Standardised Packaging of Tobacco Products Regulations 2015
(9 years, 9 months ago)
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The Parliamentary Under-Secretary of State, Department of Health (Earl Howe) (Con)
My Lords, these regulations propose to introduce standardised packaging for tobacco products, which I believe to be an important public health measure. I pay tribute to all the noble Lords who campaigned for the introduction of these regulations—in particular the noble Baroness, Lady Finlay, the noble Lord, Lord Faulkner, and my noble friends Lady Tyler and Lord McColl, who all pressed for it during the passage of the Children and Families Bill in 2014.
Tobacco use remains one of our most significant public health challenges. Smoking places an enormous strain on the NHS, and is a significant driver of health inequalities. More people die from lung cancer in the UK than any other form of cancer and almost nine in 10 of all lung cancers are caused by smoking. For this reason, the Government have prioritised action to reduce smoking rates, which is why we published the tobacco control plan for England in early 2011.
We have looked carefully at the evidence and it shows that introducing standardised packaging is highly likely to bring important public health benefits, primarily by reducing the appeal and attractiveness of tobacco packs, especially to children and young people, and improving the salience of health warnings on packets. Packaging and branding are promotional tools used to attract consumers. Since the ban on advertising tobacco products in the UK, packaging has become a key avenue for the promotion of tobacco, and it is notable that one tobacco company referred to tobacco packaging as its “mobile billboard”. Opponents of standardised packaging claim that there is no evidence that it will bring about a reduction in smoking prevalence or the resulting health benefits. In fact, Sir Cyril Chantler, who reviewed the evidence, concludes that,
“it points in a single direction”,
and that there is no,
“convincing evidence pointing the other way”.
Let me first outline what the regulations propose, before discussing the wider issues. The Children and Families Act 2014 gives the Secretary of State powers to regulate the retail packaging of tobacco products. In November 2013, Health Ministers commissioned Sir Cyril Chantler, the eminent paediatrician and medical researcher, to undertake an independent review into whether standardised packaging would be likely to have an effect on public health, in particular in relation to children. Sir Cyril’s thorough and well considered report, published in April 2014, concluded that standardised packaging would be highly likely to have a positive impact on public health.
On the publication of the review, my honourable friend Jane Ellison, Public Health Minister, announced that the Government were minded to proceed with standardised packaging, subject to a final consultation. There has been extensive engagement and consultation with the public and stakeholders on this proposal, including two public consultations—one in 2012 and a further consultation in 2014. The Department of Health has carefully considered all responses to both these public consultations and the wider points that they raise.
These regulations propose to standardise the retail packaging of all cigarettes and hand-rolling tobacco. Cigars and pipe tobacco are not currently covered by the regulations. The regulations specify mandatory colours for those parts of the packaging that are not taken up by health warnings or duty marks. The outside of packs will have to be a uniform dull brown and the insides plain white. The brand name of the product may appear but must be in grey with a fixed size and typeface. This means, in effect, that no branding will be allowed except for the brand name. The regulations also specify that individual cigarettes must be plain white with a cork effect or white tip, but will allow the brand name to be printed in small text. An illustration of what a standardised cigarette packet could look like has been published, which noble Lords may wish to see.
The draft regulations will also implement certain packaging-related requirements from the European tobacco products directive that was agreed last year, such as the shape, material and minimum content of packs. The remainder of the tobacco products directive will then be implemented through separate regulations, which the Department of Health will be consulting on shortly. Standardised packaging would be a UK-wide measure. Public health is a devolved matter but Scotland, Wales and Northern Ireland have provided the necessary consent for the regulations to extend to their Administrations.
Looking wider than the UK, there is international momentum towards introducing standardised packaging. Although the only country to have implemented standardised packaging is Australia, many other countries are taking positive steps towards legislating, including Ireland, France, Norway, New Zealand and Turkey. The Australian Government were clear when introducing the measure that they expected the benefits of standardised packaging to be “generational” and come in the longer term. The Cancer Council Victoria has recently reviewed the available Australian evidence and data so far, and concluded:
“Prevalence of smoking in Australia fell dramatically between 2010 and 2013”,
and that,
“plain packaging is likely to continue to contribute along with Australia’s other tobacco control policies to further reducing the prevalence of smoking in Australia”.
