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Since 2003, the number of front-line uniformed customs officers in south Wales has been reduced by nearly 75 per cent. That strategy, which was embodied in the law enforcement business plan, included the complete withdrawal of permanent customs cover from the ports of Swansea, Newport and Pembroke in 2003. Those customs officers were responsible for the major docks, ferry ports and airfields across the region.
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I understand that an operational team covering north Wales, which was based in Chester, was also removed. Its role was to be taken over by two small teams based in Cardiff and Holyhead, which were to be supplemented by mobile teams that could be deployed anywhere in Wales or the wider customs region on an intelligence-led basis. In reality, the brigade teams have relentlessly focused on the midlands and the south-east at the expense of Wales.

Mark Williams (Ceredigion) (LD): Does the hon. Gentleman agree that public perception is very important, and that the notion of a roving team of Customs and Excise officials based in the midlands that comes periodically—very periodically—to Wales is no substitute for permanent staff in inspiring confidence in the Customs and Excise service?

Mr. Crabb: The hon. Gentleman raises an important point about perceptions and the need for people in Wales to feel that they are being adequately covered, but the matter is even more important than that. It is about operational effectiveness, and I want to get to the heart of that in the next few minutes.

I have been told that no checks whatsoever are now carried out on commercial traffic through Pembroke Dock, which is a major Welsh port and a main route for Irish and European traffic wishing to avoid the long journey through France. The chances of non-commercial traffic being stopped have become exceptionally slight. Overall, there has been a 50 per cent. reduction in permanent customs cover for Wales. The withdrawal also means that there is now practically no permanent front-line uniformed coverage from Cardiff to Holyhead—some 500 miles of coastline.

It is not scaremongering or an exaggeration to say that that approach to detection and enforcement at ports of entry is creating a situation whereby Welsh ports risk becoming a soft touch for those who would seek to use them for the illegal movement of freight and persons. In his report last year on the review of counter-terrorism legislation, Lord Carlile said that

He also warned that customs officers are so thin on the ground that they are “no discouragement to terrorists”.

Albert Owen (Ynys Môn) (Lab): I am grateful to the hon. Gentleman for giving way on that important point. Lord Carlile visited the port of Holyhead in my constituency and spoke to the port authority there. He was happy with the overall security measures, because although there has been a reduction in the number of customs officers on the front line—most of them went when the area became a common travel area—the numbers of police officers and port security officers employed by the port authority have gone up. When Lord Carlile went to Holyhead, he assessed the whole security issue and not just Customs and Excise.

Mr. Crabb: That is an important intervention. The hon. Gentleman is absolutely right that we should not see customs cover as ultimately separate from the
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wider security arrangements. If Lord Carlisle made that judgment about Holyhead, I am very pleased, but the police and customs officers to whom I spoke said that there was significant concern about ports across Wales generally and the weakness of customs cover at them.

What are the practical consequences of this state of affairs? First, at the same time that customs cover has been eroded, there has been a fall in the overall volume of drugs seized by customs. There is no evidence to suggest that the decline in seizures is because of a decline in the overall trade. The success of the Serious Organised Crime Agency last May in preventing what would have been the largest ever shipment of cocaine across the Atlantic into Wales via the Pembrokeshire coast is a stark warning of the scale of the threat that still exists.

The failure of the current strategy is borne out by figures that were provided to me by the Public and Commercial Services Union. They show a strong correlation between the decline in the amount of drugs seized by customs in the past three years and a fall in the street prices of various popular drugs during the same period. The amount of cocaine seized last year was less than one third of that seized just three years previously: 5,800 kg in 2005-06 compared with more than 20,000 kg in 2003-04. Over the same period, the per gram street price of cocaine dropped sharply. The figures for heroin, cannabis, ecstasy and crack cocaine all show the same relationship.

Those drugs are having a devastating impact on many communities in Wales. The police tell me that they are particularly concerned about the cheap heroin flooding into south and west Wales. We need to be careful about implying that a correlation means causation, but there is no doubt in my mind that the drop in customs seizures as a result of the removal of permanent customs cover at Welsh ports is allowing a greater flow of illegal drugs into Wales through Welsh ports, and that that is a contributory factor to the overall drugs problem in Wales.

