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30 Nov 2006 : Column 161WH—continued
“told us that on a number of occasions officers had expected custodial sentences to be passed but suspended sentences were handed down and that sentences in Northern Ireland are lighter than for comparable offences in England and Wales.”
One could argue that the first two were just ordinary members of the public making comment, but one would imagine that officers at HMRC would have some yardstick against which to judge the comments that they made. They say that in England, Wales or Scotland, people would have gone down for a similar offence to one that in Northern Ireland led to people being given non-custodial sentences. The Chief Constable of Northern Ireland
“noted that the level of deterrent in Northern Ireland is often perceived as lower in Northern Ireland than in the rest of the United Kingdom”
because of the weak sentencing policy of the courts. He was one of those who recommended that we do some investigation into comparable sentencing.
Maybe the Minister has had a chance to revise his opinion, but when he gave evidence to the Committee he said that he believed that sentencing was “on a par” with the rest of the United Kingdom. That certainly was not the opinion of the Chief Constable, who is not someone who came up through the ranks of the old Royal Ulster Constabulary and then the PSNI and has no experience outside Northern Ireland. He had considerable experience in the Met before he came to Northern Ireland. The officers of HMRC would certainly have had wider experience, and their view was that sentencing was not on a par.
As a public representative in Northern Ireland, one cannot help but know some of those who are involved in such activity. Many of them walk the streets as if
they own them and feel that they are above the law. Sometime, I think, they take the light sentences as part of the risks of the job. It is important that some cognisance is taken of the Committee’s view. Despite the fact that the Minister said in his response that it is not Government policy to interfere with the operation of the courts, we have precedents in Northern Ireland for giving guidance to courts to impose heavier sentences for certain types of crime. The report pointed that out: with hate crimes, whether they involve religion, sex, colour or whatever, judges are encouraged to and do give heavier sentences. It is important that there should be a similar direction in the cases of those who are involved in organised crime when they use their paramilitary muscle, paramilitary past, paramilitary involvement, paramilitary tactics or paramilitary friends, because allied to that is the culture of intimidation.
The Committee’s next recommendation was for certain legislative change. I listened to the hon. Member for Ealing, North, and I know that he is a Parliamentary Private Secretary and that he had to say all those things and be nice to the Minister, but he was not in touch with reality. He talked about how swiftly the Government have moved on some of the issues. That is not the experience that the Committee had when listening to evidence or indeed the impression given by the report or the Government’s response.
Let us look at a couple of the issues. On the licensing regime for petrol retailing, half of the garages in Northern Ireland sell illegal fuel. Many of them have been put out of business and many of the owners are forced to take loads from fuel-laundering plants. Despite the fact that in 2003 the Committee recommended that a licensing system should be introduced, nothing was done. There is promise of a consultation in paragraph 49 of the Government’s response and of a licensing system that might come in some time in 2007, but it is likely to be later than that. I hardly think that that shows urgency. That is all despite the fact that the industry is crying out for a licensing system, as are those involved in collecting the revenue—or not collecting it as the case may be, as result of all of the illegal fuel. We are saying that a licensing system would help and may have saved many of the small petrol retailers. A robust licensing system would at least ensure that it was much more difficult for those who laundered fuel in plants along the border to find an outlet, because much of it is now going through what appear to be legitimate forecourts, but are not.
I note that there has been some change regarding the second piece of legislation we asked for. That involved an amendment to part 5 of the Proceeds of Crime Act 2002 to aid the Assets Recovery Agency in, first of all, speeding up the civil recovery of the proceeds of crime. One of the things that the Minister must look at very soon is the way in which even when assets have been seized, they can be used to fund the legal defence of those from whom they were seized. The evidence that we were given was that large amounts of those assets were simply ploughed back into the legal defence. In fact, the legal bills were sometimes so enormous that it called into question just how genuine some of the bills were. Given that the report courageously points out that some professionals were actually part of this network, and I know some of the
professional organisations jumped up and down about that, it can be seen that this loophole of using seized assets for a defence might actually be recycling assets right around the system again. There is no sign in the Minister’s response that that aspect is going to be looked at soon.
