The Office for National Statistics announced today that Britain's goods trade gap grew to £7.142 Bn. December 2006 , from £6.871 Bn. in November 2006. December's figures added to the largest annual trade deficit since records began in 1697, with the total trade gap for 2006 widening to £55.8 billion pounds in 2006 from £44.6 billion in 2005. ( A rise of 25%)
Records were set last year for both exports and imports but , excluding oil and erratic items, the volume of exports rose by 1 % between November and December and the volume of imports rose by 3%. (Nota Bene No-one has said yet the economy has been "blown off course". Yet.)
Very significantly the Press release states (verbatim)
"Following a change in the pattern of trading associated with Missing Trader Intra-Community (MTIC) fraud, identified by Her Majesty’s Revenue and Customs, interpretation of the breakdown between EU and non-EU trade is more difficult. Originally, most carousel chains only involved EU member states. More recently, some carousel chains have included non-EU countries, for example, Dubai and Switzerland. However, the import adjustment is applied only to EU imports as the goods return to the UK via the EU - but it is this part of the trading chain that is not recorded." (i.e the gangsters are one step ahead)
A report was issued in March 2005 Report on impact of MTIC on UK Trade statistics
Report on further research into the impact of Missing Trader Fraud on UK Trade Statistics, Balance of Payments and National Accounts. by David Ruffles & Tricia Williams... (Download PDF 9 pages ) which baldy concluded that it was not possible to extend or refine the estimates for the impact of fraud on the statistics using the currently available sources. Page 1.
On Page 9 they add ..."There are also concerns about asymmetries in Intrastat data, in particular issues about possible fraud in other Member States, inconsistencies between Member States in the calculation of statistical value, estimation of Below Threshold Trade and late/partial response. The UK will continue to be active in the European meetings at which these issues are addressed.
While further research by HMCE into the various data sources is possible, it is very resource
intensive. In addition, because of concerns about the overall quality of those data sources, in the
judgement of the HMCE/ONS team it is unlikely to yield robust estimates for the impact on the
trade statistics of either carousel fraud in other goods or of acquisition fraud."
A report from Reuters suggested that VAT fraud cost the UK government at least £ 8.5 Bn. (yes Billion) in the year to June 2006, whic HMRC disputes burt cannot provide any precise figures - which the Chancellor was slated to produce in his December 2006 statement ...but didn't. (But.See Below in BBC report)
Intriguingly the BBC report today (although the source of the figures is not given and is certainly not in the monthly statistics) ...
"The latest trade figures also reveal a continuing slump in the amount of trade associated with VAT "carousel fraud", which has been a factor in the volatility of the figures."
In December the volume of dishonest trade dropped to just £100m. "
They continue to say, despite the caveat about dealing with non EU fraud trails noted above ...
In the whole of 2006 there was £28.7bn worth of trade associated with this fraud, far and away the worst year on record and twice as much as in 2005. Most of this was in the 1st half , .... with just £600m of it in the last quarter of 2006.Meanwhile 5 arrests were made today in Surrey by HMRC, of a gang believed to have smuggled more than 85 tonnes of hand rolling tobacco (say 5 container loads) into the UK since July 2006 which involves the evasion of tobacco duty in the region of £12.5million.
In last December's pre-budget report (unseen by anyone else) Gordon Brown revealed that the Treasury lost between £2bn and £3bn in 2005-06 because of this activity. (For statisticians that is a variance of 100% = in this case £100,000,000 - which is a fair margin for error)
John David WRIGHT, DOB 04/08/66 of Ruxbury End, St Ann's Hill Road, Chertsey, Surrey, KT16 9NL remanded in Custody.
Andrew Jeffrey GREEN, DOB 12/01/62 of 22 Camellia Court, West End, Woking, Surrey, GU24 9XQ Bailed
Christopher William SHEARD, DOB 26/11/48 of 6 Monks Way, Staines, Middlesex, TW18 1QU Bailed.
Bali Shag is the only true European hand-rolling tobacco sold in the United States... do John Prescott and Jack Straw share the odd packet, Lord Patel wonders.