There have been some suggestions that standardised packaging may lead to growth in the illicit tobacco market. I want to reassure noble Lords that this issue has been considered carefully across government. HMRC leads on reducing the size of the illicit tobacco market and has undertaken a detailed assessment of the potential impact of standardised packaging on the illicit trade of tobacco, which was published and put into the Library in February. The HMRC report concluded:
“We have seen no evidence to suggest the introduction of standardised packaging will have a significant impact on the overall size of the illicit market”.
Some also have concerns that this will be the start of a slippery slope towards standardised packaging for other products, such as unhealthy foods or alcohol. I want to be absolutely clear that the Government have no intention to extend standardised packaging to any product other than tobacco. Tobacco has been treated uniquely in regulatory terms before, as it is a uniquely harmful consumer good. All smoking is addictive and harmful to health, and half of all regular smokers are eventually killed by smoking-related illness. This is not true for other consumer products.
I understand that some noble Lords will, rightly, have concerns with regard to the potential legal implications of introducing standardised packaging. Let me be clear that thorough consideration has been given to such concerns. We know that the tobacco industry is likely to challenge this measure should the regulations be made, as it has with other tobacco control legislation. Threats of legal action have already been made by tobacco companies. However, we believe that these regulations are a proportionate and justified response to a major public health challenge, and will be defensible in the courts. We cannot let the vested interests of the tobacco industry control the public health agenda, and we will defend public health legislation from legal action.
Smoking remains a critical public health concern. Smoking is an addiction, largely taken up in childhood and adolescence. The choice to smoke is not like other choices and is often not made as an adult decision. Research included in the Chantler review shows that around 600 children between the ages of 11 and 15 start smoking every day in the UK. It is crucial that we do all we can to reduce that number. We also need to do all that we can to assist those already addicted to quit; and I believe that standardised packaging will contribute to doing so. The introduction of standardised packaging is likely to deliver important public health benefits and, as part of a comprehensive tobacco control strategy, will bring us a step closer to a smoke-free generation. I beg to move.
Lord Naseby
As an amendment to the above motion, to leave out from “that” to the end and insert “this House declines to approve the draft Order laid before the House on 23 February as it does not reflect the impact evidence from the Australian introduction of standardised packaging; makes no allowance for the continuance of the security system “Codentify” currently in operation with HM Revenue and Customs to differentiate between legal and illegal packs; and because the anticipated start date in 2016 does not give sufficient time for the supply chain and retailers to make adjustments, in contrast to the three-year period allowed for the display ban.”
Lord Naseby (Con)
My Lords, the House knows that I have no interests to declare in relation to the tobacco world. I do not smoke, I never have smoked and I do not own any tobacco shares. What I do declare is that for 30 years of my life, before coming to your Lordships’ House or the other place, I worked in marketing, sales, market research and consumer attitude research. I bring those skills to my analysis of the latest evidence before us on standardised packaging.
I also bring the latest evidence that we have on the incidence of smoking today, which was published only a few days ago. I applaud as much as anybody else, and as the House will applaud, the fact that the percentage of adults who smoke in this country has come down to 18.7%. That is the smallest percentage in any developed country. The important point, according to research by a company called Simply E Liquid, is that the key determinants are the new anti-smoking laws, particularly the ban in pubs and restaurants, and the popularity of vaping.
It is against that background that we have to assess whether it is necessary to go as far as my noble friend on the Front Bench in relation to standardised packaging. He is right to say that Sir Cyril Chantler is an eminent paediatrician. He is someone I have known for a great many years; I studied at the same college as him. However, I have to say that eminent paediatrician he may be, but eminent marketer or market research man he is not. That is a key point in relation to the evidence from Australia.
I want to look at four aspects that affect standardised packaging: Australia, HMRC, Codentify, which my noble friend did not mention, and the impact on the packaging industry, which, again, my noble friend did not say a word about. Let us turn first to Australia, which is one of the key dimensions. As my noble friend rightly says, it is the only country to have introduced standardised packaging. It was claimed that the rate of new smoking would decline. In fact, today it is at a seven-year high in Australia. That is evidence from the Australian Institute of Health and Welfare. It was claimed in evidence from the Australian National Accounts that standardised packaging has not accelerated the decrease in tobacco use. It has not accelerated the pre-existing downward trend of smoking rates; that comes from the work of Kaul and Wolf. Health warnings have not become more effective following the implementation of standardised packaging. That comes from the Department of Health and Aged Care in Australia. According to recent work by KPMG, since the introduction of standardised packaging, illegal tobacco consumption in Australia has now grown to its highest level in seven years. By mid-2014, illicit tobacco consumption stood at an unprecedented 14.7% of the market as a whole, some 25% higher than it was in 2012. Those are the facts against which we have to make a decision, which the country will have to accept or not. But those facts were not exactly what my noble friend on the Front Bench talked about. Most of them were not referred to but they are vital in analysing whether standardised packaging works.