The third area is the licensing regime for the road haulage industry; something that was introduced in other parts of the UK in 2000 and is not likely to come to Northern Ireland until the summer of 2008. Again, that is not a speedy response from the Government. In the meantime, people who are transporting illegal fuel can do so because there are not the same controls over the road haulage industry as elsewhere. Illegal cigarettes are transported and a whole range of other criminal activities are also taking place.
The requirement for the role of the Charity Commission to be extended to Northern Ireland is also important. There was a lot of interest in that issue in the local media when the Committee published its report. One of the fears that I had—I did a number of interviews at home on the issue—was that many legitimate charities could actually find themselves hurt by the fact we had identified charity fraud in a report. People do not want to see that money ending up in the pockets of the paramilitaries. It is important that some assurance is given in Northern Ireland that organisations set up as charities are genuine so that the funds do not dry up.
There are many other recommendations that I wanted to discuss, but I have spoken for long enough. The Committee Chairman has been generous in his comments on the Minister’s response. The Minister has tip-toed around many aspects of the report and the recommendations rather than address them head-on. There are some difficult issues here and I know that there is no panacea, but the tackling of organised crime is important for stability in Northern Ireland. It is important for the political stability of Northern Ireland and for showing that we are moving out of an era when paramilitaries and their political associates were able to run the place and benefit from organised crime.
Every effort should be made to address the issues raised in the report and look at the recommendations that the Committee has made. They were made after due consideration and as a result of much thought and evidence from people who are affected by paramilitary and organised crime on a day-to-day basis. The Government must give serious consideration to the report, particularly because some of those who came along did so reluctantly, not, as the Chairman said, because they were afraid. Many of them were afraid and were very brave to come because they knew that, if some of the evidence given to us in private had got out and been made public, they would have been in personal danger. However, many came along saying, “We have been here before. We came to this Committee when you were looking at fuel fraud in 2003. We gave evidence and nothing happened. We do not want this to be a waste of time again.” People took a chance in giving evidence; they gave us an honest view of what it is like to be a business person in Northern Ireland and the Government have a duty to respond to the fears that they expressed.
4.17 pm
Mr. Christopher Fraser (South-West Norfolk) (Con): I have listened carefully to what has been said by hon. Members who are more eloquent than me and who have far more understanding of the issues. As a relatively new member of the Committee, it has been a privilege to serve under the chairmanship of my hon. Friend the Member for South Staffordshire (Sir Patrick Cormack) and I compliment him and the Committee on the way in which the inquiry was conducted. The Committee made comprehensive recommendations and, as has already been said, was unanimous in doing so, which is quite something given the different views expressed.
The financial costs of organised crime and the potential gains to criminal gangs are significant and continue to present a threat to the long-term stability of the economy and the communities of Northern Ireland. It is worth spending a moment assessing the size of the problem. The cost of intellectual property theft is estimated at £200 million. Drugs worth more than £7 million were seized by the PSNI in 2005-06. Some 35 million cigarettes were seized during the year, which amounts to almost £7 million in revenue. Environmental crime such as illegal dumping is worth at least £25 million to criminal gangs and extortion probably generates in excess of £10 million in criminal profits a year. The revenue lost from fuel smuggling and legitimate cross-border shopping is estimated to be £245 million.
The Independent Monitoring Commission reported in 2005 that,
“because of...paramilitary involvement, organised crime is the biggest long term threat to the rule of law in Northern Ireland”
That is something that the report articulated well. Paramilitary-backed gangs have been responsible for some of the largest scale and most lucrative organised crime activities undertaken in Northern Ireland. Paramilitary groups have long relied on criminal means to finance their activities, and all paramilitary groups in Northern Ireland have been heavily involved in organised crime, both as a principal means of raising finance for their organisations and, obviously, for personal gain. The disciplined structures of paramilitary organisations have allowed a smooth transition from terrorist organisations into profitable criminal ventures. Extortion in particular has long been used by paramilitary groups as a means of raising finance for their terrorist operations and, since the early 1970s, has been an effective means of exercising paramilitary control over the community. The point about the community, which has been articulated this afternoon, is of great concern to us all. However, there has been a move beyond traditional means of fundraising such as extortion and armed robbery towards more sophisticated and complex forms of crime, such as counterfeiting and smuggling. Those points were well articulated to us during our inquiries. There is evidence to show that funds from organised crime run by dissident republican organisations in particular have been used to fund attacks and threats against members of the police, the Army and the Prison Service.
