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Orders of the Day — Finance Bill

Part of the debate – in the House of Commons at 6:54 pm on 20th April 2004.

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Photo of Richard Bacon Richard Bacon Conservative, South Norfolk 6:54 pm, 20th April 2004

The hon. Gentleman makes a good point. Funnily enough, I have not done so, but he anticipates the point that I am about to make. Many countries do not have strip stamps because they are worried about fraud, as I shall explain in a minute. First, however, I have a couple of questions for the Government. They have said that there will be a capital fund of £3 million for small distilleries. It would be helpful to have confirmation that that is the right figure and, if it is not, to know how much will be available. What are the thresholds, and what constitutes a small distillery? The fundamental question, to return to the point made by the hon. Member for Moray, is whether this is going to work. There is no point in doing anything if the proposal will not work, will be open to fraud and, indeed, act as an incentive to commit fraud. The Government must consider the international context, because experience suggests that high-quality forgeries quickly become commonplace. With duty at £5.48 a bottle there is a strong incentive to commit forgery.

The Government should consider the fact that Ukraine reformulated its tax stamps on 1 January 2004 in an effort to defeat fraud on the existing stamps. Within three weeks, the Ukrainian police reported seizures of 60,000 bottles of illicit spirits, each marked with forgeries of the newly introduced state-of-the-art holograms. In Hungary, it is believed that 15 to 20 per cent. of the market is illicit. Several countries have either abolished the tax stamps regime—