HC Deb 02 February 1993 vol 218 cc282-8

12.1 am

Mr. Andrew F. Bennett (Denton and Reddish)

On a point of order, Madam Deputy Speaker. May I draw your attention to the fact that, after motion No. 5 on the Order Paper, we read that the Select Committee on Statutory Instruments has not considered the instrument. Since that was printed, it has considered it, but I suggest to you that one of the duties of the Chair is to protect the rights of Back Benchers. It is an unsatisfactory state of affairs if that Select Committee produces a report—and I understand that there are copies on the Table and in the Vote Office—indicating that there is a defect in the drafting of the order if Members do not have a reasonable amount of time to look at it.

I ask you at least to consider drawing to the Government's attention the fact that it is not satisfactory for them to table an order like this until the Statutory Instruments Committee has had an opportunity to consider it and to make a report to the House on which hon. Members can form an opinion so that there may be an informed debate. You will be aware that the Select Committee receives a large number of orders during a year and the whole purpose of the Committee considering them is to produce reports and to inform the House. I hope that you will rule that it is not satisfactory that the Committee should consider a matter like this at half-past four in the afternoon, with the House considering it late the same evening.

Madam Deputy Speaker (Dame Janet Fookes)

The ordering of business is not strictly a matter for the Chair, but the hon. Member has made his point and no doubt it will have been heard by those on the Government Front Bench.

12.3 am

The Paymaster General (Sir John Cope)

I beg to move, That the Customs and Excise Duties (Personal Reliefs for Goods Permanently Imported) Order 1992 (S.I., 1992, No. 3193), dated 16th December 1992, a copy of which was laid before this House on 17th December, be approved.

Madam Deputy Speaker

I understand that with this it will be convenient to discuss at the same time the following motion: That the Customs Duty (Personal Reliefs) (Amendment) Order 1992 (S.I., 1992, No. 3192), dated 16th December 1992, a copy of which was laid before this House on 17th December, be approved.

Sir John Cope

I shall come in a minute to the point of order raised by the hon. Member for Denton and Reddish (Mr. Bennett).

These two orders concern personal reliefs for people coming into this country. They are both made necessary by the start of the European single market and both have the effect of continuing the reliefs which concern travellers from outside the European Community. They both replace orders which previously applied to all countries, including the Community. However, under the single market, we do not need reliefs on the same basis because travel within the EC is covered by other regulations.

The two orders basically continue the old reliefs for travellers from outside the Community. The first, No. 3193, primarily continues relief on the personal belongings of people who come to live here. The second order, No. 3192, provides for continuation of the familiar duty-free and duty-paid allowances for those arriving from outside the EC. As we have discussed on other occasions, travellers from within the Community now have different rules under different legislation, but for those arriving from outside the European Community the allowance for other goods has also been increased by this order to £36—not a large increase, but nevertheless a small improvement.

As the Member for Denton and Reddish mentioned on a point of order, the Select Committee has put before the House today a report drawing the attention of the House to the instrument, because there is an argument as to whether the drafting is correct. It is all to do with the definition of "third country", as hon. Members will have seen from the note on the Table. The Customs and Excise says, as is clear from a memorandum which it submitted on the point, that it considers that the legal effect of the present order is clear. Evidently there is room for argument.

It is an extremely abstruse point of parliamentary drafting, but I am advised that it is clear. We will try to persuade the lawyers on both sides of the argument to reach agreement, and, if it is necessary to do so, I shall bring a further order before the House to amend the existing provision.

12.4 am

Mr. Andrew Smith (Oxford, East)

I shall not detain the House long, but I should like to echo the point raised by my hon. Friend the member for Denton and Reddish (Mr. Bennett). It is clearly important that the drafting of the orders is right and we are indebted to the Select Committee on Statutory Instruments for drawing the error to our attention. I take the Paymaster General's assurance that the matter will be put right.

As I understand the orders and what the right hon. Gentleman said, they amend the personal reliefs from customs duty to remove from relief those goods purchased by travellers from other European Community member states who will now be catered for in another order, but leave in place the previous allowances for travellers arriving from outside the Community.