I now turn to HMRC. My noble friend put great emphasis on its work but the survey or evidence he cited was from prior to HMRC’s publication on tax gap figures in 2014. So there is further evidence now that my noble friend has, for one reason or another, chosen not to put before the House this evening. The illicit trade in tobacco products costs this country £2.1 billion. It is my view that that money would be better spent on the health service. If we look at some of the components of that, HMRC has now stated that standardised packaging will provide a suitable environment in which the illicit market in white cigarettes will continue to grow. It argues that it is possible that the introduction of standardised packaging will lead to increased attempts to infiltrate counterfeit products into the lower end of the retail supply chain. Finally, HMRC has accepted that plain packaging could increase the likelihood of small local retailers getting into trouble and being prosecuted.
I turn briefly to the Codentify system, something that noble Lords could be forgiven for not knowing much about and which was not even mentioned by the Minister. The draft regulations before us do not provide for the inclusion of Codentify markings on tobacco packs. One must ask: why are they not included? Codentify is a product security and authentication tool that provides a unique, secure identifier for each individual packet of cigarettes and hand-rolling tobacco. It allows manufacturers and, in some ways more importantly, Customs officials to authenticate products and trace the origins of packs all the way from the start of the manufacturing process right through to when they are sold. It plays a vital role in the fight against the illegal tobacco trade because it allows law enforcement officers to check. Without Codentify, it will be impossible for manufacturers to use that existing security and authentication technology between May 2016, when, I understand, the new system is to come in, and May 2019. Why May 2019? Because that is when the second tobacco product directive will be introduced and there will be a new tracking mechanism.
It is all very well for the Minister for Public Health in another place to state that this is being looked at. It is not good enough for your Lordships just to look at things when they are so vital. My noble friend talks about public health. There is nothing worse for public health than having illicit counterfeit cigarettes floating around the market. I hope that when he comes to reply, he will address that issue. Without a means of tracking, I do not see how we will be able to restrict illicit goods entering the market.
The third issue is packaging. As one who has worked in it for many years, I can say that the print industry is very complex; it is not simple. The Minister in another place stated:
“The print industry has known for some time that standardised packaging has been under discussion—the issue has not been recently sprung on it, so it has had a chance to consider how to respond”.
The Honourable Member for Bradford South, Mr Gerry Sutcliffe, disputed the Minister’s claim. He is a former print worker. He told the committee that such a claim misunderstood the nature of the packaging business:
“It takes time in the printing industry, which is very competitive, to offer alternative proposals, even if those are for standardised packaging. It will take at least 18 months to two years for the designs to be made and the buyers and marketers to go out to try to change people’s opinions”.—[Official Report, Commons, Twelfth Delegated Legislation Committee, 9/3/15; col. 24.]
He said that in Bradford alone there are 400 jobs in the packaging industry that may be put at risk and that, with other tobacco control measures that have been introduced, such as a display ban, three years were allowed to make adjustments, which is a reasonable length of time. In this case, it is only 18 months. Why has the time been reduced? It is far too short a timescale. The Consumer Packaging Manufacturers Alliance, which represents a number of packaging companies in the tobacco supply chain, has called for a delay in implementation of the plain packaging regulations if they go through. That will give people time to adjust and understand what the changes are. A great many people do not really understand how complicated and unique the packaging for cigarette products is. It involves gravure printing, rotary embossing and hot-foil stamping. Many other markets do not use those elements and certainly do not involve the huge volume involved.
I appeal to your Lordships to think very hard about the necessity to go as far as is suggested in the Government’s Motion. The introduction of plain packaging for tobacco products will not produce, in my judgment, the results claimed. I base that on the evidence from Australia, which has been authenticated by various government bodies there. I have given the quotations and where they come from.
