases—particularly in law enforcement, which is an extremely difficult job, and which often has to be done in difficult circumstances—in which customs officers get it wrong or handle a situation inappropriately. In the two years since we launched the anti-smuggling strategy, 75 per cent. of the people from whom we have seized goods have not questioned or challenged that decision. Those who wish to challenge decisions can do so through the courts, through internal procedures and through tribunals. When customs officers' decisions have been challenged, they have been overturned by the courts in only 0.1 per cent. of cases, and overturned by the internal customs review process of the tribunal judgments in only 1 per cent. of cases. Those figures suggest that in the overwhelming majority of cases—and often in very difficult circumstances—customs officers make the right judgments.

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Mr. David Wilshire (Spelthorne): There is another issue with regard to Customs and Excise. I acknowledge that it is often dangerous to rely on anecdotes of experiences, but this problem partly arises from the overly officious way in which some customs officers set about their tasks. Much of the public concern does not arise from the quantities of alcohol and tobacco; it arises from the way that people are treated. I can recount one experience to support that point: I was deeply offended by somebody who was grossly offensive to me before we even started on the business of what I had in the vehicle—which was six bottles of wine and no tobacco. I wish the Minister to consider whether giving better advice to customs officers to treat fellow citizens as responsible human beings until they have evidence to the contrary might be a better way of reducing the number of complaints.

John Healey: I regret that the hon. Gentleman had that experience. We are dealing with this matter in three ways, each of which I covered in my announcement of 29 October: first, by the operational guidance that we give to officers; secondly, by the updated, new and clear information that we have prepared and is now available to travellers—we make it available through customs, and many travel operators also make it available; thirdly, the system for people to complain, challenge or appeal against the decisions that customs officers make and the way that they make them has been in place for a long time and it could be streamlined.

The package of new measures that I announced as the second stage of our strategy to combat tobacco smuggling on 29 October included a review of the complaints and appeals system for customs that will be undertaken jointly by customs and the Lord Chancellor's Department. They are charged to report to me early in the new year with suggestions for streamlining and simplifying the system to make it easier for those who want to take advantage of their rights to challenge what customs do.

Mr. Wilshire: When the Minister considers that review, he might wish to think about following the example of the police by putting an identification number on the shoulder of every customs officer so that one knows who to make a complaint about.

John Healey: I shall take that point into account when I consider whether to make reforms to the procedure for dealing with complaints from the public.

I now return to the points that I thought it would be appropriate to put before the Committee; usefully, they cover a large part of the territory under discussion. I wish to remind the Committee of a point that came through in the previous exchange: the impact of the problem of bootlegging smuggled alcohol and tobacco is not confined to south-east England, because it undercuts honest retailers throughout the country. They lose direct sales of tobacco, and they also lose indirect sales of other products to people who no longer come into their shops, garages, pubs and clubs to purchase tobacco. A recent report suggested that the average cost of that to small shops was £36,000 a year. Many such shops have been driven out of business by the activities of smugglers.

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The situation was so serious that, in March 2000, the Chancellor launched the anti-smuggling strategy. That strategy has led to there being nearly 1,000 extra customs staff, who are stationed at key ports and are also operational inland. It has led to the installation of new high-tech equipment and a national network of X-ray scanners—to detect, in particular, high-volume smuggled freight tobacco. It has led to tougher sanctions and penalties, including the seizing of vehicles. It has also led to the introduction of fiscal marks to help to identify those cigarettes on which duty has been paid and those on which it has not. It had been forecast that, unless such actions were taken, the black market for tobacco would now account for one third of the total market. Customs officers have been bringing the situation under control and reversing the growth in smuggling. Next week, alongside the pre-budget statement, I shall be publishing the latest figures on the impact of our strategy.

Norman Lamb: In the Minister's announcement at the end of October he suggested that smuggling of these products had dropped by 75 per cent. Does he stand by that figure?

John Healey: We published that figure so naturally I stand by it. The drop was the result of the impact of the tobacco strategy on the cross-channel component of the problem of smuggled and bootleg tobacco. The cut in the first year was 75 per cent., which is a dramatic indication of success. Alongside that significant cut in smuggled goods, there has been, during the couple of years since we launched the strategy, a growth of nearly half—48 per cent.—in consumer spending in cross-channel shopping. It is worth dwelling for a moment on that juxtaposition of smuggling and shopping. It offers strong evidence that crooks and not consumers have been the target of customs officers' activities. A total of 14 million people cross the channel each year. Of those people, nearly 99.9 per cent. pass through customs without a problem. Only a very small minority of people are stopped, and the stops often last only a few moments because, in response to questions from customs officers, any grounds for concern are allayed. The fact that we seize tobacco and alcohol from around 14,000 people a year puts our operations into perspective—there are 14 million cross-channel travellers each year and 14,000 seizures.

Customs officers have a tough job in difficult circumstances. Worryingly, smugglers have become more and more sophisticated and clever at posing as honest shoppers and blending in with the 14 million. That is why it has been important to build on the success of the first stage of our strategy and to refine what we do; that is what I did in my announcement of 29 October.

I want to go into some of the details of the legislation before us.

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Prepared 21 November 2002