HC Deb 25 April 1994 vol 242 cc69-73 6.59 pm
The Paymaster General (Sir John Cope)

I beg to move, That the Travellers' Allowances Order 1994 (S.I., 1994, No. 955), a copy of which was laid before this House on 29th March, be approved. The order applies to duty-free goods for travellers arriving from outside the European Union. I hasten to make clear straight away that it does not apply to cross-border shopping in other European Community countries for tax-paid goods, or to purchases made in duty-free shops on journeys in the European Community.

The order does a number of things, but most importantly it implements the increase in what is known as the other goods allowance for travellers arriving in the United Kingdom from outside the Community. That allowance is for goods other than tobacco, alcohol and perfumes, for which specific and unchanged quantity limits exist. The increase in the other goods allowance from £36 to £136 was set in train by the United Kingdom during our presidency of the Community and was agreed eventually by member states at the Economic and Finance Council on 25 October 1993 to come into force on 1 January 1994.

There was a need for the European Parliament to be consulted and, as a result, the necessary European Community legislation did not go through fully until March. Therefore, Customs and Excise introduced the increase by extra-statutory class concession on 1 January 1994, so that travellers could benefit as soon as possible from the extra allowance in anticipation of the Community legislation.

We are also taking the opportunity to simplify allowances for the crews of ships and aircraft by bringing them into line with those of travellers. We are also correcting a few small anomalies in the application of the allowances, which in fact go back to before the United Kingdom's entry into the European Community. Those will finally bring us fully into line with European Community law, but will marginally restrict the relief.

In the first place, we are withdrawing relief from payment of duty and tax on part of an item with a value exceeding the allowance, or an item that pushes a group of items over the limit. We are also disallowing groups of people from aggregating their allowances to obtain relief on a single item of a value exceeding an individual allowance. I do not think that those changes will have a large impact because, of course, there is a large increase in the allowance itself—from £36 to £136—which will supersede that impact. In contrast, all travellers will benefit from the increased allowance.

The order also withdraws the entitlement to allowances from the crews of vessels and other travellers who do not land anywhere outside the European Community during the course of their journey. That will affect only a small number, such as the crews of some fishing vessels; those who visit a country outside the Community will, as I have said, benefit from the full travellers' allowances, with an increased, alcohol allowance, as well as a significant increase in the other goods allowance. We have also taken the opportunity to consolidate the legislation on such matters. If one consults the order in detail, it is apparent that we are repealing no fewer than 11 orders, which were passed over a period of 25 years, and replacing it with the single order.

No doubt hon. Members will have noticed the note on the Order Paper to the effect that the Select Committee on Statutory Instruments had not yet completed its consideration of the instrument at the time when it was put on the Order Paper. The Committee sought clarification of the explanatory note to the order, which mentioned travellers who land outside the European Community. It should, of course, have mentioned those who have travelled from outside the Community. There may be some who were born outside the EC and come here for the first time and therefore cannot be regarded as landing outside the EC and then returning.

That point made by the Select Committee on Statutory Instruments is obviously correct. We shall amend the explanatory note by means of a correction slip. When it is reprinted, if that should be required, we shall amend it in the text. That does not affect the order, which is, of course, drafted correctly as intended and as I have just described.

7.4 pm

Mr. Andrew F. Bennett (Denton and Reddish)

The note on the Order Paper states that the Select Committee on Statutory Instruments has not yet completed consideration of the statutory instrument. Since 1987, and between 1979 and 1983, the person who almost always got up in the Chamber to draw attention to the fact that the Select Committee on Statutory Instruments or the Joint Committee on Statutory Instruments had not considered such orders was the late Bob Cryer.

A large number of hon. Members have paid tribute to Bob Cryer as an active hon. Member in the Chamber and a man of very strong principles and have paid tribute to the way in which he worked for his constituents, but few people have paid tribute to the way in which he worked ceaselessly as a member of the Select Committee and the Joint Committee on Statutory Instruments. He was a member of those Committees for 13 years, 11 years as Chairman. He was always in the Chamber to draw to the attention of the House the fact that statutory instruments such as the one before us had not gone through the scrutiny process completely. Although it is a technical point and the Minister has cleared up the point that concerned the Committee, it would be remiss of me or any Committee member not to put on record on behalf of those of us who serve on the Committee our appreciation of the friendship and diligence that he demonstrated both in Committee and in reporting its concerns to the House.