The orders are part of the general change that we welcome, opening up opportunities for members of the public to derive some personal benefit and enjoyment from the operation of the single market. For many millions of our citizens, such changes do more in an immediate sense to give meaning to the European Community and the freedom of movements of people and goods than many of the economically and constitutionally grander principles and declarations of the Maastricht treaty.

The second order, which applies to permanently imported goods, has the same effect on people importing belongings when moving house, honorary decorations, awards, goodwill gifts, inherited goods and certain goods ancillary to specified visiting forces. It also reflects the commendable achievement of the Community in making it as easy as possible for people to move home from one Community member state to another, thereby rendering the old reliefs redundant except for those moving to the United Kingdom from beyond the European Community.

We welcome the orders, but I wish briefly to press the Paymaster General on the staffing consequences for Customs and Excise services, which we touched on briefly in last week's Maastricht debate on the harmonisation of indirect taxation.

It is generally accepted that the creation of open border crossings for EC citizens and the fact that excise goods will no longer be taxed at the frontier enormously increases the scope for smuggling. I am talking not about cross-border shopping, which the Paymaster General has already estimated could cost £250 million per year, but about smuggling for resale on the black market. Given the relatively high excise duties on some items in the United Kingdom, the potential financial gains to smugglers are enormous. For example, I have heard that one container shipment of Spanish cigarettes alone could net £30,000 or more in profit.

In regard to the numbers of excise staff, I understand that the board's management plan for 1991 made an allocation of an additional 248 staff for the extra inland work arising from the single market, but following the 1991 autumn statement, this was reduced to 178 staff. That is not many staff, given the potential scale of the problem and the shift to inland scrutiny that the single market necessarily involves. There must be literally hundreds of thousands of potential outlets for smuggled goods.

Secondly, the small increase in staff for inland scrutiny must be set against an overall reduction in staff in the service. I understand that the projected outturn for Customs and Excise staff for the current financial year is 27,800 staff years, of which 2,200 are on excise work, as compared with 28,400 for 1991–92 in the board of management report, of which 2,300 were on excise work. Notwithstanding the allocation of 178 staff to which I referred, the excise department has fewer staff to undertake what is undoubtedly a far more difficult job. The same arguments apply to customs staff, for whom the 1992–93 projected outturn is 9,900 staff, compared with 11,000 for 1991–92.

Those are serious issues and I want a clear assurance from the Paymaster General that they will be kept under the closest review, that staff numbers and the extent of smuggling will be carefully monitored, and that, if it becomes apparent that additional staff are needed, the Government will not hesitate to appoint them, for the public would have it no other way.

12.10 am
Mr. Michael Stern (Bristol, North-West)

I have three brief comments to make on order No. 3193. In view of the lateness of the hour, I shall be happy if my right hon. Friend the Paymaster General wishes to write to me about them, rather than attempting to answer me now.

First, paragraph 13 contains two references to a person becoming "normally resident" in this country. My right hon. Friend will be aware that there are a number of slightly differing definitions within the tax Acts of what is normal or ordinary residence. It would have been helpful if the appropriate statutory reference had been given in the order to show which definition is to apply, or whether the definition which will apply is to be included in the Government's domicile Act, when that appears.

Secondly, I am slightly worried about the reference in paragraphs 13 and 15 to the registration of property brought in and given relief in the order, which is wholly laudable. A favourite way to explain undeclared income used to be to suggest that it arose, in the case of someone coming to this country to marry, from property brought in before the marriage. I notice that under the order such property would have to be declared. I want an assurance from my right hon. Friend that, under the parallel order—under the single market—there will be some way to check on what might otherwise be a false claim to explain otherwise unexplainable income.

Thirdly, paragraph 16 of order No. 3193 deals with relief for scholastic equipment. I notice that students coming into this country are entitled to bring with them normal scholastic equipment, including calculators or typewriters. There is no relief for computers, although some students might be coming here to attend a course requiring their use. It would seem odd if they had to pay duty on second-hand computers with no great value when they do not have to pay duty if they bring in a separate calculator and typewriter. I should be grateful for reassurance from my right hon. Friend on that.