According to the Organised Crime Task Force,
“extortion remains endemic in parts of Northern Ireland”
but the true picture of the problem is far from clear. The true extent of Northern Ireland’s extortion problem is not reflected in the number of cases successfully prosecuted, as we have heard in the past. It is likely that less than 10 per cent. of extortion is reported to the police—I hope that the Minister understands that. There are also many difficulties in prosecuting such cases successfully. In approximately 85 per cent. of the cases reported, the victims decline to work with the PSNI during the investigation. When the PSNI has been able to conduct an investigation, every case has resulted in the extortionists being convicted, which is marvellous. We must focus on increasing the number of people who report the crime in the first place, and there is a real issue about how that process can be undertaken. What steps are being taken to make the public aware of those facts, to give them more confidence about reporting crime?
Violent crimes are also a particular concern. The incidence of cash-in-transit robberies is increasing. The use of so-called tiger kidnaps, which were described and in which family members are taken hostage to compel an employee to facilitate a robbery from their place of work, is on the up. Perhaps the most notorious example of that was the Northern Bank robbery in 2005. How many tiger kidnaps occur each year, and what advice is available to those who may be susceptible to that type of attack, to help them to protect themselves and their families?
HMRC has made significant progress on combating oils fraud, as the report highlighted. However, the amount of illicit fuel sold in Northern Ireland remains unacceptably high. It costs the Treasury £245 million a year in lost revenue. HMRC assesses that nearly all its investigations relating to fuel on mainland Great Britain involve individuals from Northern Ireland. A particular problem is the misuse of rebated fuels—fuels on which a reduced rate of duty is payable—especially red diesel.
The Northern Ireland Affairs Committee recommended, as my hon. Friend the Member for South Staffordshire and others said, reducing the level of tax paid on fuel in Northern Ireland to the same level as that in the Republic of Ireland to reduce smuggling. I believe that serious consideration should be given to changing the system to allow duty to be paid on fuel at the point of sale—as in the Danish model, in which rebates are reclaimed and offset against VAT returns—rather than at the refinery gate, as is currently the case. Given the health and safety, as well as the financial, implications of laundering rebated fuels, and the extortion and intimidation that often accompany that, will the Minister reconsider his position and conduct a comprehensive cost-benefit analysis of that recommendation?
Counterfeit cigarettes, which were talked about, are a major problem. According to the Organised Crime Task Force, smuggling
“remains one of the most lucrative forms of organised criminal activity.”
Counterfeit goods are of poor quality and carry health and safety risks. Illegal cigarettes carry an additional health risk because of increased levels of cadmium and lead and significantly higher levels of tar and nicotine.
As we heard from the hon. Member for Ealing, North (Stephen Pound), they are sold mainly through informal networks—family, friends, pubs and street corners. What steps are the Government taking to increase public awareness of the greater health risks associated with illegal cigarettes, as applicable in Northern Ireland as elsewhere in the United Kingdom?
There is an illicit market in spirits in the UK, which costs about £250 million a year—an enormous amount. Counterfeit alcohol has serious health implications as well. The risk of it being sold to children through unlicensed sources is enormously potent. That factor is important in all that we discuss, because I do not believe for a moment that people are necessarily buying these goods for themselves. They spread them around their communities and families, so the goods affect more people than just those who buy them. We must consider that extremely carefully in any further reports that we produce on the topic. Crime is a community issue. Individuals may be part of the problem, and they may be participating in the activity as a part of paramilitary organisations, as the hon. Member for East Antrim (Sammy Wilson) pointed out, but it is the question how far it extends into the community that is so important to us. Support for the police in tackling crime must go to the very top of the agenda.