In the past year, we have marked the bicentenary of the Act abolishing the transatlantic slave trade. There has been a strong focus on human trafficking as one of the modern forms of slavery that needs to be stamped out. We know that the UK, with its booming illegal sex industry controlled by criminal gangs, is now a major destination for girls and young women being trafficked from eastern Europe, south-east Asia and north and west Africa. We should not engage in the fantasy that the victims of this grotesque trade are to be found only in London. A recent report on trafficking by Amnesty International suggested that Wales is now also home to a “sophisticated and extensive” trade in humans. Amnesty estimates that there are some 60 to 100 victims in Cardiff at any one time and, in a series of major police raids on massage parlours in Cardiff, Swansea and Bridgend last year, the vast majority of prostitutes discovered were illegal immigrants. There was a strong suspicion that many had been trafficked. It is obviously hard to quantify numbers because the trade is hidden, but outreach workers assisting sex workers in Cardiff report that about 50 per cent. of the girls and women they meet are foreign, and they believe that many of those girls have been trafficked.

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There is little strong evidence to suggest or to prove that many of those girls are being trafficked through Welsh ports as opposed to reaching Wales via England, but I have spoken to police and customs officers who tell me that they are concerned that girls and young women are being trafficked through Welsh ports. It was suggested to me that the route into the UK from Europe and North Africa via northern Spain and Ireland into Welsh ports is increasingly seen by traffickers as a less risky route than the traditional route from the continent via the south-east ports.

This is a timely discussion, given the Prime Minister's announcement last week of a new UK border agency. His promise of an integrated system is welcome, but restructuring institutions and reshuffling personnel is not the whole story, and the resourcing issue must be addressed.

I opened my comments by referring gently to the calamitous news that broke yesterday about the missing child benefit claimant records. It would not be right for me to score cheap points about that—

The Financial Secretary to the Treasury (Jane Kennedy): Tempting, but not right.

Mr. Crabb: Tempting, indeed.

The vast merged agency created by the merger of Revenue and Customs is a sprawling, cumbersome organisation that is beset with operational difficulties. The theoretical efficiency gains from the merger have become lost in a huge drive to slash the head count as part of the Government’s wider efficiency drive to reduce civil service jobs. With tax credit problems, disastrous proposals for decimating the network of tax offices in Wales, lost computer records, and the crazy and bewildering increase in the number of internal UK flights taken by senior Her Majesty’s Revenue and Customs managers, a picture is emerging of an organisation with serious problems, and our debate today about customs cover should be considered in that context.

My hon. Friend the Member for Sevenoaks (Mr. Fallon), who is Vice-Chairman of the Treasury Committee said yesterday that there have been

A senior member of HMRC told me privately last week that the Department is in a state of “utter shambles”, and I understand that an internal survey this summer showed that just one in five HMRC staff was satisfied with the Department. The chairman of HMRC behaved honourably yesterday—that happens far too infrequently in public life—when he took responsibility for operational failures, but the problem also concerns policy.

I shall end with a series of questions, which I hope the Financial Secretary will be able to answer today, or in writing later if she does not have the information to hand or if there is not enough time. Are current arrangements for customs cover at Welsh ports adequate and effective? Is there any research showing that the erosion of permanent customs cover at Welsh ports has not led to an increase in the overall supply through those ports of illegal drugs or trafficked people? If she does not have such research, can she provide an assurance that processes are in place to
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review the effectiveness of the current arrangements in Wales in the light of those challenges? What assurance can she provide that the priorities of customs teams are not being distorted by centralised targets, and that the more difficult challenges of trafficking in drugs or humans are being addressed as seriously as matters such as tobacco smuggling? Will the new Border and Immigration Agency lead to an overall increase in resources specifically for detection and investigation at ports of entry in Wales, or are we merely rebranding the current customs mobile detection teams which, as the hon. Member for Ceredigion (Mark Williams) said, rarely appear in Wales? With customs inspections at an all-time low in Wales, with access to cheap class A drugs on the streets never easier, and with fears of an increase in trafficked young women and girls, Welsh ports are at risk of becoming a soft touch for traffickers. Wales is a wide-open back door to the UK, and needs better security arrangements.

