Wednesday, May 30, 2007

Driving out the news

We could predict what was going to dominate the UK newspapers by early evening yesterday and, sure enough, there is saturation coverage of the kidnap of five Britons in Baghdad and even more (in some papers) on the resignation of Graham Brady after the Boy King's extraordinarily maladroit handing of the grammar school issue.

But the penalty of the newspapers devoting so much space to specific issues is that much of the rest of the news – much of it of crucial long-term importance – is driven out, never to be covered.

One casualty of this phenomenon is the latest development in the long-running VAT fraud saga, a complex issue which the media needs no excuse to ignore. This we saw the last time there was a development.

At least, though, The Financial Times offers a report, retailing a warning from the International VAT Association (IVA) that proposed simplification of VAT rules for cross-border trading of services will undermine the battle against fraud, already costing billions of pounds a year.

Worryingly, as national authorities are cracking down on the more well-known scams – mainly involving computer chips and mobile telephones – the is reporting that (as expected) criminal are becoming more sophisticated. They are increasingly targeting services and also using a series of inter-connected transactions in which the sales of services mask the fraud.

What makes this issue so grave is the sheer scale of the fraud and the fact that the system is inherently vulnerable to such fraud. As fast as the authorities plug one loophole, the criminals find another.

Furthermore, this is real money being stolen – not some victimless accountancy scam - and many of the perpetrators are believed also to be involved in either the illegal drugs trade or terrorism (or both).

Yet, our increasingly juvenile media does not seem to be able to cope with the enormity of this criminal activity which, as we pointed out in our last piece, dwarfs such celebrated crimes as the Great Train Robbery. As for our politicians … well, the Boy doesn't do "Europe".

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