§ 2.40 p.m.
§ Lord Campbell of Croy asked Her Majesty's Government:
§ What action they are taking to stop the resale to retailers in Scotland of whisky which has been falsely declared as for export, and which has been purchased in bond with no duty paid.
§ Lord McIntosh of HaringeyMy Lords, this is not a problem peculiar to Scotland. Most whisky is removed or sold and, I presume, consumed outside Scotland. Under the spend to save initiative, HM Customs and Excise has allocated 130 extra staff who work closely with intelligence staff and use European mutual assistance to tackle excise duty evasion. Combined operational groups work with the trade better to control movements. That is spearheaded by 12 trained investigators dedicated to excise duty evasion cases. That has already closed several illicit outlets.
Lord Campbell of CroyMy Lords, I am grateful to the noble Lord for his encouraging reply. Is he aware of reports in the Scottish press that such fraud has increased alarmingly recently because there are now fewer physical official checks within the European single market? Will the Government intensify the efforts which the noble Lord described to end that illegal racket since it is damaging not only to the Scottish whisky industry but to British taxpayers as a whole?
§ Lord McIntosh of HaringeyMy Lords, I have seen the article in the Scotsman, to which the noble Lord refers. I believe that elements of it are somewhat alarmist and none of us can know the full extent of evasion. However, the noble Lord is right in saying that since 1st January 1993 single market restrictions have made it impossible for us to continue some of the border controls which were then in existence. That is why the attention to which I referred in my first Answer is being given to intelligence work and to controls within the country.
§ Lord Mackay of ArdbrecknishMy Lords, I welcome the noble Lord, Lord McIntosh, to Treasury Questions and again ponder on the whereabouts of the noble Lord, the Minister—
§ Lord Mackay of ArdbrecknishMy Lords, perhaps the noble Lord, Lord McIntosh, will explain why the Minister, whom I am happy to see, is not answering for the Treasury.
Did the noble Lord read in last week's newspapers the report of a trial at Southwark Crown Court in which three so-called businessmen were sent to prison for six, 4 three-and-a-half and five years for the most amazing bootlegging scam? It involved removing alcohol, including whisky, from bond and ostensibly taking it abroad. But in fact they took it to a warehouse in Paisley where it was split up and sold to cash and carry centres. Does the Minister realise that that costs the public purse £20 million? While I am gratified by the judge's sentences, I wonder whether he insisted that the obvious wealth that the businessmen created from the scam was taken away from them and returned to the public purse.
§ Lord McIntosh of HaringeyMy Lords, I am grateful to the noble Lord for his welcome to Treasury Questions. My noble friend Lord Simon of Highbury is the Minister for Trade and Competitiveness in Europe in both the Department of Trade and Industry and the Treasury. His responsibilities are focused mainly in the DTI and he will speak in the House on DTI matters as DTI Minister. Treasury business will be handled by me.
As regards the noble Lord's substantive question, it is correct that there have been a number of successful prosecutions—one being reported in The Times as recently as Saturday last. It is gratifying to see that such convictions are being obtained. I doubt whether the money is recouped from those who are sent to prison. I wish that it were.
Lord Campbell of CroyMy Lords, can the Minister confirm that whisky released from bond is secretly held by the crooks concerned in warehouses in England before being returned to Scotland? Is he aware that much harm can be done to distilleries, more of which are concentrated in the area of my home in northern Scotland than anywhere else in the world, although unfortunately for medical reasons I cannot drink their excellent product?
§ Lord McIntosh of HaringeyMy Lords, I am very sorry to hear that. Diversion—that is the technical term—means that spirits are released from bonded warehouses without duty being paid, it being claimed that they are being exported. That takes place in both England and Scotland, and I shall not distinguish between the two countries. It is a serious problem and requires blatant fraud in the falsification of receipt documents from other countries. It is a problem which Customs and Excise is determined to tackle.