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Lord Islwyn: My Lords, does the Minister appreciate that under a Labour Government only a minimum toll charge applied? Under the new regime, the charges have escalated significantly.

Noble Lords: Oh!

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Lord Islwyn: My Lords, I refer to the Severn bridges regime. Does the Minister further appreciate that there is now a renewed threat of VAT charges on top of those tolls?

Baroness Hayman: My Lords, the Government are concerned about the threat from the European Commission of VAT being charged on tolls. In common with France, Greece, the Netherlands and Ireland, this country fails to charge VAT on tolls and does not believe that tolls should be subject to VAT. Hearings are scheduled later this year at the European Court of Justice, with a final decision by the Court towards the end of 1999. We shall certainly defend our position in relation to ECJ infraction proceedings.

Lord Hooson: My Lords, I should, first, declare an interest as I am the chairman of Severn River Crossing plc--

Noble Lords: Oh!

Lord Hooson: Is the Minister aware that, despite the tolls, the increase in investment on both sides of the estuary has been very great during the past two or three years because the transport facility is so much better than it was before? Do the Government appreciate that when the two bridges are returned to them, free of all charges and in pristine condition within the time allowed by the Act of Parliament, they will be in a position to abolish all tolls, as will be the case with the Dartford bridge? However, do the Government intend to do so?

Baroness Hayman: My Lords, as the concession will continue for a maximum of 30 years and the prediction is that it will end after 22 years in the year 2014, it would be a foolish Minister who committed a future government to detailed policy at this point.

European Union: Abolition of Duty-free Allowances

3 p.m.

Lord Greenway asked Her Majesty's Government:

    What is their policy towards the abolition of duty-free allowances within the European Union.

Lord McIntosh of Haringey: My Lords, intra-EU duty free sales will end after 30th June 1999, unless there is a proposal from the Commission to retain them and the unanimous agreement of all 15 member states. The Government have always said that they would not oppose a study into the impact of abolition if there were consensus for such a study. My right honourable friend the Chancellor of the Exchequer, as chairman of ECOFIN, facilitated a discussion on 19th May from which it emerged that a clear majority of member states were against re-opening the decision and that there was no consensus for an impact study.

Lord Greenway: My Lords, I thank the Minister for that Answer. Following on from the ECOFIN meeting,

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does it not seem somewhat ludicrous that we are looking at abolishing a profitable industry employing about 120,000 people in the EU by way of a rather fudged system of compensation which may well cost taxpayers something like £6 billion over the next five years? Further, in addition to the well-voiced concerns of the aviation and ferry industries, is the Minister aware that the cruise industry is also extremely concerned about the matter? Indeed, that industry is one of the fastest growing areas of the holiday business in Europe and the uncertainty, coupled with the possibility of having to deal with a number of different tax regimes within the EU before harmonisation, may well place a vastly increased workload on those companies which could result in the deflection of some of this lucrative business away from EU ports.

Lord McIntosh of Haringey: My Lords, the noble Lord referred to a confused situation. The extension to the 30th June 1999 was a six-and-a-half-year extension to enable those affected to make alternative plans. Some of the estimates which have been made of job losses and of damage to the travel industry have been based on the assumption that there would be no replacement for duty-free sales. I am sure that the noble Lord knows that Commission officials are looking at the possibilities of duty-paid sales both at the ports and, indeed, on vessels.

Baroness Trumpington: My Lords, apart from job losses, would the Minister care to comment on the possibility of an increase in fares arising due to the lack of money going to the airport authorities from duty-free sales?

Lord McIntosh of Haringey: My Lords, if there is any loss of revenue, it is up to the ferry companies and the airlines to decide what action they should take as to whether or not they increase fares. I repeat: the estimates of job losses and fare increases in studies carried out for the operators differ greatly from those of the authoritative study carried out for the Department of the Environment, Transport and the Regions.

Lord Stoddart of Swindon: My Lords, is my noble friend the Minister aware that many people are quite bewildered by the abandonment or the withdrawal of duty-free sales? Indeed, they have always been under the impression that taxation and the imposition of duty, or the non-imposition of duty, were matters for Parliament at Westminster. Therefore, does not my noble friend agree that they will be very annoyed--I feel sure they will be--because they are now having a privilege taken away from them by people outside this Parliament and outside the Government of this country?

Lord McIntosh of Haringey: My Lords, as my noble friend must surely know, the original decision was taken by unanimous vote in 1991 when Mr. Norman Lamont was the Chancellor of the Exchequer. Therefore, Parliament did have a say in the removal of this concession. It is not taxation policy by the Commission; it is the removal of a concession which, if it did not exist, I do not believe anyone would deliberately invent now.

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Lord Rees: My Lords, can the Minister confirm that at the last ECOFIN meeting the Commission offered a paper on the implications of the abolition of duty-free sales? Further, if duty-free sales are indeed to be phased out in June of next year, can the noble Lord say when we are to have an indication of the new duty regime which is to be introduced?

Lord McIntosh of Haringey: My Lords, as I have already said, the Commission is working on the implications of duty-paid arrangements to replace those for duty-free sales. However, some of them could not be stopped; for example, duty-free sales in international waters. However, the issue is how to avoid the confusion which might arise if vessels were charging different rates during different parts of the voyage.


Lord Carter: My Lords, at a convenient moment after 3.30 p.m. today my noble friend Lady Hayman will, with the leave of the House, repeat a Statement that is to be made in another place on the Channel Tunnel rail link. I should like to take this opportunity to remind the House that the Companion to the Standing Orders indicates that discussion on a Statement, after the end of the Minister's initial reply to the Opposition spokesmen, should be confined to brief comments and questions for clarification. I should also like to point out that noble Lords who speak at length will do so at the expense of others.

Government of Wales Bill

3.6 p.m.

The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.--(Lord Williams of Mostyn.)

On Question, Motion agreed to.

House in Committee accordingly.


Clause 47 [Regulation of procedure]:

[Amendment No. 112 not moved.]

On Question, Whether Clause 47 shall stand part of the Bill?

Lord Simon of Glaisdale: Perhaps I may draw attention to three matters in Clause 47, the first two of which are purely drafting points. First, subsection (2) starts with the word "but". That is a fairly recent technique in drafting and is very much to be commended because it takes the place of the older subsection (1) notwithstanding the provisions of subsection (2), and so on. In other words, subsection (2) applies, notwithstanding the provisions of subsection (1). The "but" technique is very much an advantage. I note that the Minister has tabled an amendment to that effect regarding a later clause.

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My second point relates to subsection (3) of the clause which says:

    "The standing orders may make different provision for different circumstances".

That is computer nonsense from the draftsman's office which turns up whenever orders are in question. Of course, orders may make provision for different circumstances. That sort of provision is entirely unnecessary and I venture to suggest that it should be omitted in future.

The third matter concerns subsection (6) where at least two-thirds of the assembly members need to support a motion for change for it to be adopted. That kind of threshold was much debated when we discussed the referendum Bills. It bears out again the wisdom of the suggestion of the noble Lord, Lord Mackay, that all those kind of things ought to have been discussed before we ever established the referenda. It certainly seems reasonable to require a two-thirds majority for this change, or indeed any other change, because what is sought to be changed will often have been the result of accumulated wisdom and the reasons for having adopted it may well have been forgotten.

Chesterton described tradition in that sense as the democracy of the dead. I venture to think that this provision is valuable. We could well bear it in mind on other occasions when change--particularly violent constitutional change--from a state of affairs which has been long respected is sought.

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