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29 Oct 2002 : Column 693W—continued

Aggregates Levy

Mr. Beggs: To ask the Chancellor of the Exchequer (1) what assessment he has made of the causes of the change in aggregate sales since April; [77346]

John Healey: It is too early to assess the impact of the levy.

No estimate has been made of the total weight of aggregate brought across the border from the Republic of Ireland to Northern Ireland without payment of aggregates levy since April. Aggregates levy is due at the point of first commercial exploitation in the UK and not at the point of import. Where it cannot be demonstrated that aggregate is from a levy-paid source, Customs will use their powers to recover the revenue due and impose penalties, where appropriate. The resources allocated to administering the levy in Northern Ireland take account of issues associated with the land boundary, and this resourcing will be subject to regular review.

The revenue forecast for the aggregates levy is made for the UK as a whole, and is not available by devolved region; therefore, data on the aggregates levy revenue raised in Northern Ireland are not available. In total, the levy is forecast to raise #0.2 billion during 2002–03.

Budget 2002

Mr. Howard: To ask the Chancellor of the Exchequer pursuant to the answer of 7 November 2001, Official Report, column 256W, and the assumption specified in paragraphs 2.30 and 2.52 of Budget 2002, what further assessment he has made of the start date for the current economic cycle, for the purpose of calculating the cyclically adjusted budget surplus or deficit; and what the calculations are on which that assumption is based. [77373]

Mr. Boateng: The Treasury's methodology for assessing the economic cycle for the purpose of calculating cyclically-adjusted budget surpluses or deficits is set out in publication XFiscal policy: public finances and the cycle", HM Treasury, March 1999.

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An updated assessment will be provided in the forthcoming pre-Budget Report.

Credit Unions

Mr. Love: To ask the Chancellor of the Exchequer what discussions he has had with (a) credit unions and (b) financial services organisations regarding the establishment of a central services organisation for credit unions; and if he will make a statement [78078]

Ruth Kelly: Treasury Ministers have had a number of discussions with representatives from the credit union sector and financial services organisations regarding the establishment of a central services organisation since the idea was proposed by the Credit Unions Taskforce in November 1999.

The Government believe that credit unions have an important role to play to encourage the accumulation of savings and help tackle financial exclusion. We continue to liaise with the movement and develop proposals to support its development. The establishment of a central services organisation is a project for the credit union movement to take forward. We understand that the Association of British Credit Unions Limited (ABCUL) is developing new plans to deliver some of the services that could have been provided through a central services organisation.

Cross-channel Smuggling

Mrs. Lawrence: To ask the Chancellor of the Exchequer what action is being taken to tackle cross-channel smuggling; and if he will make a statement. [78321]

John Healey: Tobacco smuggling grew very rapidly in the late 1990s until, by 2000–01, over 20 per cent. of the cigarette market was illicit. The cost of that tobacco smuggling to UK taxpayers was #3.5 billion. A further 6 per cent. of the market was legally non-tax paid product bought abroad and brought back for own use.

The great majority of cigarette smuggling is undertaken by serious and organised criminals who conceal large volumes of cigarettes in excess of 1 million at a time in freight consignments. In 2000 a smaller proportion was smuggled by cross-channel passengers. However in that year the total cost of such passenger excise smuggling was still #1.7 billion.

Had no action been taken over the past two years Customs and Excise estimate that the illicit share of the cigarette market would have reached 31 per cent. by the end of March 2002.

Since the launch of the Tackling Tobacco Strategy in March 2000, Customs and Excise have been successful in containing growth in the illicit cigarette market, disrupted over 100 organised crime gangs responsible for the vast majority of the smuggling, and have had dramatic success in cutting losses from cross-channel passenger smuggling by almost three-quarters. Figures for 2001–02, the second year of this strategy, will be published at the time of the pre-Budget report and I anticipate they will show that the strategy remains on track. In the same period consumer expenditure on legitimate cross-border shopping for alcohol and tobacco has grown by 10 per cent.

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In 2000–01 Customs seized 2.8 billion cigarettes. Of these, 0.9 billion were seized overseas through the work of the Customs Overseas Liaison Officer network, a further 1.2 billion were seized in freight consignments, 400 million were seized inland and 55 million were seized at the ports from cross-channel passenger smugglers.

The sole focus of Customs excise enforcement activity in respect of cross-channel passenger traffic is to tackle those who smuggle tobacco or alcohol, having received or intending to receive money or money's worth for those goods. The Government have consistently made clear that people are entitled to bring into the UK without liability to tax as much EU tax-paid tobacco or alcohol as they wish for their own use. Customs literature also makes this clear.

Just one-tenth of 1 per cent. of those who have crossed the channel in the past two years have had tobacco or alcohol seized by Customs. Since the start of the strategy, the average quantity seized by Customs from cross-channel passenger smugglers was approximately 4,900 cigarettes and 15 kilos of hand rolling tobacco (equivalent to at least 18,000 cigarettes).

Of the 0.1 per cent. of cross-channel passengers who had tobacco or alcohol seized in the years 2000–01 and 2001–02 over 75 per cent. chose not to make any sort of appeal against that seizure. Of those that did appeal, magistrates courts overwhelmingly backed the judgments made by Customs, and found against Customs in less than 0.1 per cent. of cases, and only 1 per cent. of cases were either overturned or restored by a Customs review officer or by an independent tribunal.

Building on the success of the Budget 2000 anti-smuggling measures, I am today announcing the next stage of the Tackling Tobacco Strategy. Despite cross-channel tobacco smuggling having been cut by around three-quarters in the past two years, smugglers are becoming increasingly sophisticated in their attempts to blend in with honest shoppers. So the measures I am announcing today will help make the distinction between smugglers and honest shoppers even clearer. The measures make clear that Customs activity is legal and fair but tough upon those who attempt to smuggle. It comprises the following components:

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