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Lord Steel of Aikwood: My Lords, is the Minister aware that at least seven Members of your Lordships' House will be either hoping or expecting to be in attendance on the Sovereign at that occasion because they are standing for election to the Parliament? Is he aware that in some cases the expectation is greater than the hope and in others the hope is greater than the expectation? Does he accept that, whatever advance work is being done, no one can determine what the arrangements will be until the Parliament has met on 12th May and made its own decisions as to what will happen at the official opening on 1st July?

Lord Macdonald of Tradeston: My Lords, I am sure that the noble Lord is correct. As I said, discussions are in progress through the Opening Ceremony Working Group. Representatives on that body include representatives of the Palace, the military, the police, Edinburgh council, the consultative steering group, which has been influential in preparing for the new Parliament, and other interested bodies. I look forward to seeing a number of noble Lords in the Scottish Parliament. I am sorry that I am not standing myself, but I wish them well.

The Countess of Mar: My Lords, does the noble Lord accept that, as the holder of the most ancient peerage in the United Kingdom--which coincidentally happens to be a Scottish peerage--despite the length of my lineage, my mind is not cast in stone, going back to 1114?

Lord Macdonald of Tradeston: My Lords, I am delighted to hear that. I look forward to seeing as many noble Lords at the ceremony as can be accommodated, but we should be aware that the public space in the assembly hall in Edinburgh is restricted to fewer than

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500 seats. We believe that, with full consultation, we shall be able to achieve the appropriate balance at the opening ceremony.

Baroness Carnegy of Lour: My Lords, I am not an hereditary Peer, of course. Can the noble Lord tell the House whether the Peerage of Scotland is one of the interested bodies which the working group is consulting?

Lord Macdonald of Tradeston: My Lords, we are currently considering who should be invited to the opening ceremony. Clearly many groups and individuals will have a claim.

Baroness Carnegy of Lour: My Lords, if the noble Lord will forgive me, I asked whether the Peerage of Scotland was one of the interested bodies that the working group was now consulting.

Lord Macdonald of Tradeston: My Lords, in answer to the noble Baroness, I was going on to say that many groups and individuals with a claim will be invited. The Scottish Peers will be considered, along with the other groups. Although not everyone will be able to attend the ceremony, we expect to see many people in Edinburgh and across Scotland.

Lord Mackay of Ardbrecknish: My Lords, I congratulate the noble Lord on his baptismal outing in the past 15 minutes. Perhaps I may ask him when I may expect my invitation as a Peer who is not standing for election to the Scottish Parliament.

Does the noble Lord agree that it is important that we combine a modern parliament with some degree of pageantry and colour to show that this is a serious and historic event? Will he assure me that, whatever decisions are taken by the working group and transmitted to Her Majesty, it will be made clear, especially to the press, that Her Majesty will be attending at the request of the Parliament?

Lord Macdonald of Tradeston: My Lords, I can assure the noble Lord that all these matters are being given full consideration. We believe that the noble Lord's concerns for the historic organisation of the day will be fully met. The challenge is to balance the traditional elements with a forward-looking modern event that befits a new parliament and a new millennium. I stress that detailed plans are being finalised to try to achieve that; there is still opportunity to influence the outcome.

The Earl of Kintore: My Lords, I declare an interest as a Scottish Peer. Are the Government aware that the current Sword of State was deliberately broken for concealment purposes and, although now repaired, is still rather fragile? To celebrate the return of a parliament to Scotland, will the Government take the opportunity to commission a new sword from craftsmen living in Scotland?

Lord Macdonald of Tradeston: My Lords, I am sure that the noble Lord's suggestion will be taken into

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consideration by the Opening Ceremony Working Group. The sword looks fragile but rather splendid in its historical setting, which I think we owe to Sir Walter Scott for rediscovering it after the centuries during which it was lost.

Tobacco Smuggling

3.19 p.m.

Lord Jacobs asked Her Majesty's Government:

    In view of the success of Customs and Excise in detecting the illegal importation of hard drugs, what new measures are being taken to prevent the loss of £1 billion per year from tobacco smuggling.

Lord McIntosh of Haringey: My Lords, the Comprehensive Spending Review of July 1998 allocated Customs £35 million to tackle evasion of alcohol and tobacco duties, and this has enabled them to employ over 100 extra front line staff who will be operationally effective from 1st April. The Paymaster General announced after the Budget an independent evaluation of the strategy and measures deployed to tackle excise duty fraud and evasion and in particular the growing threat of tobacco smuggling.

Lord Jacobs: My Lords, I thank the noble Lord for his reply. Does he agree that HM Customs and Excise have been exceedingly successful in detecting hard drugs coming into this country where a packet the size of a packet of cigarettes may have a street value of several thousand pounds? Can he therefore explain why Customs and Excise have had difficulty in detecting what must be a convoy of 40-tonne trucks coming into this country loaded with tobacco?

Lord McIntosh of Haringey: My Lords, I do not believe it is true that Customs and Excise have been notably unsuccessful. The seizures in 1997-98 were valued at £76 million compared with only £29 million in the preceding year. One of the problems has always been that, for example, the illegal freight import of tobacco is not so easily susceptible to detection by sniffer dogs, although some have been trained for that purpose, and we do not yet have in place extra equipment at all ports to enable us to identify freight loads.

Lord Higgins: My Lords, should not Customs and Excise be congratulated on their actions in the detection of illegal drugs? But is it not the case that other European Union governments take a more schizophrenic attitude to the taxation of tobacco than do we who give priority to health? That being so, can the noble Lord inform the House whether the list of unfavourable tax practices that is being examined by the Paymaster General includes the taxation of tobacco?

Lord McIntosh of Haringey: My Lords, I do not understand what the noble Lord means by "schizophrenic". Perhaps at a later time he will explain to me his use of that word. The list to which the noble

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Lord refers contains possible examples of harmful tax competition. I do not believe that excise duties fall into that category.

Lord Gisborough: My Lords, will the noble Lord look into his history book? Mr. Pitt, the younger, reduced the tax on tea from 110 per cent. to 25 per cent., thereby ruining the smuggling trade and increasing the take by the Exchequer.

Lord McIntosh of Haringey: My Lords, I hope that the noble Lord is not inviting us to,

    "Watch the wall, my darling, while the Gentlemen go by".
A significant element in the growth of smuggling is the big difference in duty between our tobacco taxes and those of other countries. But that is by no means the whole story. There are issues related to transportation costs and tobacco margins. It is also true that Italy and Spain have much lower tobacco duties, but they still have a very serious smuggling problem.

The Earl of Northesk: My Lords, is it not the case that persistent application of the escalator by successive Chancellors has meant that the annual revenue loss has risen from £560 million in 1996 to £1.5 billion in 1999? Does this not represent a triumph of ideology and political correctness over common sense?

Lord McIntosh of Haringey: My Lords, the noble Earl attacks the escalator policy. Presumably, he also applies that to fuel duties and calls that "ideology". First, it was begun by his own government and, secondly, the reason for the escalator policy on fuel duties is based on global warming and environmental protection. The escalator for tobacco is a public health issue. I do not believe that those are negligible considerations.

Lord Stoddart of Swindon: My Lords, does my noble friend agree that the law of diminishing returns appears to be operating in relation to the over-taxation (if I may put it that way) of tobacco? Does my noble friend also agree that that has an adverse effect on government health policy since the Government and the authorities are increasingly unable to determine whether tobacco smoking is increasing or decreasing?

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