12.13 am
Mr. A. J. Beith (Berwick-upon-Tweed)

A fair amount of confusion will flow in the public mind from the orders. That is no fault of the Minister's, but he must be aware that he may have to take some steps to deal with it. Some of the confusion probably arises because, with all the publicity about the new arrangements for moving duty-free goods across frontiers within the Community, people have got used to the idea that they can buy large quantities of alcohol and other goods and have nothing to pay, so long as they are importing it for their own use.

However, people coming from outside the Community—as many people returning from holiday will be—are still subject to stringent restrictions. For example, even with the revalorisation, the allowance amounts to only £36 in respect of gifts. Officers at the ports will have quite a difficult time, at least initially, explaining to people coming from non-Community countries that they have grossly overestimated what they are allowed to bring in.

There will also be a problem at some of the ports which have both Community and non-Community traffic. Take a port such as North Shields or Harwich, where the morning boat will come from Denmark and the evening boat from Sweden. I am not quite sure how Customs and Excise will manage the now very different requirements for staff in that situation, because the morning boat from Denmark will require only the sort of overview that customs officers will now take of people coming from a Community country, whereas the boat from Sweden will require the full application of all the provisions to which these orders refer, with the very strict limits that they include.

Since one of the consequences of the changes has been a considerable transfer of staff to landward duties—with some argument about whether enough staff are available for those very different duties—I wonder how Customs and Excise will manage this very different pattern of operation at the ports, where some vessels will come from Community countries and some not.

Something else that people may not realise but which is underlined by the orders is the extraordinary range of exemptions and mystifying allowances which exist, like the allowance of up to £800 for a wedding present, or the fact that someone coming back as an official visitor—I am not sure how far that category extends beyond Ministers to other office-holders—can bring back without paying duty a gift from some oil sheikh who has very kindly bestowed it on him, as well as the scholastic items mentioned by the hon. Member for Bristol, North-West (Mr. Stern).

A wide and mysterious range of exemptions already exists in our legislation and presumably will now be carried over into the new system, but I envisage considerable confusion. Confusion at the port of entry, when it gives rise to arguments with customs officers, can lead to frayed tempers in rather unhappy circumstances, not to mention considerable queues building up behind as other people wait to go through customs. I hope very much, therefore, that the Minister has these problems in mind.

12.16 am
Mr. Andrew F. Bennett (Denton and Reddish)

I raised on a point of order the question of the report from the Select Committee on Statutory Instruments, and the Minister conceded, perhaps a little grudgingly, that he was prepared to meet the point that the Committee had raised; but he did not refer to the problem of the House having to scrutinise the order tonight, having only just had the report from Committee put before it. I accept that it is a very minor report, but I am concerned about the principle. It seems to me totally wrong that the Government should put an order down before scutiny by a Select Committee has taken place and before the Government can anticipate whether it will be an important or a minor report.

I simply ask the Minister to look at this problem. Repeatedly, the Chairman of the Committee, my hon. Friend the Member for Bradford, South (Mr. Cryer), other members of the Committee and I have argued that we should have the same Standing Orders in the House as in another place and that the Government should not be able even to put the order down until scrutiny by a Select Committee or a Joint Committee has taken place. If the Government are not prepared to accept that as a new Standing Order, however, it is incumbent on Ministers to try to ensure that instruments are brought forward by their Departments in a way which helps rather than hinders scrutiny by the House.

It is very odd that this set of orders came forward on, I think, 17 December, which makes it most difficult for the House to carry out its scrutiny. It seems to me that it was all done for the convenience of people in the Department, to get the order laid before Christmas, with no thought for the possibility of scrutiny by the House. I hope that the Minister will say that, in future, his Department at least will try to make sure that orders are not put down for debate in the House until scrutiny by a Select Committee has been completed.

12.19 am
Sir John Cope

As the hon. Member for Denton and Reddish (Mr. Bennett) said, the order was laid on 17 December. We would like to have laid it before the House earlier, but as he will probably know, negotiations on the single market continued until late last year, into December. That meant that we were unable to lay the order as early as we would wish. However, as soon as we could, we laid all the orders and others involving the single market, as we were anxious for them to be known about and in operation as soon as possible—on 1 January where possible.

