Cigarettes: Tax (Hansard, 17 December 1991)

§ The Parliamentary Under-Secretary of State, Department of Health (Baroness Hooper)
My Lords, taxation is a matter for my right honourable friend the Chancellor of the Exchequer. There is clear evidence, however, that price affects the consumption of tobacco, and we were happy to see a substantial increase in price in the last Budget. The Department of Health will continue to ensure that the Chancellor is kept fully informed of the health arguments.

§ Lord Boyd-Carpenter
My Lords, does my noble friend agree that if people practise a habit which is certain to increase the costs of the National Health Service they should be obliged to contribute towards those costs?

§ Baroness Hooper
My Lords, yes. My understanding is that they do, and that we have seen the result of that recognition.

§ Lord Mason of Barnsley
My Lords, on cigarette taxation, is the Minister aware that in Spain the tax is £16 per 1,000 cigarettes; in France, it is £31 per 1,000 cigarettes; and in the United Kingdom it is £74 per 1,000? With the establishment of the internal market is there not likely to be a flood of cheap, continental imports? Secondly, is she aware that they will be cheap, high-tar content cigarettes which are much more dangerous and unhealthy than the low-tar British cigarette? Although we all agree that youngsters should not be smoking at all, the fact is that they are. Is she aware that the Government's present tax policy will further endanger the health of those youngsters and the unemployed, who will be going for the cheap smoke? Should we not try to avoid that?

§ Baroness Hooper
My Lords, I am very much aware of the figures quoted by the noble Lord, which is why we intend to do everything in our power to keep the price differential in favour of making consumers think twice before they smoke. The scare stories about the completion of the single market which have been quoted are based on an unrealistic assumption about legal personal imports and smuggling.

§ Lord Ennals
My Lords, I welcome and thank the Minister for what she has said. At a time when more and more children are starting to smoke—replacements for the 300 adults who die every day from smoking—does she agree that the two most important things to do are, as she has said, first, to increase the price as a deterrent; and, secondly, to end the advertising of tobacco products?

§ Baroness Hooper
My Lords, a package of measures is necessary to discourage smoking, 1190 especially among the young. We have focused on the education and preventive front in many of our campaigns. We have also focused on the price effect. We believe that the strict controls which our voluntary agreements bring to advertising are adequate.

§ Lord Orr-Ewing
My Lords, will my noble friend bear in mind that in the last Budget the Government increased the tax on cigarettes by 15 per cent.; and that we are now the country with the second highest taxes on cigarettes in the EC—only Denmark beats us? Will she not fall for the argument that banning advertising somehow stops cigarette smoking? It does not. It has not done so in the Scandinavian countries. It is higher in the Scandinavian countries where they have banned advertising than it is anywhere else. Will she not be led astray and not bend to the arguments coming from Brussels, the BMA or anywhere else, but stick to the voluntary agreements which seek to achieve what has been put forward from the other side of the House?

§ Baroness Hooper
My Lords, as I have said, advertising is one of a number of considerations that have to be applied in our attempt to decrease the consumption of cigarettes and tobacco products. We believe that the efforts we are making through our voluntary agreements are suitable and adequate.

§ Lord Monson
My Lords, does the Minister agree that it would be unseemly for the Government to appear to be taking orders from a quango such as the Health Education Authority, especially as the statistics upon which the authority's case is based are highly suspect, as emerged during Questions in the House only the other day?

§ Baroness Hooper
My Lords, the HEA document underlines the terrible health consequences, of which we are all aware, which result from smoking and the enormous costs that that creates for the health service. In the Government's Green Paper The Health of the Nation, we seek to reduce the proportion of people in this country who smoke: for men, from 33 per cent. to 22 per cent.; and for women, from 30 per cent. to 21 per cent. by the year 2000. Strict measures are required to achieve those targets.

§ Lord Stoddart of Swindon
My Lords, is the Minister aware that in Canada, following a large increase in tobacco duty, there has also followed a large increase in the smuggling of cheaper cigarettes from the United States? Is that not likely to happen if the Government go too far and overtax cigarettes?

§ Baroness Hooper
My Lords, we are aware of the problem. We shall have the necessary safeguards.

§ Lord Peston
My Lords, is the Minister aware of the most extraordinary paradox that is often put about? If it is true that cigarette advertising does not encourage the purchase of cigarettes, is it not the biggest waste of resources in our economy that we could possibly imagine? Does the Minister agree that it would probably be a good idea to divert those resources elsewhere?

§ Baroness Hooper
My Lords, that is a matter for the industry to decide. We are convinced of the importance of the obvious health warnings which all advertisements have to contain.

§ Lord Rea
My Lords, would not it be logical for Her Majesty's Government to remove the cost of tobacco products from the RPI, as certain other countries have done, as only one person in three in this country is now a smoker? Does she agree that that would allow the duty on cigarettes to be increased without affecting inflation, the calculation of which depends upon the RPI?

§ Baroness Hooper
My Lords, the RPI is supposed to be a representative measure of consumer prices and there is therefore no reason to exclude tobacco products.