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Landfill Tax Fraud

Yes, and I will come on to such an example in a minute. We only have to look at a company’s directors to question the situation, and I know that the right hon. Member for Haltemprice and Howden is aware of such individuals. It would not take a great Google search, or an officer could have a look on the police computer to discover that these people have no interest in waste crime until they understand how lucrative it is.

Waste crime has become a very profitable business. The PAC report of last April, which came off the back of pressure from me, the right hon. Member for Haltemprice and Howden and others, outlines that of the 60 main organised crime groups in landfill tax fraud, 70% are involved in money laundering and 63% in other illegal activities. Waste crime is a way of washing or hiding drugs money, for example, and generating huge sums of cash—it is a licence to print money if people are not declaring what is going into a site.

People may ask, “Surely someone has noticed this?” People have been screaming about it for years. Are the police on it? Is His Majesty’s Revenue and Customs on it? Is the Environment Agency on it? They are not. I offer the House one simple fact: how many successful prosecutions for landfill tax fraud have there been since 1996? Not one.

The example I now come on to is the interestingly named Operation Nosedive—I would love to know why they named it that. Operation Nosedive was focused on the activities of a company called Niramax in Hartlepool in the north-east of England. At least, it operated in the north-east, but also elsewhere, as I am sure the right hon. Gentleman will allude to later on.

His Majesty’s Revenue and Customs instigated Operation Nosedive to look into illegal tax fraud. I have been told by individuals in the north-east about this company and what it did. It was set up, bought into the waste management business, had various sites around the north-east and other parts of the country, and I think it was running both scams: not only was it running the inert and active waste scam, but there is a question as to how much landfill tax was actually being paid on stuff it was dumping.

Someone explained it to me this way: looking at what Niramax was charging companies for taking away their waste. There is no way it could have charged that rate if it was paying the full landfill tax charge. Likewise, how could it be economically viable to transport waste from a council in south Wales to the north-east? It was quite a big operation, and certain local companies went out of business because they were being undercut by Niramax.

Three regional police forces, Durham, Cleveland and Northumbria, had contracts with Niramax, which shows how big the business got. If anyone had looked at the directors of the company and seen their backgrounds, I would have thought it would have rung a few alarm bells with those three police authorities and made them ask why on earth they were giving a contract to that company.

After a few years of badgering, HMRC took action and Nosedive was launched, with a great deal of publicity, in 2014 with a raid of Niramax’s headquarters in Hartlepool. £250,000 in cash was found under somebody’s desk and a lot of documents were taken. To quote the Teesside Live newspaper at the time:

“Simon York, Fraud Investigation Service director at HMRC, said: ‘This is the culmination of 18 months’ painstaking investigation into the suspected systematic abuse of the landfill tax system. We believe that over £78m revenue may be involved, money which could be used to fund some of the UK’s most vital public services.’”

That is £78 million for one operator. I thought, “Great!” when that happened, and so did people I know in the industry, but six years down the line a journalist rang me and said, “Do you know they’ve actually dropped the Operation Nosedive prosecution?”. Nothing happened, but HMRC spent £3.5 million of public money on the investigation.

I tried to find out how much that investigation cost; I know my hon. Friend the Member for Blaydon tried too, but HMRC would not tell us. We only found out because the right hon. Member for Haltemprice and Howden and I got the National Audit Office to do an investigation into it. There is a fundamental question of accountability here. Before the Minister tells me that we cannot have control over HMRC, I agree with him, but there is a lack of accountability in this situation if I or Parliament cannot ask why public money is being spent in that way.

Operation Nosedive was a complete failure and Niramax got away with the fraud—and that £78 million is just one organisation. The other point is that Niramax was not the only operator using that landfill site or the other sites it owned. Other operators were using them too, which raises the question who else was in on the scam and who else was not paying full landfill tax, because I suspect others were at it as well.

The strange thing is that one of the main directors of Niramax is currently in prison—it has nothing to do with this situation, but rather with a very nasty murder case in Hartlepool. Were people surprised when he was found to have been involved in that situation or found guilty? No, they were not, but why are people with criminal records allowed to run those industries? Because they are making money. That is just one case.