Examination of Witnesses (Question 340-359)
MR KEVIN
FRANKLIN, MR
MARK FUCHTER,
MR DAVID
GREEN QC, MR
DAVID RICHARDSON
AND MS
HELEN WOLKIND
25 MAY 2006
Q340 Chairman: Thank you very much and
thank you for your written submission. This is the first time
that your organisations have given evidence to the Quadripartite
Committee and, as you know, the issues we are particularly interested
in are staffing within Revenue and Customs, the priority given
to strategic export controls and what is happening in relation
to prosecutions and enforcement. Can I start by asking how many
officials in both Revenue and Customs and the Prosecution Office
deal exclusively with strategic export controls, both nationally
and regionally?
Mr Fuchter: If I can take that
first of all from Revenue and Customs' point of view. The vast
majority of our staff are actually multi-functional. Multi-functional
means that they might work in one discrete area, for example,
cargo examination, but they will undertake cargo examinations
for a multitude of reasons, a multitude of risks, it could be
drugs, tobacco or whatever but, if I may cut to the chase and
take my steer from previous debates in this Committee, if we add
up across all the various activities in Revenue and Customs that
contribute to our role in strategic export controls, it is something
between, say, 60 and 100 full-time equivalent staff in any one
year, but it will fluctuate—
Q341 Chairman: Can you repeat the
figure again?
Mr Fuchter: Between 60 and 100.
Q342 Chairman: 60 and 100 full-time
equivalents?
Mr Fuchter: Full-time equivalents,
across a number of our directorates.
Q343 Chairman: Thank you, that is
very helpful. I tabled the parliamentary question and I could
not get an answer at all, you probably noticed?
Mr Fuchter: Yes. We have obviously
thought further.
Q344 Chairman: Thank you. Somewhere
between 60 and 100 full-time equivalents will be essentially the
staffing input to—
Mr Fuchter: That is in the spirit
of being helpful. I cannot give you to decimal points because
it is fingers, toes, arms and legs, but it will be within that
range.
Q345 Chairman: I am very grateful,
you are being helpful, I am not even concerned about to the nearest
10, but at least we have an order of magnitude; seriously, that
is very helpful.
Mr Franklin: I wonder if it is
worth adding to that, Chairman. Although that is the core group
that specialise in strategic exports, because of the nature and
the way in which we pull our workforce together, we can actually
deploy much higher numbers at very short notice and indeed recently
we have been redeploying people to stem the threat of Avian Flu
and at a moment's notice we were able to redeploy over 200 officers.
The reason why we set our workforce in a flexible mobile context
is to enable us to be as agile as possible.
Q346 Chairman: We do appreciate that
and we are very grateful for that information. Can I ask just
one further question on this? The Export Control Act 2002, the
Bill had a regulatory impact assessment related to it as legislation
always does and it was estimated then that Customs needed an extra
£200,000 to £300,000 to implement that legislation;
could you give us an idea of how that figure was arrived at?
Mr Fuchter: I would be struggling
to do so, but it was based on an assessment which I think was
made in the mid nineties, which was well before my time, that
we would need up to five extra specialist investigators with all
the various on-costs, so I think that was the basis of the figure.
Q347 Chairman: Five extra investigators?
Mr Fuchter: Yes, and they could
be investigation or intelligence officers.
Q348 Chairman: And that was all that
was thought necessary to implement the additional—
Mr Fuchter: Yes it was, that was
the estimate at the time.
Q349 Chairman: Has that turned out
to be an accurate estimate?
Mr Fuchter: In fact, I think it
is fair to say, that in the two years that the controls have been
in place we have been able to deal with the work that has arisen
within the existing resource allocation, so we have not increased
our baselines by the amount originally envisaged in the RIA, we
have not needed to.
Q350 Sir John Stanley: This continues
the question in relation to your staffing. As I am sure you may
have seen in the evidence session that we had on April 19, we
were told about an interesting, unintended I am sure, side effect
of the impact of setting targets to process work and we were told
that as far as the DTI was concerned their target was to turn
around licensing applications in 21 working days in 70% of cases
and I am sure an unintended consequence of saying that to staff
is that when they get overwhelmed with work, given one of the
rules of the game is that if you send the work back to the person
trying to do the export the clock is stopped as far as the 21
days is concerned, there is a great temptation for the licence
application to go back with lots of possibly unnecessary and irrelevant
questions to have the effect of stopping the clock and so no one
is embarrassed about not meeting the 70% target. I would just
like to ask you whether you have, in this particular area in HMRC,
whether you have any similar types of targets and whether that
might be having the same unintended consequences of actually producing
a stimulus to delay activity rather than to increase it?
Mr Fuchter: Yes, certainly. The
target that I can immediately think of is one to do with the turn
round times of our cargo processing activity and I think we have—I
may be wrong here—but I think it is around two hours for
a routine transaction, but let me—
Q351 Sir John Stanley: I am sorry,
a what transaction?
Mr Fuchter: A routine cargo transaction
but, bear in mind, a lot of the process is automated, so if there
is a documentary check officers are expected to deal with it immediately
and if it is straightforward to have dealt with it in order to
meet our (where we used to call them charter standard) targets
but let me answer the question that that has no effect on this
area of our export responsibilities in terms of strategic exports,
there are no targets that any part of the organisation has, as
far as I am concerned, that deflects us from our main objective.