11.14 am

The Financial Secretary to the Treasury (Jane Kennedy): It is a great pleasure to be here this morning debating security at the Welsh border. I am grateful for that opportunity, because it allows me to put on record at the outset not only my experience of working with HMRC during the past four months, but my long experience of working with it in Northern Ireland. It performed a critical role, with other law enforcement agencies, in assisting us to bring the Northern Ireland organised criminal networks under serious and sustained attack to the extent that real progress was made, and continues to be made, in combating organised crime. The Chamber should understand the central role played by co-ordinated work with other agencies—including intelligence work and work with special branch and the police—in the success of HMRC in dealing with the threats that it faces and the complex range of tasks that we ask it to perform.

Albert Owen rose—

Jane Kennedy: My hon. Friend indicated that he would like to intervene, and although it is a short debate I shall give way to him on this occasion.

Albert Owen: I was hoping to contribute to the debate at greater length and in detail, but this is an intervention.

I am grateful to the hon. Member for Preseli Pembrokeshire (Mr. Crabb) for securing this debate. He claims that Wales could be a soft touch and a back door, but I do not accept either of those statements. First, it is a front door, because Holyhead is one of the busiest ports in the United Kingdom. It is also a major ferry port—the third largest in the United Kingdom and the largest on the western seaboard—with more than 2 million passengers a year.

Co-operation between the different agencies is an issue, and while the hon. Gentleman is right to say that drugs seizures by HMRC have fallen, police seizures have risen considerably, because they are compensating in a common travel area for much of HMRC’s work.

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Jane Kennedy: My hon. Friend makes an interesting point. The quality and nature of the work and the co-operation between different agencies obviously need to be kept under constant review, and that is taking place.

I noted the point made by the hon. Member for Preseli Pembrokeshire about having to leave early. Rather than trying to wind up the debate early, I shall probably need the full time available, but I shall not take offence if the hon. Gentleman leaves, although I am not sure how you feel about that, Mr. Atkinson.

Mr. Peter Atkinson (in the Chair): Order. This debate continues until half past the hour, so the Financial Secretary has the Floor until then.

If the hon. Member for Preseli Pembrokeshire (Mr. Crabb) runs, he will, taking Prayers into account, get there in time.

Jane Kennedy: I have talked about the challenges that HMRC faces, and the requirement constantly to review those challenges and to work in co-operation with other agencies. I will look up the point that my hon. Friend raised.

The hon. Member for Preseli Pembrokeshire said that there was concern about the drop in the street price of drugs as a result of reduced numbers of seizures. I am sure that he will appreciate that there is no simple correlation between the two. The number of seizures and the street price are not directly related, and the matter is extremely complex.

Mr. Crabb: There is a correlation in the specific meaning of the word. I said that we should not just assume that correlation means causation. There is a range of factors, but the drop in the number of seizures, which are not fully compensated for by an increase in police seizures, is a contributory factor.

Jane Kennedy: That is a fair and valuable point, and we want to monitor that, but the matter is of equal concern because the organised criminal networks that traffic in drugs and people are the same. They simply turn their hand to whatever is the easiest commodity to traffic at the time. Seizures of cigarettes in 2004-05 and 2005-06 were 2.3 million and 2.7 million respectively, and seizures this year remain broadly in line with the two previous years. That evidence confirms that there is a continuing risk in Wales, but resources are being deployed appropriately and in line with the current threat.

I want now to make several more general points about the way in which HMRC is working before talking about the border agency, if I have time. I will, of course, undertake to write to the hon. Gentleman if I do not answer all the questions that he has raised.

