FIRST-TIME SMUGGLERS WILL LOSE CARS

ANYONE caught smuggling alcohol or tobacco into Britain will
immediately have his or her vehicle impounded and sold off as part of
Government efforts to stem the flow of contraband into Britain.

Vans, cars and lorries will not be returned even if offenders offer to
pay the excise duty they were seeking to avoid. The Treasury hopes
that the new policy will be a strong deterrent against bootlegging by
so-called "white van man", as well as by organised criminal gangs who
are robbing the Treasury of UKP2.5 billion a year in unpaid duties.

Dawn Primarolo, the Paymaster General, announced the policy after last
week's Budget, in which the Treasury said it would double the number
of Customs officers at Britain's ports to 2,000. The stronger measures
in the battle against alcohol and tobacco smuggling brings to an end
the "two strikes and you're out" rule, which allows culprits a second
chance if caught by Customs.

As policy stands, those caught smuggling for the first time
have their vehicle returned to them if they pay the duty
they were avoiding. Ms Primarolo told The Telegraph:
"Smuggling is unacceptable and will not be tolerated. We
will want to do the maximum economic damage to the
smugglers. If this means moving from our two-strikes-and-
you're-out policy to a no-second-chance stance, then so be it."

A leaflet describing the harsh penalties for smuggling is to be sent
out with road tax reminders by the Driver and Vehicle Licensing
Authority. However, Customs officials say that tobacco smugglers are
already anticipating the powers of confiscation by using older cheaper
cars that they are resigned to losing. They say that runners are
turning from the typical white van to the "big beaten-up old banger"
because they realise that there is no point investing in a vehicle to
use for smuggling that, by the law of averages, will eventually be
confiscated.

The stronger measures are also unlikely to persuade some critics of
the Government who say that the only way to tackle smuggling is to
take away the incentive by bringing the levels of duty on tobacco down
to those in mainland Europe. They argue that Gordon Brown's
announcement of another 25p tax on a packet of cigarettes will result
only in extra money going into the pockets of smugglers, because of
higher sales of non-duty-paid products.

Paul Mason, of the Tobacco Alliance, which represents 28,000 British
tobacco retailers, insisted that the only way to stop bootlegging was
to cut the excise duty on cigarettes. He said: "If you brought the
excise duty more in line with our European partners the problem would
die overnight. It's ridiculous. The Government increases the duty on
cigarettes one day, giving the bootleggers even more incentive and
profit. Then the next day it announces it is spending UKP209 million
to try to stop smuggling.

"It does seem unfair that the Government is telling Customs to sort
the problem out when it is the Government that created the problem in
the first place. If the current trends continue, we won't be selling
cigarettes in three years' time. The whole market will have gone
black. Nobody in the UK is going to pay UKP5 for a pack if the
European prices stay roughly the same."

The Tobacco Manufacturers' Association has called on the Government to
cut cigarette duties by UKP1 a packet, arguing that it would
"eliminate" tobacco smuggling. The Government has been keen to
emphasise the link between tobacco duty and health. Late last year it
announced that UKP300 million of the duty would be earmarked for the
Health Service, particularly for treating smoking-related diseases.