3. What recent assessment he has made of the extent of petrol and diesel smuggling from the Republic of Ireland into Northern Ireland. (63169)

Her Majesty’s Revenue and Customs leads the work to crack down on fuel smuggling and fraud, working closely with the Irish authorities. The Organised Crime Task Force, which is chaired by the Northern Ireland Justice Minister, estimated in its 2011 threat assessment that there is an annual tax loss of £200 million from fuel fraud and legitimate cross-border fuel shopping.

Estimates suggest that the Government actually lose between £280 million to £300 million a year to fuel smuggling and laundering in Northern Ireland. That pushes up fuel taxes for everyone, which is deeply unfair. Does my right hon. Friend agree that extending rural fuel pilots to the new economic zones would cut smuggling and save the taxpayer an absolute fortune?

I agree that we need to save the taxpayer an absolute fortune, and I have had discussions about this issue with both the Northern Ireland Justice Minister and the Exchequer Secretary to the Treasury. I recently brought to the attention of the Exchequer Secretary and the Financial Secretary to the Treasury—who is here with us today—the comments of the hon. Member for North Antrim (Ian Paisley), who has some ideas about various companies that can help with the traceability of fuel. However, I would also point out to my hon. Friend that the “Cross-Border Organised Crime Assessment 2010” said:

“Changes in exchange and duty rates have made this…less profitable over the past few years than it would have been previously.”

We have just heard about the amount of money that Her Majesty’s Government are losing in revenue to fuel smuggling and laundering. The Minister will be aware of recent findings of large amounts of fuel on the border. Can he please update us on the fuel duty escalator and the possible introduction of a pilot scheme in Northern Ireland?

I think that I have just answered that question, which was not dissimilar to that asked by my hon. Friend the Member for Harlow (Robert Halfon). In direct answer to the point about co-operation across the border, relations are extremely good, as is true for all our relations with the Republic of Ireland, not least with the Garda. We are working in close co-operation, hence the success of the Organised Crime Task Force and HMRC in driving down fuel smuggling.