About 7,000 HMRC staff are employed on activities that touch on the border, and the majority of detection staff—about 4,500—are deployed at ports, airports and inland. Such uniformed customs officers, who are familiar to us all at ports and airports, have to help with and support detection work, with their highly effective dogs, which can search out class A drugs, cash, animal products and tobacco.

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HMRC has also invested heavily in new technology and has extensive state-of-the-art X-ray and scanning equipment, some of which is at Cardiff and much of which is mobile, being used at ports and airports throughout the UK. It also has a five-strong fleet of modern, world-class cutters and crews, who are continually active off the UK’s more remote coastal locations, including the south-west approaches. The cutter fleet has a highly sophisticated monitoring capability and forms an integral part of HMRC’s anti-smuggling strategy. It is a pleasure to be able to spell out some of the really good work that HMRC is doing. The whole organisation is saddened by the announcement that we have had to make and the events that led up to it, but it has some extremely professional and highly skilled people, who are doing a terrific job, and I pay tribute to them.

To meet the challenges that we have discussed and make more effective use of its resources, modern equipment and assets, HMRC has changed its tactics in recent years and become more intelligence-led and less predictable. It is critical that it does so, and that is an important change. Fixed teams of officers at every port and airport, who are engaged on routine, less productive duty patterns, are not the most efficient and effective way to tackle or deter today’s organised, sophisticated and well-resourced criminal gangs, who are determined to breach the UK’s border controls. Experience shows that flexible mobile teams allow Customs to deploy in larger numbers, less predictably and with greater impact to any area of the UK where intelligence identifies a risk, and I am sure that the hon. Member for Preseli Pembrokeshire would want Customs to do so.

As a result of building a highly skilled, highly mobile and better equipped force and working more closely in partnership with the police, the Border and Immigration Agency and anti-terrorist agencies, HMRC is today better able to tackle modern-day criminals and others intent on breaching our border controls. Through its investment in intelligence, data acquisition, which is important in such work, and new information technology, HMRC is better placed to target criminals and disrupt their activities before they cause harm.

Albert Owen: When the new single agency is up and running, it will encompass UKvisas. That is not applicable to the Welsh ports, because they are a common travel area, but it is applicable to bringing together immigration and Customs. However, I am still concerned that there needs to be a proper framework, including liaison with the police. At present, the work that we are discussing draws on territorial police, and local resources are used for port security. All that comes out of the central budget. Could that be looked at in the future?

Jane Kennedy: That will obviously be part of the thinking that goes into developing the new border agency. It is clear that the police will not be part of that agency, so the discussion that my hon. Friend describes will have to be taken forward. However, the border agency has been set up precisely with the objective of strengthening UK borders, and a significant majority—hon. Gentlemen may wish to hear this—of
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the detection staff based in Wales are likely to transfer to it. The combined detection skills of the BIA, as it is called at the moment, and UKvisas will strengthen the UK border. The new agency will have a combined work force of about 25,000 staff. We envisage that it will be able to join up the powers and skills of HMRC and the BIA, giving us even greater expertise in controlling the borders in Wales.

Let me put things into perspective and spend a minute or two talking about what happens at present. Current intelligence continues to indicate that the flow of illicit goods into the UK, such as counterfeit tobacco and class A drugs, will not come through small ports or airports, contrary to the fears of the hon. Member for Preseli Pembrokeshire, although these things obviously need to be kept under close watch. Current intelligence indicates that they enter through the major ports and airports, which are principally in the south and east of England, and that they use commercial modes of transport. That view is supported by local operational intelligence, which indicates that the M4 corridor and west midlands are used to get supplies of illicit tobacco into Wales. That means that HMRC can best protect the communities of Wales from the threat posed by such commodities by tackling this major flow at the point where it enters the UK. Of course, basing Customs resources solely in major ports and airports cannot be the full answer, but if there is a perception that that is where the work is intensifying, that is for very sound operational purposes.

Mr. Crabb: If there is virtually no full-time uniformed Customs presence at the Welsh ports, who is gathering the evidence to suggest that they are not a major point of entry for the illegal products that we are discussing?

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