The issue that gave rise to the worries of the Joint Committee on Statutory Instruments is—as I said, and as the hon. Member for Denton and Reddish acknowledged—a small and highly technical point on legislative drafting, about which there is room for disagreement. Had it been a significant issue that went to the heart of the order, I would have hesitated to lay it before the House until the matter had been cleared up. However, I thought that it was a highly technical issue. If it turns out to be necessary for us to correct it, we shall do so. Obviously, I hope that it is not—it is an abstruse point.

The right hon. Member for Berwick-upon-Tweed (Mr. Beith) spoke of the possibilities of confusion under the new arrangements. Any such major change is likely to cause problems for the public, and we have also had to carry out training for the customs officials and others to ensure that the new arrangements are understood. It will take some time for the public to take them on board.

We have produced and, I think, sent to hon. Members, a small guide for travellers that has been widely distributed on aircraft and by travel agents. It assists people with the changes. It is intended for the ordinary reader and does not go into nearly as much detail as the order on matters such as what one can bring to the UK after marriage, which is not necessary in such a leaflet. If the right hon. Gentleman or anyone else finds the categories listed in the order mystifying, I can assure them that, I think without exception, they are the same as before. They are almost identical to the previous categories. Most of us do not have cause to use the provisions at any time in our lives, let alone regularly, and I do not think that the measures will cause too much difficulty.

The right hon. Gentleman and the hon. Member for Oxford, East (Mr. Smith) drew attention to the staffing considerations that will arise. The remarks of the hon. Member for Oxford, East went much further than the review, and I cannot confirm his figures off the cuff. Clearly, considerable differences have been required in the deployment of staff by customs. I can readily undertake to keep matters under the closest review, particularly in the early stages of the single market— indeed, we are already doing so. As I have told the House before, we are determined to ensure that smuggling, bootlegging and the resale of goods brought back without UK duty having been paid are pursued with the utmost vigour of the law by all the customs officers that it requires.

Mr. Andrew Smith

I welcome the right hon. Gentleman's commitment. Will he add to that an assurance that he will appoint additional customs and/or excise staff should it appear necessary in the light of that monitoring?

Sir John Cope

Yes. The customs and the Government must determine how we define necessary, but we shall keep the position under review and see what we determine to be necessary in order to police such matters firmly. It is extremely important, particularly in the early stages, that we do our best to counter the opportunities for smuggling that might occur.

My hon. Friend the Member for Bristol, North-West (Mr. Stern) raised three points, starting with the definition of "normally resident" for the purposes of the order. He will find that paragraph 3 of the statutory instrument, No. 3193, to which he referred, sets out the rules for determining where a person is normally resident. They are not precisely the same as some in other parts of the taxing statutes, but those are the ones that apply in this case.

My hon. Friend also asked about the bringing into this country of property on marriage by people coming from other countries within the EC. The order deals with people coming from outside the Community. People coming from within the Community can bring with them, not only on marriage but at any other time, any property on which the normal duty has been paid within the country from which it is brought.

Mr. Stern

The point that I was making concerned not so much the ability to bring in property as the laudable provision in the order that property should be declared on being brought in. There is some concern that within the EC no such declaration will be required.

Sir John Cope

That is true. As far as I am aware, no such declaration will be required, because we are in the process of getting rid of the fiscal frontiers, so that people can travel as freely as possible from one part of the EC to another.

My hon. Friend also asked about instruments usually used by students, particularly computers. If he looks, he will find that that part of the order refers to instruments normally used by students, including calculators and typewriters, but it does not exclude computers. If a computer is regarded as the sort usually used by a student, I believe that it will be covered, but I shall check that. If necessary, on that or on the other technical points that my hon. Friend raised, I shall write to him. He kindly gave me the opportunity to do so, but I hope that I have given him sufficient answers on the points.

Question put and agreed to.

Resolved,

That the Customs and Excise Duties (Personal Reliefs for Goods Permanently Imported) Order 1992 (S.I., 1992, No. 393), dated 16th December 1992, a copy of which was laid before this House on 17th December, be approved.

Resolved,

That the Customs Duty (Personal Reliefs) (Amendment) Order 1992 (S.I., 1992, No. 3192), dated 16th December 1992, a copy of which was laid before this House on 17th December, be approved.