Tobacco: Smuggling

Lord Newby Excerpts

Thursday 16th May 2013 Lords Chamber

[Lord Sheldon]

To ask Her Majesty’s Government what action they are taking to reduce tobacco smuggling.

[Lord Newby]

My Lords, the joint HMRC and UK Border Force efforts to tackle tobacco smuggling were strengthened in 2011. This included further investment of more than £25 million from the Government’s 2010 spending review to increase HMRC’s capacity to target and disrupt illicit trade and investigate those behind that trade. Latest estimates indicate that the illicit cigarette market has more than halved since 2000, from 21% to 9%, and the hand-rolling tobacco illicit market share has reduced from 61% to 38%.

[Lord Sheldon]

My Lords, is it not essential to reduce the smuggling of tobacco? It affects any increase and clearly results in an artificial weakness.

[Lord Newby]

My Lords, I completely agree with the noble Lord, which is why the Government have put more money into this. The money that we have put in will mean that 120 additional enforcement staff are employed at borders, looking specifically at this. There is a 20% increase in criminal investigations and a 20% increase in the overseas intelligence network, which is instrumental in identifying the sources of smuggling.

[Lord Mawhinney]

My Lords, is my noble friend aware of the reported considerable smuggling of tobacco across the Northern Ireland-Republic of Ireland border, despite the best and combined efforts of the Police Service of Northern Ireland and the Garda Siochana? What are the Government planning to do in addition to reduce that smuggling?

--- Later in debate ---

[Lord Newby]

My Lords, some of the additional effort that I have been talking about is being deployed in that area. The Irish tax rate on tobacco has increased recently, so the differential is less. But there is also an issue that is currently being looked at by the Northern Ireland Affairs Committee, which is relevant here, namely that the penalties for tobacco smuggling are significantly less than those for drug smuggling. There is a discussion about whether the sentencing guidelines for tobacco smuggling should now be tightened to move them more closely into line with drug smuggling.

[Lord Hannay of Chiswick]

My Lords, does the Minister recognise that this crime is, almost by definition, an international one, handled very often by international networks? Is he satisfied, and are the Government satisfied, that they are making full use of the machinery of Europol and OLAF in the European Union, and all the other structures that exist, for getting a genuine international effort to bear down on this crime?

[Lord Newby]

Yes, my Lords, I am. The co-operation on Customs and Excise matters is long developed, and a lot of effort has gone into it over the years. Noble Lords may be as surprised as I was to know that we have deployed staff covering between 60 and 70 countries and looking specifically at tobacco smuggling. They are working very closely with their opposite numbers in the countries in which they work.

[Lord Goldsmith]

My Lords, the Minister mentions additional money being put into criminal investigation. Can he say how much of that has been directed at the prosecution side? I am sure that he would agree that the threat of successful prosecution is important in combating this. Furthermore, what has been the effect of the abolition of the separate, dedicated, Revenue and Customs Prosecutions Office?

[Lord Newby]

The headline figure in terms of prosecutions over the past few years is very significant here, and the key point. Some 3,700 people have been successfully prosecuted since 2000. I think that I am right in saying that there is no diminution in the number of cases or the amount of success that we are having on the prosecution front.

[Lord Cormack]

My Lords, when the last Northern Ireland Affairs Committee looked into this grave issue, we found that a very large percentage of the smuggling into Northern Ireland involved substances far more noxious than tobacco. Can the noble Lord say how much of this smuggling is of genuine cigarettes, which are harmful enough, and how much is of more dangerous substances?

[Lord Newby]

Whether it is in Northern Ireland or anywhere else, the people who smuggle cigarettes do, indeed, tend to smuggle other things, typically drugs, and sometimes even more dangerous things than that. I do not have an exact breakdown, but a lot of this smuggling is carried out on a large scale by criminal gangs who are looking to smuggle anything they can with a high value, of which cigarettes typically are only one component.

[Lord Howarth of Newport]

I welcome the Minister’s statement that the Government are considering introducing greater consistency in their treatment of tobacco smuggling and the smuggling of other substances. Will they consider aligning more extensively their treatment of tobacco, alcohol and other psychoactive substances in making policy across those fields more consistent?

[Lord Newby]

That was an extremely wide question. As a general principle, that is what the Government are seeking to achieve. As I say, we are putting additional effort into combating smuggling not just tobacco but across the piece.