ISSUE 2144 Sunday 8 April 2001

Gangsters winning as tobacco smuggling rises by 40pc

By Joe Murphy, Political Editor

THE smuggling of cigarettes and alcohol has leapt 40 per cent in the 12 months since Gordon Brown ignored an official report concluding that only cuts in duty would halt the illegal trade, which now costs the country £4.25 billion a year.

The increases, disclosed in Treasury figures, brought warnings from manufacturers that smuggling would continue to rise unless Mr Brown cuts Britain's excise duties, which are more than double rates on the continent. There were also warnings that the black market is now dominated by violent gangsters, with only a dwindling fraction of contraband brought in by individuals.

Mr Brown was warned last year by his anti-smuggling adviser that he should cut tobacco duty to curb the organised gangs. The recommendation, made by Martin Taylor, the City businessman appointed by the Chancellor to evaluate the way ports combat the trade, was ignored; duty on cigarettes was raised by 20p a packet.

In the following year the revenues from tobacco duty fell for the first time, from £8.2 billion to £5.7 billion. Although the Government claims that the £2.5 billion fall resulted from new accounting practices, it is the first evidence that Britain's high levels of duty make smuggling so profitable as to defeat their purpose.

A spokesman for Customs and Excise said: "Smuggling goes on in all developed countries, including those with very low duty levels. We do not believe that cutting duty would help."

-- Anonymous, April 07, 2001