Select Committee on Treasury Minutes of Evidence


Examination of Witnesses (Questions 200 - 208)

WEDNESDAY 28 NOVEMBER 2001

MS DAWN PRIMAROLO, MP, MR MICHAEL HANSON AND MR DEREK HODGSON

  200. I am sorry to labour the point but if they were redeployed they must have been redeployed from one of these other areas, must they not?
  (Ms Primarolo) No,
  (Mr Hanson) The 146 are what we have already put into the system. That is what we have already done or we are in the process of putting them in. These strategies here are describing what we want to do next. The 146 were primarily redeployed from support functions in the Department.
  (Ms Primarolo) So we moved staff to the front line because that is where the risk was.

  201. Could I go back to the alcohol and tobacco fraud review, which started in 1997 and was published in 1998, where it was recommended that an additional 359 officers to combat fraud in the Excise duties were needed. That was the original recommendation in the draft report, but then it had been taken out by the time the report was finalised and published in July 1998. Was that an opportunity missed?
  (Ms Primarolo) The Department was in negotiation on its spending round and that is part of negotiation on that spending round as we went into the CSR in terms of what the bid from the Department would be to cover that area. So the report was published but clearly the future spending of the Department needed to be considered in the round with other priorities, both within the Department and across Government. That is what happened.

  202. There were increases at that time then, even though the recommendation was taken out?
  (Ms Primarolo) Yes, because we were acting to redeploy and looking at where our staff would be better used. You would expect the Department to be doing that constantly in its risk assessments about where it should best use its staff, and there was additional money at that time that was given immediately to deliver that.

  203. You reported yesterday in this paper that you have cut the revenue loss from cross-Channel smuggling by 76 per cent in one year compared with a target of 10 per cent. How is it that the target has been achieved with such a very wide margin?
  (Ms Primarolo) By the effective and efficient use of staff and procedures working correctly in developing the strategy.

  204. Could it have been that the targets were too low to begin with?
  (Ms Primarolo) Possibly, and that is exactly the point, and so when we look at targets, we look at what happened last year, what happened this year and therefore what should happen next year.

  205. There has been a record of this for the last five years of straw men being put up.
  (Ms Primarolo) I do not believe that the information that is now in these two documents in terms of the fraud estimates is anything but very rigorous. I accept, hence commissioning the report, that the practice of the Department over an earlier period needed more rigour than apparently was in place and had been in place since the emergence of the Single Market where the risks in this area were considerably increased.

  206. It is just that this appearing so recently rings bells that the practices have not changed very much from the ones that Roques commented on.
  (Ms Primarolo) In the sense that Roques would then be asking the questions that exactly you are asking, which of course the Department and the Minister would be too, that now is on the record to be scrutinised in a much clearer way, which previously it had not been. It seems to me you come back to the main point that Roques sought to make about putting in the checks and balances.

  207. Some press reports have suggested that the European Commission is not satisfied with the interpretation of personal use adopted by Customs and Excise for alcohol and tobacco purchases in the European Union. Have you received formal communications or complaints from the Commission on this?
  (Ms Primarolo) I understand that inquiries are being made and the Commissioner has said so publicly. This revolves around the issue of what are called the indicative levels which are set by the European Union and agreed at the time of the Single Market by our predecessors, which is the basis for the quantities that are roughly accepted as being for personal use. Customs go slightly wider than just using actual quantities carried. There could be reasons why, and there are many, people are bringing in more. Therefore, in helping to deal with what used to be called the white van trade, this has been a very important tool. Whilst the Commission is making inquiries, our view is that we are acting within the levels agreed back in 1993 and will say so.

  208. If we did need to come forward to the Commission, would that mean a relaxation of what is being applied at present?
  (Ms Primarolo) It is difficult to know exactly what the Commission might want because the indicative levels are agreed across Europe. We are operating within those. I am not fully conversant with the details of the inquiry. I admit that it is difficult to see how that can progress in terms of the activities, particularly at our ports and airports, of stopping people from bringing back quantities that are clearly for re-sale, as opposed to for personal use. I am sure you have seen reported in many places the exceedingly large amounts that some individuals carry, claiming that it is for personal consumption when they are within a certain time period, and it is, quite frankly, stretching credulity to believe that that would actually happen. The issue is one of activity within those levels. We are clearly within the agreement. We have to wait and see what the Commission has to say in the future.

  Chairman: Minister, we are going to leave it there today. We are obviously, like you, waiting for the Public Accounts Committee report, which will then reflect further on how we will report. It might be useful for you to know that we are minded to focus on the relationship between the Treasury and Customs and Excise. You are kindly replying to us on the point about Board minutes. There is an opportunity there, if you wish, to say anything further to us in your letter about that relationship. We will return to that particular aspect. Thank you very much for coming today.





 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 29 January 2002