Q352 Sir John Stanley: There is no
stopping the clock rule, you are satisfied that there are no searches
and written procedures resulting in officials refusing to process,
extending it back for further questions with the primary purpose
of stopping the clock and making certain that the target that
has been set, whether two hours or whatever it is, has not been
jeopardised?
Mr Fuchter: I am aware that that
activity is going on all the time but for reasons of checking
and scrutiny rather than artificially stopping the clock.
Sir John Stanley: Thank you for your
assurance.
Q353 Mr Hoyle: Can I just move you
on to outreach? Obviously I understand that you have been involved
with the DTI, but I wonder if you could tell us what activities
HM Revenue and Customs has actually undertaken in the last five
years, what you have been involved in and I wonder what is planned
for the next couple of years in the case of outreach?
Mr Fuchter: Certainly. If I take
the planning first; the planning is very much driven by the Foreign
Office and the Ministry of Defence and every year they come to
us before the new year and let us know their planning intentions
for the coming year, so I would have to answer the question by
saying basically we start off from an assumption of supporting
that outreach. To go back to the earlier part of your question,
I think if we can run back over the last five years, I guess there
are three types of activity: overseas outreach, where we will
accompany delegations headed by Foreign Office and/or MoD and
alongside DTI colleagues, and possibly others, as part of a delegation
to various countries. Those countries are chosen, as you know,
by those departments who ask us to come along to deliver, it can
vary what they ask us to deliver, but it is in the area of making
an assessment of that country's enforcement capability and export
controls, probably their Customs' capability, but it might be
looking more widely, it might be collaborating with DTI to look
at the whole end-to-end licensing and enforcement process and
to identify capacity building needs for that country. We have
been to a number of EU accession countries, going back a couple
of years, some trans-shipment locations, such as UAE, Singapore
and Hong Kong and others, including Libya and Republic of South
Africa and China. The second phase is inward outreach where such
states send delegations to the UK hosted by the Foreign Office
or the Department of Trade and Industry and typically we will
attend to give presentations on our approach to export controls,
what we regard as good practice, tips and techniques. Examples
there include the Ukraine, Serbia and Montenegro, Albania, Pakistan
and Turkey, but we are really driven by the needs as established
by the Foreign Office and the lead policy departments. That did
include last year in our current building we hosted a one week
training seminar for Libyan export control officials. The third
element is, I guess, our contribution to the four international
export control regimes which include elements of outreach where
we are often asked, for example, diplomats will say to us, "We
have identified some of the parties' enforcement officers attending
the enforcement experts' meeting, they could do with particular
reinforcement in certain aspects and can you please help out?"
and that is the sort of thing we do.
Q354 Mr Hoyle: So you continue to
establish in third countries in this way, so that is going to
be part of the future programme?
Mr Fuchter: That continues to
be part of our future programme, we look to support it, as I said,
we have an assumption of supporting this process.
Q355 Mr Hoyle: Do you think outreach
should form part of the core functions in UK licensing and enforcement
officers?
Mr Fuchter: We regard the activity
as very important and I think it is probably indispensable, because
we also do outreach customs-to-customs on other topics. Arguably
with all our interest in trying to improve the security of the
supply chain, I think we regard that as an essential component
of it.
Q356 Mr Hoyle: Are you winning the
battle in the securities of the supply chain?
Mr Fuchter: Are we winning the
battle? I am not sure I know the answer to that. We are committed
to winning the battle, we have got a lot further to do, I think,
but it is not a static position.
Mr Franklin: I think we are winning
battles. I think the question I would ask is are we winning the
war and there I think there can be less certainty about the answer?
Certainly if you expand upon some of the things that Mr Fuchter
has already mentioned, we are working very closely with the World
Customs Organisations on this as well and we have just signed
up to a framework of standards around security and trade facilitation
which has helped to cement the work we are doing on the supply
chain and we are engaged with some 50 odd projects at the moment
in terms of capacity building that is essential in our drive to
win these battles on security issues.
Q357 Richard Burden: On 19 April
the defence manufacturers came to see us, as you probably know,
and one of the things that they talked about was the specific
example of Felixstowe where they were saying that 50,000 containers
go through that port each day and Customs probably open just one
and they said that that one would probably be opened because somebody's
tracker was in a container that was being tracked and they open
the container and there are four or five stolen cars in it. Would
that be an accurate picture of the situation at Felixstowe would
you say?
Mr Fuchter: To start with I would
have to say "no". Firstly, I think we do not recognise
those numbers of containers going through Felixstowe. We think
there is something around 3,500 TEUs, and I am sorry, this is
a 20 foot equivalent unit; Felixstowe calculates its container
movements on what they call TEUs, so a 40 foot container would
be two TEUs, I am sorry for that diversion. I think the numbers
of containers being exported from Felixstowe, and I think that
is the ones we have to concentrate here, are far fewer. Of those
we will—
Q358 Richard Burden: Roughly, in
layman's language?
Mr Franklin: In layman's language
8,000 containers a day. 3,500 would be for export.
Q359 Richard Burden: So the others
would be coming in?
Mr Fuchter: Yes, and that will
include empties.
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