Frankly, plain packs are little more than a smuggler’s charter. They offer criminals a wonderful template that will allow them to copy tobacco packaging easily and thereby infiltrate the supply chain more effectively. The extraordinary exclusion of the Codentify system from standardised packs will further drive the illicit trade and illegitimate supply and will make it far harder to detect and seize. Without a reasonable revision for adjustment for the packaging companies, hundreds, perhaps thousands, of jobs will be put at risk. Is this really part of the enterprise economy or is it just another example of the UK wishing to be a world leader?
The Motion before us is not needed. The evidence is not there and, on top of that, although my noble friend says that it will never affect another industry, I frankly do not believe him. This will adversely affect trademarks and intellectual property rights and it will affect many other industries as we move forward. It is not a sound Motion and it should be rejected. I beg to move.
Lord Faulkner of Worcester (Lab)
My Lords, unlike the noble Lord, Lord Naseby, I am pleased to welcome unreservedly the regulations moved by the Minister and to congratulate him not only on the way he introduced the debate but on the part that he played in persuading his ministerial colleagues that the introduction of standard packaging for tobacco products will make a significant contribution towards public health. I thank him for the kind words that he spoke about me and the other four members of the group, from all sides of the House, who saw the opportunity to add amendments to the Children and Families Bill to introduce a range of tobacco control measures.
The Minister has described in great detail the steps that the Government have taken since the amendments were added to that Bill. The most important of those was the study by Sir Cyril Chantler, who concluded that standardised packaging,
“is very likely to lead to a modest but important reduction over time on the uptake and prevalence of smoking and thus have a positive impact on public health”.
All the objective evidence—I stress the word “objective” for reasons I will explain in a moment—supports the case for standardised packs. It would, in the words of the Canadian Cancer Society:
“(1) eliminate promotional aspects of packaging; (2) curb deceptive messages conveyed through packaging; (3) enhance the effectiveness of health warnings; (4) reduce tobacco use”.
It is precisely because the adoption of these measures will work that the tobacco industry has been spending such enormous sums of money in its efforts to defeat them. The tactics it has followed are consistent with everything it has done to oppose tobacco control measures since the 1950s. First, it attempted to discredit the results of Sir Richard Doll’s research that proved the link between lung cancer and smoking. Then for years the industry denied the addictive properties of nicotine. It lobbied extensively and expensively against every piece of legislation aimed at reducing smoking prevalence, from curbing sponsorship and advertising, protecting people from the effects of second-hand smoke, limiting displays of tobacco in retail outlets, and now these regulations on standard packaging.
Baroness Tyler of Enfield (LD)
My Lords, I congratulate the Minister and the Department of Health on producing a high-quality and thorough set of regulations after a thorough consultation exercise. I join the noble Lord, Lord Faulkner, in adding my congratulations to the department for receiving the Luther Terry Award for Exemplary Leadership by a Government Ministry. It is measures such as these that make Britain a world leader in public health.
In our debates on this subject, I have spoken extensively about the need for these regulations and the evidence that they would make a real difference. The bare facts are these: only one in 10 smokers in the UK started after the age of 19, and two in five started before 16. We have already heard from the Minister the figures on how many people die each year from smoking-related diseases, and the number of children between the ages of 11 and 15 who take up the habit and risk their health by spending hundreds, if not thousands, of pounds a year on a toxic product.
The unconscious trigger of attractive packaging is an extremely successful marketing tool that encourages children and young people to glamorise and take up smoking. Bright colours, sleek designs and slim cigarettes—to name but a few—all make people falsely believe that such cigarettes are less harmful. I remember as an impressionable teenager the impact that some of those cigarette pack designs had on me. It made a big difference and I indeed wanted to start smoking, and did so; and I think I was influenced by some of that marketing material.
I should like briefly to turn to some of the objections that have already been advanced by opponents of these regulations in this debate. First, the tobacco industry has claimed that standardised packaging would increase the volume of illicit tobacco on the market. This is flatly contradicted by a recent HMRC assessment and an independent review by Sir Cyril Chantler, both of which indicated that there is no evidence for such a claim. Indeed, there is no evidence that standardised packs would be easier to counterfeit. Standardised packs are not “plain packaging”—that is a misnomer. They would carry the same security systems as current packs. There is no evidence that that there has been an increase in the illicit tobacco trade in Australia since the implementation of the policy. The total weight of illicit tobacco detected by Australian customs has remained roughly static since 2007-08. Indeed, a recent study shows that there was no change in the availability of illicit tobacco in Australian shops since the introduction of standardised packaging. At any rate, it seems logical that the way in which to reduce illicit trade is through more effective regulations, which these regulations clearly are.