Therefore, I hope that the House will place on record its debt to Bob Cryer, a parliamentarian with extreme concerns that he expressed not only in the Chamber, but in Committee where he worked extremely hard.

7.7 pm

Mr. Andrew Smith (Oxford, East)

May I begin by strongly endorsing the warm tribute that my hon. Friend the Member for Denton and Reddish (Mr. Bennett) has paid to Bob Cryer—his work, his diligence and his energy in dealing with statutory instruments, as in other areas to which he brought his marvellous skills as a parliamentarian which we all greatly admired and so greatly miss. I thank my hon. Friend for paying that tribute, which I am sure is shared by all hon. Members.

The order is pretty uncontentious: I have neither received any hostile comment, nor seen any hostile comment in the press. As the Paymaster General has said, it increases duty-free allowances for excise and VAT purposes for travellers arriving from outside the EC to £136 from £36. The increase in allowances is welcome and, indeed, overdue. If anything, it is a pity that the allowances are not a little higher. I also note the extension of full allowances to aircraft and ship crews, which I dare say will be welcomed by those able to take advantage of them.

I have some questions and comments to put to the Paymaster General on the main change made by the order, which turns on the other goods allowance. First, what was the reason behind the withdrawal of the previously available offsetting facility to which he referred, which allowed relief on part of a more costly item? Does the withdrawal mean that someone arriving in the United Kingdom from outside the European Union with, for example, a camera costing more than £136—his only overseas purchase—would have no duty-free allowance? That seems to be the implication to be drawn from the order. That does not seem very fair.

Secondly, we are to see the ending of the practice of aggregation whereby family groups could pool their allowances against a single more expensive item. Perhaps the right hon. Gentleman will explain why the practice is to be brought to an end. He said that he did not think that it would cause too much difficulty because the level of the allowance is to be increased. He did not, however, provide any justification for the ending of the aggregation. Surely it is a facility which should be kept rather than dispensed with.

Thirdly, I take up the news release issued by Customs and Excise on 6 April, in which it is explained that the crews of a relatively few vessels—mainly Royal Navy and fishing boats, but also other travellers such as rig workers, who do not land anywhere outside the EC—will no longer be entitled to travellers' allowances. I hope that the Paymaster General will explain exactly who will be affected by this provision and why the present conditions have been changed.

The news release tells us that the changes will affect only a few vessels and other travellers. Bearing in mind that the new provisions bear on travellers working in hazardous occupations, it seems rather petty to take away a small but no doubt welcome compensation in the form of allowances.

Fourthly, the news release states: The practice of allowing an additional two litres of still table wine as an alternative to one litre of spirits or liqueurs over 22 per cent. volume or two litres of fortified sparkling wine or other liqueurs is withdrawn. Is that not rather petty and somewhat ridiculous, given the millions of litres of still table wine now entering Britain, with low or no duty paid, from within the European Community? What is the justification for the change?

Fifthly, what steps are being taken by Customs and Excise, and carriers, to advise travellers of their allowances and prospective rates of duty when they are making their outward journeys from the United Kingdom? After all, one of the pleasures of overseas travel is the opportunity to shop for different goods at different prices from those generally available here. It would be a good idea to advise people in advance about the rules and duties applicable on their return. Perhaps a leaflet should be printed setting out some examples. I am sure that the Paymaster General will let me know whether such advice is being made available and, if not, whether it could be encouraged.

Sixthly and finally, I cannot help noting that under the terms of the European agreement, from which the order originates, Germany was able to retain its existing limits for visitors entering from Poland and the Czech Republic. That would seem to contradict the principle of a common European policy. It will raise interesting issues if and when Austria and Finland join the European Community. I dare say that similar pressures will arise from the attraction of cross-border shopping elsewhere in central and eastern Europe.

