Examination of Witnesses (Questions 1-19)
MR TERRY BYRNE, MR IAN MACKAY AND MR STEVE BRASSINGTON
MONDAY 22 APRIL 2002
1. Good afternoon, gentlemen. We are the Scottish Affairs Select Committee from the Westminster Parliament. We are at this point carrying out a short investigation into Customs and Excise. This morning we have been visiting Glasgow Airport, having a look at the operation there. We have already visited Orkney to see what the impact is of not having Customs officers on Orkney. We have not taken official evidence there but we have had a lot of representatives of the community before us and we have taken some of their concerns on board. Would you introduce yourselves? If there is any short statement you wish to make, please feel free to do so. We have a number of questions we would like to put to you and you will have an opportunity at the end if there is anything you feel we have missed. Please do not hesitate to come back with any short statement you want to make then. We will make a short report on this. For the sake of the record, would you introduce yourselves?
(Mr Mackay) My name is Ian Mackay. My former title was the Collector, Scotland. You may be aware that that changed just over a year ago. My official title now is Head of Business Services and Taxes for Scotland but I also act in a chairman role in Scotland across all the new functions which have been the way the Department has split itself up.
(Mr Byrne) I am Terry Byrne. I am the Commissioner for Law Enforcement in Customs. It is a national remit.
(Mr Brassington) I am Steve Brassington. I am Head of Detection for the north region. That includes Scotland, Northern Ireland and the northern parts of England.
2. What are the priorities for HM Customs and Excise law and enforcement activity in Scotland?
(Mr Byrne) The Department has set a number of priorities which includes class A drugs, tobacco or the more serious excise frauds, but particularly tobacco, and the major VAT frauds. In relation to Scotland, I think it is right to say that at the moment it is tobacco duty evasion and road fuel evasion. Behind that is alcohol.
3. Has that been quite a change?
(Mr Byrne) Tobacco has been a dramatic problem for us over the last three years and that has probably been the most significant change. Alcohol has risen and fallen through the 1990s. We are now seeing something of a resumption and we are taking a closer interest. Road fuel most certainly has become more of a headline concern for us. Class A drugs have been around for 30 years although the major class A problem in Scotland is more of a policing issue than a Customs issue primarily because the large quantities are supplied to Scotland from your unfortunate neighbour, England, rather than from overseas.
4. How much are you Treasury led rather than prevention led? How much of your operation is now more or less led by the amount of money that is being lost in revenue from cigarettes and alcohol?
(Mr Byrne) I do not think the degree of leadership from the Treasury or from our social responsibilities has significantly changed. The Home Secretary has asked a similar question: are we putting a lot more attention these days into tackling the Chancellor's interests, tobacco and excise duties, at the expense of, say, class A activity. Truthfully, no. Our drugs effort has not suffered as a consequence of our increased attention on excise frauds, principally because the government two years ago funded additional effort against tobacco in particular. We have always had the split role of bringing in the money for the Treasury whilst at the same time exercising our social responsibilities. I do not think the balance has significantly altered.
5. Given your role as the line of defence at ports of entry, how do you see your role in relation to control of illegal meat imports and where does that come in your list of priorities?
(Mr Byrne) It is rising reasonably rapidly up our list because of close ministerial interest and DEFRA interest in what we can do for them. We have been in discussions with counterparts in that agency for some time. The Secretary of State for DEFRA has also taken a close interest in this area. We are still in the process with them of developing what we think is a sensible response at the frontier end. There is not a single solution to the meat problem. The extent to which border controls do play an effective role in tackling the meat problem is one we have to nail down very carefully. Where the real reason for a control is a prohibition, where the effectiveness of the prohibition is the degree to which you are successfuldrugs is a case in pointyou do not totally fail because some drugs get through and therefore we can be considered successful depending upon the proportion we take out. One real problem with health controls is it only takes one consignment to destroy the whole effectiveness of the activities. That is the issue which we are trying to expose between ourselves and DEFRA, looking to see how we can raise the game collectively because there is not a single solution to it. In an announcement allied to the Chancellor's Budget speech last week, it is plain that Customs has been allocated some additional resources, some of which will be used for some frontier activity.
6. You are the lead agency in this, are you?
(Mr Byrne) We are not the lead agency tackling meat. It is one of those unfortunately complex areas. The leading agency is the former MAFF, now DEFRA. There is a combination of agencies. DEFRA set the policy and has both an inland and a frontier interest. Port Health Authorities exercise some inspections of meat and suspect meat as well as regulatory controls at the frontier. What Customs provides is some expertise in targeting risk consignments. To us, because of the range of functions that we look at, we are a bit less concerned about what is in a container than whether there is something innocent or guilty. That could be meat; it could be drugs; it could be people. We do not have the power to explicitly look for unhealthy meat. It is the nature of the legislation as it is framed. That is being considered along with the extent to which we and DEFRA can work more closely.
