Cross-border Shopping

Oral Answers to Questions — Treasury – in the House of Commons at 12:00 am on 25th June 1998.

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Photo of Peter Atkinson Peter Atkinson Conservative, Hexham 12:00 am, 25th June 1998

If he will make a statement on progress with the review of cross-border shopping and smuggling of alcohol and tobacco announced in his Budget of July 1997. [46162]

Photo of Dawn Primarolo Dawn Primarolo The Financial Secretary to the Treasury

My ministerial colleagues and I have seen and studied the review report, and value greatly the input by members of the trade in particular. However, in view of the possible public spending implications, the Government will announce their proposals as part of the outcome of the comprehensive spending review later in the year.

Photo of Peter Atkinson Peter Atkinson Conservative, Hexham

While the report has been gathering dust on the Minister's desk for the past six months, small retailers have been going out of business and criminals have been getting richer. The north-east of England is the bootlegging centre of Britain, and Kent police estimate that more than 1,000 north-easterners are involved in smuggling of one form or another. It is fuelling criminal activity throughout the region. Will she act, and publish the report to bring the problem out into the open?

Photo of Dawn Primarolo Dawn Primarolo The Financial Secretary to the Treasury

I should remind the hon. Gentleman that the Conservative Government did not take any action on this issue. On revenue lost through the smuggling of beer, for example, the Government lose £120 million a year against £3 billion in revenue collected. It is a bit rich for the hon. Gentleman to accuse the Government of not taking any measures to counter smuggling when we have announced tougher prosecution policies, substantially increased the charges for returning vehicles and made it absolutely clear that any legitimate business that participates in the trade will have severe sanctions taken against it. We have repeatedly told hon. Members that smuggling is a criminal activity, that Customs and Excise is increasing its activities to prevent smuggling, and that they should all make it clear that smugglers, are taking money out of the back pockets of our schools, our hospitals and our public services.

Photo of Stephen Ladyman Stephen Ladyman Labour, South Thanet

May I bring to my hon. Friend's attention The Pipe Shop in Sandwich in my constituency, which is one of many businesses in east Kent that will be driven out of business by the resale of goods bought duty paid in France if we do not do something to curb that trade? Does she agree that, at no cost to the Treasury, customs officers could be allowed to reject the claim that people are bringing goods into the country for family or friends? People should be allowed a personal allowance set at a level appropriate for a normal person's consumption in three months, rather than at a level appropriate for the consumption of a chain-smoking dipsomaniac over 12 months.

Photo of Dawn Primarolo Dawn Primarolo The Financial Secretary to the Treasury

The limits to which my hon. Friend refers are those to which the previous Government committed us in terms of the legitimate amount of produce that members of the public could bring into this country. That is non-negotiable, and the Government are not able to reopen it. It is a shame that Conservative Members did not think a little more carefully when they agreed those limits. My hon. Friend has made an important point which the Government bear in mind and pursue actively; however, we must not only prevent smuggling, but prevent the legitimate trade from being undermined by such activity. All hon. Members would want to join us in that.