Politicians are taking HM Revenue & Customs to task over failing to meet its targets on tackling tobacco smugglers.

The hearing of the Public Accounts Committee took place last week after a damning report from the National Audit Office that found HMRC is failing to crack down on criminals.

The Rt Hon Margaret Hodge MP, Chair of the Public Accounts Committee, has already been critical of the customs agencies.

She said: “In 2010-11, nearly £2billion of potential revenue was lost from the public purse because HMRC hasn’t got a grip on tobacco smuggling. Despite extra funding and new programmes, it is clear that HMRC’s performance is falling short.

“Its inability to crack down on unlawful tobacco smuggling not only affects the public purse but undermines Government efforts to stop people smoking, as members of the public can access cheap illicit cigarettes.

“HMRC has a duty to prevent criminal gangs from making big money out of this illicit business.”

The ACS is calling for a new strategy for tackling the illegal tobacco trade with a more active approach in going after the gangs that profit from illegal tobacco.

Chief executive James Lowman said: “We are very concerned they have failed to meet their operational targets. Our view is that this failure is due in part to the limitations of current enforcement strategy, so long as there continues to be a lack of resource and attention directed to inland, community centred, enforcement action.

“Existing strategy focuses heavily on detecting product at our borders. But it must be supplemented by greater focus on rooting out the gangs that are preying on our most deprived communities and stealing trade from legitimate retailers.”