Committee "bitterly disappointed" at lack of progress tackling fuel fraud

• Report: Fuel laundering and smuggling in Northern Ireland
• Inquiry: Fuel laundering and smuggling in Northern Ireland
• Northern Ireland Affairs Committee

In a report published today, the Northern Ireland Affairs Committee says that the scale and impact of fuel laundering crimes in Northern Ireland particularly requires a much higher priority and focus in fighting it.

The Committee recognises the commitment and effort of individual HMRC officers in the fight against fuel crime in Northern Ireland,  but says that as HMRC was allocated an additional £917 million in 2010–11 to bear down on tax avoidance and evasion across the UK, it should make a more concerted effort to eradicate the problem in Northern Ireland, where it is most prevalent.

Lack of progress

The Committee is particularly disappointed by lack of progress on developing new "markers": chemicals added to fuel to mark it out as rebated, which are removed to enable it to be fraudulently sold at higher prices.

Fuel fraud costs the UK taxpayer hundreds of millions of pounds in lost revenue every year. Northern Ireland is estimated to have lost £70 million in 2009-10. Only five years ago this figure was as high as £250 million, and while the Committee welcomes this downward trend, fuel fraud remains a particularly serious problem for Northern Ireland. While 4% of diesel sold in GB is thought to be illicit, in Northern Ireland the comparable figure is estimated to be 12%. District councils in Northern Ireland foot the bill for cleaning up the harmful wastes left by laundering - about £330,000 in the last five years.

The problem is also particularly acute in Northern Ireland because of links between organised criminal gangs and paramilitaries.

The Committee is concerned at the apparent limited success of assets recovery as a deterrent. This lack of deterrence is exacerbated by the poor record for imposing custodial sentences in Northern Ireland. Between 2001 and 2009, only four people received custodial sentences for fuel fraud in Northern Ireland. This does not compare well with the sentencing record for comparable offences in Great Britain.

Comment from the Chair

Laurence Robertson, Chair of the Committee said:

"Fuel fraud is not just about loss of tax revenue and it is not a victimless crime. It is the men, women and children of Northern Ireland who are the victims. It is they who have to in an environment damaged by the fuel criminals, who are paying higher rates due to lost revenues and the cost of tackling this crime, whose life and health are put at serious risk on roads and ferries.

Fuel fraud is carried out by organised criminal gangs, some of which have paramilitary links and are engaged in the most serious crimes: drugs, human trafficking and money laundering. Buying and selling illicit fuel funds these activities.

It is for these reasons that we believe there is currently not enough focus on tackling this crime which is a disproportionately a problem for Northern Ireland. HMRC has been given major extra resources to tackle this across the UK, we would urge them to make a more concerted effort to eradicate the problem of fuel crime in Northern Ireland, where it is most prevalent. Not enough of these criminals are being brought to justice, and certainly relative to the situation in Great Britain, yet arguably greater harm is being caused in Northern Ireland.

We are bitterly disappointed at the seemingly slow pace of progress on acquiring effective technologies to tackle fuel crime. We urge HMRC to focus its efforts on acquiring the latest and best rebated fuel marker technology as soon as possible, commence a pilot as soon as practicable, and report back to this Committee before summer."

Further Information

• About Parliament: Select Committees
• Topics: Roads