in the first session of the fifty-second parliament of the united kingdom of great britain and northern ireland commencing on the seventh day of may in the forty-sixth year of the reign of





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House of Lords

Monday, 30th June 1997.

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

Prayers--Read by the Lord Bishop of Lichfield.

Russia-Estonia Relations

The Earl of Carlisle asked Her Majesty's Government:

    What steps they will take to persuade the Russian Secretary of State for Foreign Affairs, Mr. Primakov, to sign the negotiated border treaty with Estonia.

Lord Whitty: My Lords, we welcome the recent agreement between Russia and Estonia to establish a joint commission. We and our European partners will continue to take every opportunity to urge the Russians and Estonians to take further steps towards normalising relations, including the signature of a border agreement.

The Earl of Carlisle: My Lords, I thank the noble Lord for his reply. The noble Lord is no doubt aware that the document in relation to the treaty has been awaiting signature on Secretary of State Primakov's table for the last eight-and-a-half months. Will the noble Lord request the Secretary of State for Foreign and Commonwealth Affairs, the right honourable Member for Livingston in another place, to urge Secretary of State Primakov, when he next sees him, to sign the document as speedily as possible? Will he add that any further delay or prevarication would be counterproductive to the interests of the Soviet federation?

Lord Whitty: My Lords, my right honourable friend the Foreign and Commonwealth Secretary met Foreign Minister Primakov on the fringes in Denver, at which

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time relations with the Baltics were raised. Moreover, he is intending to visit Moscow some time in July. I shall certainly ensure that he bears in mind the issues which the noble Earl raised. A border agreement between Russia and Estonia would be a major contribution to normalisation and peace in the Baltic area.

Lord Chesham: My Lords, what are the implications of delay over the border treaty between Estonia and Russia for Estonia's integration into the EU? Will the Government give an assurance that Estonia's application will be judged on the objective criteria laid down by the European Council in Copenhagen in June 1993 and that, therefore, any decisions will reflect the impressive transformation of Estonia's economy, legislative harmonisation and democratic institutions rather than the geopolitical situation?

Lord Whitty: My Lords, I can indeed give the noble Lord that assurance. As he says, both administrative and economic progress in Estonia have been impressive. Its application to join the EU will be considered on its merits. As the noble Earl and other noble Lords know, there will be a Commission opinion on the Estonian application and others in July.

Baroness Chalker of Wallasey: My Lords, have all Russian troops and other Russian placemen now left Estonia? Will there be some means of making sure that they do not re-enter Estonia in the new relationship which is being developed with Russia?

Lord Whitty: My Lords, I am sure that the best means of ensuring that there is no military action on the border between Russia and Estonia is to reach agreement on the border issue. The Russian troops are reported to have left, but I am not sure that I can give a totally unequivocal answer in relation to placemen. However, as part of the general normalisation of arrangements, one would hope that those matters can be

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discussed bilaterally between the Russians and Estonians. We and our European partners will ensure that that happens.

Whisky: Excise Duty Evasion

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 Haringey: My 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 Croy: My 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 Haringey: My 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 Ardbrecknish: My Lords, I welcome the noble Lord, Lord McIntosh, to Treasury Questions and again ponder on the whereabouts of the noble Lord, the Minister--

Noble Lords: Here!

Lord Mackay of Ardbrecknish: My 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,

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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 Haringey: My 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 Croy: My 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 Haringey: My 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.

Prisons: Identification of Visitors

2.46 p.m.

The Earl of Longford asked Her Majesty's Government:

    Further to the Answer given by the Baroness Blatch on 13th January 1997 (Official Report, col. 17), whether they are yet in a position to inform visitors to prisons exactly what forms of identification are now required.

The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn): My Lords, the Prison Service will publish a revised security manual

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at the turn of the year. A draft is currently being considered by governors. The manual will specify exactly what type of identification is acceptable and this will be given wide publicity. In the case of noble Lords, the House identity card will be sufficient to gain entry.

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