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Lord Chesham: My Lords, I have already pointed out that this arrangement is producing substantial savings to the taxpayer, and that is why it has been done. As regards the other questions, we believe that privatisation is right in this instance and there are substantial savings for the taxpayer.
Lord Rea: My Lords, can the noble Lord assure us that the new private sector management of Assessment Services Limited will continue to support the current lines of research, some of which may have no immediate pay-off but may lead to discoveries of fundamental importance in future years?
Lord Chesham: My Lords, yes. We believe that the company which has now taken over NEL will continue to provide the services required by the Government. It is a highly reputable company and we have every reason to believe that we shall get the required services from it.
Lord Peston: My Lords, can the Minister explain how the National Engineering Laboratory is an asset which complements the assets of the people who are obtaining it and yet the taxpayer gets no net financial benefit? Speaking in an ordinary common sense way, that makes no sense to me whatever. I should have thought that we could at the very least get a net zero outcome. If one or two of us had been involved we might have made some money for the taxpayer. Is the noble Lord aware how absurd his answers sound to ordinary lay people?
Lord Chesham: My Lords, I do not think that I would ever refer to the noble Lord as an ordinary lay person. The point is that if through privatisation we reduce the taxpayer's expenditure in the future, there is a net benefit to the taxpayer from such action.
Lord Mackay of Ardbrecknish: My Lords, as far as I understand it, single market rules apply to all members of the European Community. That is why people from certain European countries come in considerable numbers to parts of this country to shop. That is why people from the Republic of Ireland visit the North of Ireland and Wales where they can buy a number of items, including alcoholic beverages, on which the duty is lower in this country.
Baroness Elles: My Lords, does my noble friend agree that the trouble is that a great many British citizens cross the Channel in order to buy beer in Calais and bring it back here to sell, which is quite contrary to what is allowed under Community law?
Lord Mackay of Ardbrecknish: My Lords, I am grateful to my noble friend for raising that point which allows me to say that if anyone is bringing back alcoholic drinks simply in order to sell them, they are committing an offence. Since the start of the single market, Customs has detected over 5,800 offences involving something like £11 million of revenue. There have been almost 800 prosecutions.
Lord Peston: My Lords, the one thing that I missed in the noble Lord's answer was the British Government's view of this matter. It is not a question of criticising the Community or those consumers who wish to buy in the cheapest market. Does the Minister agree that the brewing industry and the alcohol industry generally could argue that they are subject to a modicum of unfair competition? That is the essence of the matter. If individual countries fix their own excise duties, market distortions arise. One would like to know whether the Government have a view on that. It seems to me that the £367 million quoted by the brewing industry is quite a large sum of money. Do the Government think that they will be able to do anything about it in due course? Forgetting the usual answer of "We can't talk about the Budget at this point", and sticking to matters of principle, what line will the Government be taking in the longer run than next week?
Lord Dixon-Smith: My Lords, accepting that the last answer is correct, does my noble friend agree that current levels of duty in this country (and their disparity when compared with levels elsewhere in the EC) are increasingly, unfortunately, attracting criminal elements? Are we in danger of seeing once again the old-fashioned revenuers trying to come back as smugglers?
Lord Mackay of Ardbrecknish: My Lords, I do not believe that the position in regard to smuggling is quite that depicted in Treasure Island or other similar yarns. However, perhaps I may advise my noble friend that, as I mentioned, not only is there some distortion between ourselves and the French, but there is a distortion the other way between ourselves and the Southern Irish. We zero-rate many items, including children's clothing, which means that many people on the Continent find it advantageous to come here to shop. My noble friend should be careful about suggesting that we come to a common position. We might adopt the French position, but we might equally adopt that of the Danes, the Swedes or the Finns whose taxation on alcohol is very much higher than ours.
Lord Avebury: My Lords, does the Minister accept that his comparison of the situation with regard to alcohol with that of people coming here to shop for clothes is misleading because those who travel here from France or Germany to buy things from Marks & Spencer do not do so with a view to reselling those items in their own country whereas, as was confirmed by the answer which informed us that 5,800 offences have been detected involving a loss of revenue of £11 million, there are many other examples of people evading the rules which prohibit the resale of alcohol? Is not the Minister aware that the situation will become worse as a result of reductions in the number of Customs staff at ports and that very large sums of money, amounting to hundreds of millions of pounds, are being lost to the taxpayer?
Lord Mackay of Ardbrecknish: My Lords, I thought that I had already answered the question about people importing products for resale. It is clearly illegal and we are taking steps against it. I have no doubt that our European friends are doing likewise when the slope is in the other direction, so to speak. There will inevitably be a marginal loss to the taxpayer, but before one computes the loss to the whole of the UK industry, one must bear in mind that many of the items imported
Lord Mackay of Ardbrecknish: My Lords, I think that I have already answered that question. We believe firmly that matters of taxation are for individual countries to determine. They are not matters to be determined by the European Union.
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