All the issues that I have mentioned are very important. The figures speak for themselves—
The Parliamentary Under-Secretary of State for Northern Ireland (Paul Goggins) indicated assent.
Mr. Fraser: I know that the Minister understands and fully appreciates the severity of the problem, but what we have to do is to walk up to it and head it off at the pass. Part of that must involve a Government acceptance of the importance of education of the people in the communities who are involved, to enable them to realise that there is a better way. It is up to all of us in Westminster and colleagues from Northern Ireland, whom we support, to articulate the concerns to those communities and ensure that together—I repeat, together—with the Assembly up and running, as we all hope and pray it will be very shortly, we move forward positively, not just for sake of the present generation who are directly involved with the problems, but for the sake of future generations, who deserve a happy, safe future in the United Kingdom.
4.28 pm
Mr. Laurence Robertson (Tewkesbury) (Con): I congratulate the Committee on the work that it has done. I think that it took six months to compile the report. I have not been a member of a Select Committee for about five years, but I well remember that serving on such a Committee can be very hard work, especially when one is dealing with an issue as sensitive as organised crime in Northern Ireland, with all its security implications. I therefore pay tribute to the Committee members and in particular to my hon. Friend the Member for South Staffordshire (Sir Patrick Cormack) for chairing the Committee and for the very competent way in which he made his presentation today.
There is obviously a different atmosphere in Northern Ireland these days. There is hope. Things
have moved on considerably. However, the report emphasises something that I have been very aware of since I became a spokesman on Northern Ireland. We hear things over here, we read reports in the newspapers and we see pictures on television of events in Northern Ireland. That coverage tends to centre these days on the political movements and political discussions, but whenever I go over to Northern Ireland and read the local newspapers, I tend to see things that I do not read over here very often. More things are going on than perhaps the headlines report in this country. I know that we can access the newspapers in Northern Ireland through the internet, but if we go over there, read the newspapers and talk to people, they tell us of many things going on in the Province that perhaps we do not read about in England. That unfortunate fact is highlighted in the report, which emphasises the fact that there is a continuing big problem with organised crime in the Province. The fact that the Committee had to take evidence in private from witnesses who cannot be named shows how serious the situation remains.
Although we can all be optimistic—the hon. Member for Ealing, North (Stephen Pound), who is not in his place, is an eternal optimist—I sometimes think that we ought to take a more balanced approach to the way in which we address Northern Ireland issues. As ever, the hon. Gentleman spoke entertainingly, and I wish that he were here to hear my comments. I do not like to make them behind his back, as it were, but it is not my fault that he is not here. I wonder about the wisdom of having on Select Committees people who, although not exactly on the Government’s payroll, are closely attached to them. That might water down the independence of a Committee. I do not mean that in a nasty way towards the hon. Gentleman, for whom I have a great deal of admiration. If he comes back into the Chamber, I shall repeat that. The Government should consider whether the membership of Select Committees is as independent as it should be.
The hon. Member for East Londonderry (Mr. Campbell) emphasised the great importance of supporting the police, to which I shall return in a moment. The hon. Member for East Antrim (Sammy Wilson) spoke about the cost to business of the continuing organised crime in Northern Ireland, and very sensibly about the way in which paramilitary groups feed off the chaos that they themselves create. That is an old tactic. We may look back—the comparison is valid—to the way in which the Nazis seized power in Germany: they fed off chaos. We should be aware of that happening in Northern Ireland.
My hon. Friend the Member for South-West Norfolk (Mr. Fraser) gave worrying figures about the level of crime and the difficulty that exists in persuading people to report it. I wish to talk about the impact of organised crime on business and, therefore, on the economy of Northern Ireland. I have the privilege of dealing with statutory instruments that come before the House and I therefore deal with many issues and become conscious of the problems of the Northern Irish economy. Yes, there is a lot going on that should be welcomed, for example around the docks area in Belfast, but there are an awful lot of problems.
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