Smuggling costs £750m in lost duty

Alcohol smuggling is costing Britain £750m every year in lost duty, according to new figures from the National Audit Office.

The new figures contradict recent Government claims that beer smuggling has been almost eliminated and smuggling of wine and spirits more than halved.

According to the report, Customs and Excise loses a total of £7.3bn in fraud, including bootlegged alcohol, petrol and tobacco as well as VAT fraud each year.

And the figures show that, despite claims that customs had hugely improved its clampdown on smuggling with extra resources, there is still a long way to go in the battle against bootleggers.

The national audit office said: "While early results from the current financial year indicate that seizures using scanners at ports are increasing, the 2001-2002 seizure target will be extremely challenging."

But the trade welcomed the latest figures, which it said supported its calls for a cut in duty to stamp out smuggling.

Georgina Wald, spokeswoman for the British Institute of Innkeeping, said: "This just goes to prove that we have still got a very bad situation and this disgusting trade is still continuing unabated.

"The Government has got to take the bull by the horns and do something to remove the incentive for the smugglers."

The trade has been critical of the way the Government has tackled smuggling for some time and has campaigned for a cut in duty instead of an increase in the number of customs officers.

But the Government has maintained that harmonising duty rates will not reduce the amount of bootlegged alcohol entering the UK.

Last summer it stepped up customs procedures at Channel ports, employing 170 extra officers and using new equipment to trap bootleggers.

Europe recommends duty harmonisation across member states, but Britain has so far resisted the recommendation.