7. There are many perceptions about Customs and Excise at the moment and part of that is that you are not in the numbers you used to be and you are not seen on the ground as much as you were. Has a lot of this to do with boot legging and the amount of running about you have to do for that? Perhaps you could talk about the resources that you have with the Customs and Excise and how they are used.
(Mr Byrne) I do not think it is to do with boot legging, by which Customs mean the white van trade. The much bigger excise fraud area for us is the major criminals who are smuggling in containers rather than boot legging. Boot legging gives a romantic, Robin Hood approach to them which is what we try to dismiss. It is a relatively small part of the problem. More significantly, which is what leads people to ask whether we are around as much as we should be and whether we are as evidently on the ground as we should be, is the change to intelligence led, selective and flexible deployment. We are convinced that it is much more effective but we have to recognise that there is an element of public presentation about this. Seeing a Customs officer in uniform at a border post is part of the deterrent effect. Getting the balance right is extremely difficult.
8. Do you feel you have enough resources to do the job? Do you feel you do a good job or do you feel you should do a better job?
(Mr Byrne) I suppose a law enforcement officer could always see a way in which you could do more. Over the last two years, the government has backed the Department and provided more resources where we have identified a particular problem. With tobacco, £209 million over three years was a very substantial increase. Last week, the Chancellor announced around £40 million for the first year, very substantial backing. We are at the moment in the middle of preparing for the SR2002 round where the adequacy of Customs resources will be looked at. When we talk about resources, all too often we in the Department tend to think about people on the ground; whereas the Department has put a huge investment into IT and the potential for step change, effectiveness, is in the provision of that. Taken across the piece, others will judge whether we have done well enough and whether we have the resources to do well enough. I do not think at the moment that a particular change in the level of resourcing is going to make a significant difference. It is how effectively we use what we have.
9. Do you think Rosyth might make a big difference to you?
(Mr Byrne) Nationally, the answer ought to be no, unless the opening of Rosyth means a marked increase in the overall level of UK trade, which is a bit unlikely. In Scotland, of course it will make a difference. It will present a particular challenge which we have not had to face in Scotland for some time, a regular ferry. We know the cross-Channel and cross-North Sea ferry routes are a smuggling problem. It will make a difference and we are geared up to respond to that.
10. Can I pursue the issue on Rosyth? You have told us you are prepared for the Rosyth/Zeebrugge ferry. As I am one of the MPs for a neighbouring constituency, I am concerned about the consequences of that ferry in terms of possible Customs and Excise enforcement. Can you tell us more about what you are doing to prepare for the Rosyth/Zeebrugge ferry later this year?
(Mr Byrne) My managers in Scotland have been in touch with Superfast Ferries. We have done an initial analysis and assessment of the expected movements both of accompanied and unaccompanied freight vehicles and passengers to establish the overall workload. That is the first thing. The second thing that we are about to do is to look more closely at the expected trade. Superfast Ferries have a fairly clear idea of the nature of the people and goods and traffic that is going to come within that overall package. It will give us an opportunity to identify what we think is the real threat as opposed to a possible risk. We have looked at the initial resourcing consequences of opening up there. The managers in Scotland have identified that it roughly requires between 25 and 30 of our officers. We will revisit that in the light of practical experience. The managers in Scotland believe that the flexible way in which they are using the resources in Scotland, in the detection area in particular, means they can resource that satisfactorily at the outset.
11. What percentage is 25 to 30 of your total operational staff availability in the region?
(Mr Byrne) The detection staff in Scotland are roughly of the order of 150 staff. I would not want to be absolutely precise because every time I am asked the question the number varies by two or three.
12. You are talking about 20 per cent of your operational staff who are going to be required once a day to effectively police the ferry arriving from Zeebrugge. I understand that the overall staffing complement is not going to increase throughout the entire region. It seems to me that what is recognised as a possible, major threat which roro ferries are recognised to be, a major source of smuggling and other illegal imports, it does not seem to me that such a major call upon your resources can be met without extra staffing or alternatively knock-on effects elsewhere in Scotland which could be extremely damaging.