The German Government's achievement in getting some measure of protection against the attractions of cross-border shopping on Germany's external European Union frontier stands in interesting contrast with Britain's inability to do anything about the haemorrhage of business in drink and cigarette sales from the United Kingdom to France on our internal European Union frontier. I know, as the Paymaster General stressed, that that has nothing to do with the order, but it is worth drawing attention to the German Government's success in securing a measure of protection on their external frontier.

I do not understand why people crossing from Poland to Germany should be subject to different rules from those that apply to people crossing from Croatia into Italy or from Bulgaria into Greece. I shall be grateful if the Paymaster General explains why the German exception is justified.

The Opposition do not intend to oppose the order. However, as I have said, I shall be grateful if the Paymaster General chooses to respond to my questions.

7.15 pm
Sir John Cope

First, I add to the tribute that the hon. Member for Denton and Reddish (Mr. Bennett) paid to Bob Cryer, our former colleague. I knew Bob Cryer for a long time. From my experience at the Dispatch Box and in other capacities—I was in the Government Whips Office for many years, for example—I am aware of the excellent work that he did for the House, especially in the Select Committee on Statutory Instruments. I know from practical experience how difficult it is to find Members prepared to serve in some of the more complex areas of legislation and to undertake the difficult and detailed work involved in dealing with abstruse orders—especially in the context of European legislation—which come before us. There is no better example of someone who did that than Bob Cryer.

As the House will know, Bob Cryer was one of my predecessors for he was a Minister with responsibility for small firms. He was keen on steam trains and closely connected with the Keighley-Worth valley railway. All those interests endeared him to me, even if occasionally he made life a bit difficult or expressed opinions with which I did not agree.

The hon. Member for Oxford, East (Mr. Smith) asked several questions. He suggested, in what I am sure was a slip of the tongue, that there were increases in the excise allowances as well as in value added tax allowances. In fact, for ordinary travellers we have consolidated the excise allowances, but not increased them. It is the other goods that are affected by the main change set out in the order.

The hon. Member for Oxford, East said that the order was overdue. I entirely agree with him. We have been negotiating for some time to bring the order forward. The hon. Gentleman drew attention, perhaps inadvertently, to one of the reasons why it has taken so long to introduce the order. He talked about the problem that Germany has had with goods sold tax free for export finding their way back across the eastern border for sale in German markets. Eventually, the only way to resolve the problem was to agree to the derogation to which the hon. Gentleman referred.

The allowances are to be reviewed again in 1995. The hon. Member for Oxford, East said that they should have been a bit higher. We wanted them to be higher, and so did some other countries, but these matters are best agreed upon with the Community. The order reflects the agreement that we were eventually able to negotiate.

The hon. Gentleman asked about some of the small changes being made and gave the example of a camera. He is correct in his appreciation of the effect on travellers in the position that he described. He drew attention to aggregation and to the fact that crews of vessels that do not land anywhere outside the Community, though they may be at sea in international waters, will have their allowances withdrawn. The three points relate to the original European Community legislation, which was agreed before the United Kingdom became a member of the Community. It is right to come into line with that legislation by taking advantage of the opportunity presented to us. The offsetting and aggregation are matters of judgment. Is it better to have a rather higher allowance and no aggregation or to permit aggregation and have a lower allowance? That is a matter of judgment and I am prepared to agree to the system as it has existed in most Community countries, even before we joined.

With regard to vessels that do not land anywhere else, the provision applies to passengers—if any—of such vessels. There have been difficult cases of vessels that sailed outside territorial waters and passengers who had shopped for commodities then returned and avoided the duty on those goods. That is clearly not a practice which we would want to encourage, as it is a means of avoidance. We would not wish to set up arrangements that could promote such a possibility.

The hon. Member for Oxford, East asked how that change was being promulgated, particularly by the carriers and by Customs and Excise, for departing passengers. Posters, leaflets and official notices are available and are being distributed in departure lounges so that people can understand the position, if they wish to, before they leave for their holiday or their overseas visit. They will therefore be aware of the position when they return.

Question put and agreed to.

Resolved, That the Travellers' Allowances Order 1994 (S.I., 1994, No. 955), a copy of which was laid before this House on 29th March, be approved.