Crispin Blunt (Shadow Minister, Home Affairs; Reigate, Conservative)

I welcome all members of the Committee who have managed to get here this morning. Is the Government Whip concerned about the numbers behind him?

Crispin Blunt (Shadow Minister, Home Affairs; Reigate, Conservative)

I am glad to hear that.

One of the things that make the Minister such an attractive personality in our politics is his ability to explain things in simple, straightforward, layman terms when they might otherwise be presented in the complicated language beloved of bureaucrats and legislators. It is on such a matter that I would like him to assist us on clause 32. I am not entirely sure what the clause proposes, and why it does so, so I have a few questions. It is a sensible principle that a Committee should have a collective idea of what legislation involves before it is passed.

First, what is drawback? Secondly, clause 32(4) provides for commissioners to make payments to the director or the Secretary of State, while the main provision of the clause is to arrange for the director of border revenue to pay money to the commissioners. Under what circumstances is it anticipated that the commissioners will have to start making payments to the director or the Secretary of State? Thirdly, why is there a requirement for subsection (5), which states that subsection (4) applies

“whether or not the reason for a deficiency is or may be that an amount has been paid or retained on the basis of an estimate that has proved or may prove to be inaccurate”?

I do not understand why such clarification is needed, so I would be grateful for an explanation. Finally, when is a payment to be treated as a repayment?

Phil Woolas (Minister of State (the North West), Home Office; Oldham East & Saddleworth, Labour)

Good morning, Miss Begg. I am grateful to the hon. Gentleman for his kind words; I shall take them as a compliment, even if they were not intended as such. The answer to his questions is the all-powerful Treasury, and I will explain why. Clause 32 deals with  the payment of revenue to Her Majesty’s Revenue and Customs commissioners, and sets out provisions on the accounting of revenue collected by our officials in the UK Border Agency. That revenue includes duties and taxes that may be paid on goods by passengers who go through the red channel at an airport, a ferry terminal and so on. The second issue is the post. A significant amount of excise and duties work is carried out on goods that come through the post, most of which are legal, although some are not.

The clause requires the director of border revenue—the chief executive of UKBA—and the Secretary of State to pay any money by way of revenue, or security for revenue, to HMRC in accordance with Treasury directions. In other words, it is the Treasury’s money, not mine—I just collect it. The intention is that moneys will be paid directly into HMRC bank accounts, as now, so we are the agent passing the money on. The hon. Gentleman was quite right to pick out subsections (4) and (5).

The clause also provides for HMRC to make funds available to ukba if we need to pay any money back. A ship or a container may drop some of its goods in the UK and then move on. We may charge duty on all of it, but the company will then point out what the manifest shows. There are occasions when we need to pay money back, so the provision authorises HMRC to give us money to do so. It is anticipated that the repayments will be made directly by HMRC, but there might be occasions where it needs to come through us.

Revenue is defined in the clause as including all duties and taxes. It also includes penalties. Your constituents, Miss Begg, might have had their cars impounded at Dover or at other ferry ports, but they are clearly very honest. Some of mine might have come a cropper in that regard and paid penalties. The clause covers those amounts and also the proceeds of forfeiture. If someone has brought something into the country on which they have not paid duty and there is forfeiture, there is revenue from that. The clause is designed to oil the wheels. The reason, to answer the hon. Gentleman directly, is that the Treasury holds the purse strings.

Crispin Blunt (Shadow Minister, Home Affairs; Reigate, Conservative)

Will the Minister assist us on some of the detailed questions about drawback? Why does subsection (5) need to be included? I think I have understood what the repayments will be, but I do not entirely understand why a payment can be treated as repayment, under subsection (7)(b)(ii).

Phil Woolas (Minister of State (the North West), Home Office; Oldham East & Saddleworth, Labour)

I apologise. I did not answer the question about drawback. Drawback is described as a method for repaying excise duty on goods that have not been, and will not be, consumed in the United Kingdom—the goods coming in and going out. Subsection (5) provides that subsection (4) will apply whether or not the reason for the deficiency is, or might be, that an amount has been paid or retained on the basis of an estimate that has proved, or might prove, to be inaccurate. Again, if it is estimated from a ship’s manifest that four containers have been dropped off at Harwich and it turns out that it was only three because the order was changed, the clause allows us to reflect that. I am advised that the clause mirrors provisions in the Commissioners for Revenue and Customs Act 2005. If it were not included, it could be argued that we could not cover such a deficiency. I hope that I have provided the explanation that the hon. Gentleman seeks.

Crispin Blunt (Shadow Minister, Home Affairs; Reigate, Conservative)

When is a payment a repayment?

Phil Woolas (Minister of State (the North West), Home Office; Oldham East & Saddleworth, Labour)

A company might have made a payment to us in lieu of any excise or duty, but the way in which accounts work over a passage of time means that we can identify how much duty was required only retrospectively. The company may bring in a tonne of goods every month, but that is on average over the year—it could be two tonnes in January and half a tonne in February. The repayment in that regard is the refund for the company that paid the duty. I hope that I have explained the situation in clear English—I think that I have.

Crispin Blunt (Shadow Minister, Home Affairs; Reigate, Conservative)

I am extremely grateful for the Minister’s explanation. He has entirely justified the encomium I gave him at the beginning of my remarks.