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House of Lords

Tuesday, 4th June 1996.

The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Bristol.

Conseil International du Sport Militaire

Baroness Perry of Southwark asked Her Majesty's Government:

    Why the United Kingdom is no longer a member of the CISM (Conseil International du Sport Militaire.)

The Parliamentary Under-Secretary of State, Ministry of Defence (Earl Howe): My Lords, the United Kingdom has not been a member of the Conseil International du Sport Militaire since 1952. Worthwhile membership of the CISM would require the UK to participate in, and on occasion host, a considerable number of formal events. Such a commitment would place a significant strain on manpower and financial resources. In keeping with the "amateur" ethos of sport in the services, the Armed Forces prefer to arrange fixtures with teams from other nations on an informal basis, within manpower and financial restrictions.

Baroness Perry of Southwark: My Lords, I thank my noble friend the Minister for his reply. Is he aware that the United Kingdom was a founder member of that council, which was formed at the end of the Second World War to celebrate peace through sport and to bring together the military of previously warring countries to join in sporting activities? Is he further aware that the membership of the council has now grown to over 120 countries? Is it not very sad that this country, whose record in peacekeeping is so superb, should not be involved in an activity of that kind?

Earl Howe: My Lords, I am grateful to my noble friend. I was indeed aware of the facts to which she alludes. Our decision not to participate in the CISM is regularly reviewed, most recently last year. So far, the three services have said that they prefer to allocate their time and their resources, both public and private, to other types of sporting event. Some of those events are international, with a particular emphasis on the Commonwealth. The clear message from the three services is that they would not wish those events to be put in jeopardy on account of any renewed commitment to the CISM.

Lord Howell: My Lords, does the Minister agree that this is one of those moments in time when professional sport in this country needs to encounter what the Minister quite rightly described as the "amateur ethos of sport"? Does he accept that it would be good for professional sport if the discipline and self-discipline found in Armed Services sport, which has made a great contribution to British sport over the years, were made readily available to some of our professional sports

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teams? In that sense, does he feel that the expenditure would be well worth undertaking, both for British sport and in terms of creating international good will and friendship between armed forces throughout the world who are our allies?

Earl Howe: My Lords, it is interesting that a member of the party opposite should suggest additional public expenditure. That said, I agree with the noble Lord about the value of sport and international contacts between the military. He may be interested to know that our services have participated in recent sporting events at varying levels with Australia, New Zealand, Canada, the West Indies, Thailand, South Africa, Zimbabwe and others. The cost of those events is met mainly from private funds. I recognise the force of some of the noble Lord's remarks, but there is a limit to the extent to which resources, both public and non-public, can be put.

Lord Dean of Beswick: My Lords, if the financial situation in which the Armed Forces find themselves operates against rejoining or participating in that organisation, why cannot they apply to the lottery fund for such purposes? It seems to be a hands-on grab for people in the know in the art world.

Earl Howe: My Lords, that is a very interesting suggestion. An approach to the lottery fund would have to be taken forward by individual units rather than by the MoD. I am not in a position to judge how such an approach would be viewed by the lottery board.

Lord Williams of Elvel: My Lords, is the noble Earl aware that until recently France has not wished to be a full member of NATO--not for some 30 years? Would he welcome France's full participation in NATO? In the light of the Question and in view of the Government's concern to cut the defence budget to ribbons, does he not feel that it would be an excellent gesture to ask France to sponsor our membership of the Conseil International du Sport Militaire?

Earl Howe: My Lords, I am willing to appoint the noble Lord as spokesman if he believes that to be a sensible way forward. I believe that a continuing issue of resources is involved. It is not simply a matter of money, though the sums are potentially significant; it is also a matter of manpower. CISM events would require individuals to be released from their units at what may be inconvenient times and the hosting of events would require considerable numbers of personnel to be made available.

Tobacco: Cross-border Shopping and Smuggling

2.43 p.m.

The Viscount of Oxfuird asked Her Majesty's Government:

    What is their estimate of the lost revenue in excise receipts due to (a) cross-border shopping and (b) smuggling of tobacco products.

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The Minister of State, Department of Social Security (Lord Mackay of Ardbrecknish): My Lords, Customs' estimate of excise duty revenue lost from legitimate personal importation of duty-paid tobacco products for the year ending 30th June 1995 is £120 million. Additionally, VAT receipts of £30 million are estimated to have been lost. Customs do not have an estimate of the extent of excise duty losses due to smuggling of tobacco products. They are working with the tobacco and alcoholic drinks industries with the aim of achieving an objective measurement of smuggling.

The Viscount of Oxfuird: My Lords, I thank my noble friend for that reply. Is he aware that one of the warehouses on the Continent of Europe situated near the ports in one week shipped 19 tonnes of tobacco out of its doors? Around 95 per cent. of that went to the United Kingdom, largely to the north east. Can my noble friend assure us that the statistics which are part of his study take into account the estimates of the retail tobacco trade, which calculate the loss to the Treasury due to smuggling and the evasion of tax on those products as being £1.6 billion?

Lord Mackay of Ardbrecknish: My Lords, as my noble friend is aware, there are really two aspects to his Question. One concerns the loss to the revenue from those people who buy products abroad and bring them into this country legitimately under the single market arrangements. In that regard I answered his Question in relation to excise duty and VAT. If one extrapolates that figure, for the same period it comes to around £200 million at off-licence prices for tobacco coming in by that route. Smuggling is much more difficult to ascertain. Smugglers tend not to put up their hands at the port and say that they are smuggling X amount of items into the country. It is a difficult issue and we are discussing with the industry how to quantify it. At the same time, we are attempting to prevent it.

Lord Bruce of Donington: My Lords, does the noble Lord think it wise to have made cuts in the numbers of Customs and Excise officers over the past 10 years, not only on account of this loss that has occurred, but also because of the losses that occur in undetected fraud in the case of export refunds and other matters of that kind?

Lord Mackay of Ardbrecknish: My Lords, deciding how many people should be employed in any agency--Customs and Excise, police or any other organisation--is a balance between the costs and the likely benefit from those costs. I can assure the noble Lord, Lord Bruce, that we take seriously excise verification in relation to the single market regulations. We have moved to a situation which is much more intelligence-based for the simple reason that the old-fashioned procedure, which I am sure the noble Lord, Lord Bruce, would prefer, of opening cases at random at ports is inefficient, especially when one considers that nearly 20 million people pass through the port of Dover in any given year.

Lord Clark of Kempston: My Lords, does my noble friend agree that this is a serious problem for small

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shopkeepers? They are losing a lot of trade because of the smuggling and cross-border transfer of goods. Does he agree that the smuggling takes place at such a rate because the duty on our tobacco is the highest in Europe and equivalent to 4.5p on the standard rate of income tax? Is it not time that we achieved harmonisation of taxation within the Community so that smuggling can be alleviated?

Lord Mackay of Ardbrecknish: My Lords, if the other countries in the European Union wish to harmonise their tax on tobacco products, I welcome that action. We impose the tax not only as a revenue-raising exercise, which it undoubtedly is, but also as a method of signalling that tobacco is a dangerous product.

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