(Mr Byrne) I do not think that is right. Circumstances will tell whether I am right or wrong in a few months' time if we find evidence that we are being overwhelmed by what is happening there. However, one, the ferry is only in once a day at the outset. That is not a full shift's worth of activity. Probably, it is about four hours' worth of activity at most. I think you have met Dave Clark, one of my very best managers throughout the country. He has looked at the flexible use of the existing resource that he has and there are some inefficiencies. You can never get a totally efficient circumstance when you are deploying. They are in the wrong place; the flights come down at the same time. There are sometimes conflicting priorities. However, Dave is entirely satisfied at the outset, without damaging high risk activity, that he can resource the needs at Rosyth. There is an assumption that every day requires the same level of resourcing. That is quite wrong. In attacking the high risk, Dave has the capacity to put 50 or 60 people at Rosyth on any one day if he wants to. He has the capacity to leave a ferry where they have examined what is coming and do nothing about it. With selective attack, one can target adequately. Steve runs the whole of the northern command. I forget the exact figure but we have somewhere around 700 people with regional and access to national strike force. As appropriate, we could target the Rosyth ferry according to how we perceive the changing threat. Also, you are focusing on the number of people. That is what we do as managers, but it is going to get a high attention from our scanner activity. It is going to get considerable intelligence activity. One of the keys to this is the extent to which we get advance information on what is on the ferry. One of the big advantages of this ferry is it is going to take about 16 hours from Zeebrugge to get here. That gives us a lot of time to do the kind of checks which we need to do to decide the extent to which there is a real risk on any one ferry.
13. I accept what you say but, if you can allow for four hours out of every 24, 20 per cent of your operational staff in Scotland to be dedicated to work on this particular ferry, something must be suffering elsewhere or alternatively there are a lot of people not doing much. This cannot but have a negative effect on the rest of the service, surely?
(Mr Byrne) If the extent to which the rest of the current activity is suffering is because we are attacking low risk and relatively low risk activity, it is not a serious problem for us. If we look at the use of the resources across Scotlandand this is in no way a comment on the performance of our staff; the performance of our staff over the last 12 months in Scotland has meant that it has trebled its results in some areas and increased by 30 and 50 per cent in other major areas and it is testament to the excellence of their performance. Putting that aside, nonetheless, because of the nature of the traffic, the nature of the work and the difficulties of not having spare time to tackle lower risk activities, the productivity in a number of areas is lower than it is in other parts of the country. The number of cigarettes seized per staff hour, from the resources here for example, are 643. Across the country, it is 10,000. It is not their fault but of course our staff at times are being deployed on low risk activity, not because they are ignoring high risk activity but, because of the peaks and troughs, that is what we are doing. This will enable us from the outset to target our resource at what will be undoubtedly a relatively high risk for Scotland, if not for the wider UK. You are right. Of course I am taking that resource from somewhere else in the detection area but what we are expecting to do is to take it from areas where staff are not being adequately productive at the moment.
14. Did you say there were 150 people involved?
(Mr Byrne) In detection.
15. What are the numbers for the year previous to that? Have they changed at all?
(Mr Byrne) Not at all.
16. When did they last change?
(Mr Byrne) It goes back before my time. Last year, the actual resource in detection was the same as the previous year. It did include some staff which we had transferred from other activity into detection, although to some extent they were carrying out some of the same work. The figure was 153. Through the 1990s, there were reductions in the numbers of staff in Scotland.
17. To what extent?
(Mr Mackay) My memory is that there was very little overall reduction. Partly, the problem is that this is the most major restructuring we have gone through recently. As we have gone along, there has been different structuring along the way. What happened before was, under the banner of Customs, we had what was called antismuggling, which became detection, and you had Customs which became Customs Freight, International Trade. Overall, it is very difficult to look at like on like. By and large, if you are asking me, there has been very little change in the VAT staffing as far as assurance staff. There has been very little by way of antismuggling change. Excise went down dramatically but last year it increased by roughly about 45. What we have changed over recent years is that the concentration has been getting rid of the numbers of support staff, trying to put them into front line activity. What Mr Byrne was talking about there was that we had staff who were called passenger services. At that time, they were the staff who worked on the red channel in the terminals who purely took the duty if someone came up with an extra bottle or carton. We decided that they were not productive doing that and they were switched to detection. The Customs staff who were doing the freight then did passenger services, so there was a slight increase of transfer of staff to detection.
18. There is no increase in staff because of Rosyth? You are going to redeploy people to cover Rosyth? That is what you said.
(Mr Byrne) I think I said at the outset there was no increase in staff because of Rosyth.
19. If you found a lot of smuggling activity at Rosyth, would you reconsider that position?
(Mr Byrne) Of course. We resource the risk these days. Risk is not quite the right word. Risk is something which is possible and therefore you resource everywhere. We resource the threat which is a proven risk, if you like. If we demonstrated that at Rosyth there were the kinds of problems which may emerge, we would supplement the resourcing there. I would also need to have a look at the fact that this might not be entirely new traffic. If what has happened is that a significant amount of this traffic has moved from Hull, for example, we will need to look at the distribution of resources between the Hull and Humberside area and it would not just be focused on Rosyth; it would be resourced for this area of Scotland.