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Fuel Fraud

Volume 563: debated on Wednesday 5 June 2013

There is no evidence that fuel fraud is rising in Northern Ireland. Published tax-gap figures show a long-term downward trend. Tackling fraud is a joint priority for Her Majesty’s Revenue and Customs and the Northern Ireland Executive, along with tobacco smuggling.

I am surprised by the Minister’s response, because that is not the information that we are being given in the Northern Ireland Affairs Committee. There is a huge issue involving not just the breaking of tax laws, but the criminal activities that lie behind it, and the potential support for terrorism. Will the Minister look into the situation? Does he accept that as long as two separate types of diesel are being sold the potential for fraud will continue, and will he consider an arrangement whereby those who use straightforward white diesel are given a rebate and those who do not are subject to sanctions?

I hope that I did not mislead the House by suggesting that there was any complacency about fuel smuggling, which is a serious matter. However, the original question related specifically to whether it was increasing. We are very conscious—as are the Treasury and HMRC—of the need to establish where the profits from fuel smuggling go, but the taxation issue is clearly a matter for a different Department, and I shall ensure that the relevant Minister is made aware of the hon. Gentleman’s comments.

It is well over a year since the Select Committee recommended that HMRC should, as a matter of urgency, introduce a new marker in order to prevent fuel smuggling and laundering. Will the Minister meet representatives of HMRC and demand why it is saying that the marker cannot be introduced for at least another 18 months, and will he make it very clear that such a time scale is unacceptable?

I have had meetings about the matter, and I have been pushing for the introduction of such a marker. Believe it or not, criminals have technology that enables them to remove new markers very quickly, so we must ensure that whatever new marker replaces those that we have at present does the job that it is intended to do. However, I will press my colleagues in the Treasury to ensure that we introduce it as soon as possible.

I pay tribute to members of the Police Service of Northern Ireland and their colleagues for the excellent co-operation that has taken place between police forces throughout the United Kingdom in relation to security arrangements for the G8 summit. Another issue that we need to tackle together is serious and organised crime—including, of course, fuel fraud—but, alarmingly, that cannot be done on a UK-wide basis, because the National Crime Agency will not operate in Northern Ireland. Can the Minister explain how we have arrived at this point, and what the consequences will be for Northern Ireland?

I completely agree. I, too, pay tribute to the mutual aid that is coming into Northern Ireland for the first time in such quantities, with almost 3,800 British policemen volunteering to come to Northern Ireland to assist with G8 security. That sends an important message to the rest of the world about the normalisation of policing in Northern Ireland.

I completely agree not only that the National Crime Agency is an issue, but that the profits from crime must be dealt with. This is a matter for the devolved Assembly, however. The Government would like to see the same approach apply across these matters, but that has to be decided in the Northern Ireland Assembly and Executive. We will continue to push them so that we can clamp down on the sorts of crime to which the hon. Gentleman referred.

The point is that it is the Government’s responsibility to ensure that they reach an agreement on the NCA with the Northern Ireland Executive. Worryingly, the Serious Organised Crime Agency has been abolished, yet the Government have utterly failed to get agreement for the NCA to operate in Northern Ireland. What exactly are the Minister and Secretary of State doing to resolve this situation, so that we can tackle fuel fraud and serious and organised crime across the UK as a whole?

I know the hon. Gentleman very well and he, like me, is very proud of the devolved Administration in Northern Ireland. We must do everything we can to help them, but at the end of the day these decisions have to be made by them. Fuel smuggling is a matter for HMRC and the police, but the NCA issue has to be agreed by all the political parties in the five-party coalition. We are pushing as hard as we can, but we cannot and will not take away the devolved Administration’s powers, because we want to move forward, not backwards.

May I follow on from earlier questions and ask whether the Secretary of State is fully aware of the seriously high level of fuel fraud? There are some estimates that up to one third of diesel is laundered diesel. Is he aware that at least £70 million of illicit profit is being made from fuel laundering across Ireland? The estimate is that that is split half and half between north and south; it used to be nearly all northern. There is also £100 million-worth of tobacco fraud. Can the Secretary of State give us any words of comfort, because the level of corruption is frightening?

The Secretary of State and I are very aware of that, and we have regular ongoing discussions about it. This is, of course, a criminality issue for the police to address, but where the profits go is also an issue, and we all know that some of the profits go into terrorist organisations. We must do everything we possibly can to clamp down on this, to stop that money getting into those organisations.

Further to the question from the Chair of the Northern Ireland Affairs Committee, the hon. Member for Tewkesbury (Mr Robertson), the Minister will know that a decision with regard to HMRC has been delayed yet again. The Committee understands that there is a marker out there that can do the job, resolve the issue and save the general taxpayer millions of pounds. Someone somewhere is dragging their heels. We need the Minister to intervene and get this resolved quickly.

I will again intervene on this matter and speak with my colleagues in HMRC. At the last meeting I had, which the Minister of Justice in Northern Ireland also attended, we understood that the marker was imminent. What those involved are worried about is introducing a marker that is not sufficiently robust. There are also dangers with regard not only to money getting into the wrong hands, but to the chemicals going into the environment after the markers are removed in the laundering process. That is very dangerous to both individuals and the environment in Northern Ireland.