Secondly, the tobacco industry has claimed that standardised packaging would damage small businesses because it would make it more time-consuming for shop assistants to retrieve packs, and that this delay would make tobacco less profitable for small businesses as opposed to large supermarkets. Tobacco companies based these predictions on interviews with just a handful of retailers. In contrast, peer-reviewed studies of small shops in Australia before and after the standardised-packaging policy demonstrate that there was no significant increase in serving time.
It is true that standardised packaging is likely to result in reduced tobacco sales. In fact, it is the very purpose of these measures; it is the Government’s hope and certainly mine. Every pound that consumers no longer spend on tobacco they will surely spend on other goods and it is very likely that small businesses will pick up some of this trade. After all, shops, including small shops, have adjusted to the continuous decline in the prevalence of smoking from half of the population in 1960 to roughly one-fifth now and there is no reason to suppose they will not be able to adapt further. On this point, can the Minister confirm that in the interests of reducing costs to retailers the measures will be implemented at the same time as the packaging and labelling measures in the EU tobacco products directive in May 2016? Can he also confirm that retailers will be given a full year after the implementation date to sell through existing stores of non-standardised packs? It comparison, retailers in Australia were given just eight weeks to do that.
The tobacco industry has made what I think is a very convoluted argument that standardised packaging will lower prices and thus increase tobacco consumption. In the process of conducting his review last year, Sir Cyril Chantler was told by tobacco companies that sales had increased slightly, despite the fact that the industry had told its investors the opposite. Analysis by the independent market research company Euromonitor concurred that there had been a decline in sales in Australia between 2012 and 2013.
As we have already heard, it seems to be contested—although frankly I do not know why—what the impact in Australia has been since the introduction of standardised packaging. I have looked very carefully at what the helpful leaflet Standardised Packaging for Tobacco Products, produced by very reputable organisations such as the British Heart Foundation, King’s College London, the University of Waterloo, Cancer Council Victoria and the UK Centre for Tobacco and Alcohol Studies, has said about the impact so far. It shows that there is a reduction in young people taking up smoking and an increase in the proportion of existing smokers who are trying to quit. Indeed, the National Drug Strategy Household Survey in Australia showed that the proportion of 18 to 24 year-olds who had never smoked increased from 72% in 2010 to 77% in 2013.
A 2014 study from Australia that reported in the British Medical Journal shows that the prevalence of smoking among adults fell by 15% in the second half of 2013 alone. Finally, following evidence that smokers find cigarettes in standardised packs less appealing—which of course is the very purpose of it—there is new evidence that calls to Quitline, a free smoking cessation service, have increased by 78% since the introduction of standardised packaging.
It is a credit to the very thorough and painstaking way that this measure has been developed by the Government that these are the best criticisms opponents can level. Above all, it is time to listen to the 72% of Britons and the majority of all political parties and support standardised packaging.
Viscount Falkland (CB)
My Lords, I am a non-smoker but having been in your Lordships’ House for some years one thing that concerns me about this measure is the unintended consequences. One is always worried in this House about them and so we should be. It seems very odd that so few people have expressed the view that tobacco is a legal product. How can you interfere with the marketing and the sales of a legal product? I think the product is undesirable and the arguments of the scientific community about its danger to health are indisputable. However, we have to think rather carefully about what may follow. If you get away with this without too much protest there are all kinds of bien pensants and vigorous politically correct people who will seek to do various things. For example, it could happen quite easily that in some local authority someone of limited life experience might suggest that, with obesity and the compulsion that people have to eat too much, it might be a good idea to prevent restaurants allowing people to eat on the pavement under an awning because that attracts people to sample the restaurant’s delicious wares. Noble Lords may think that this is a trivial, Clarksonesque point, but it bears thinking about.
I am grateful for the efforts that have been made to curb the ill effects of smoking. I am a frequent cinema goer—I have been a film buff since I was a boy. I do not think I would be talking to noble Lords today if they had not banned smoking in cinemas. I may have a husky voice, but I would probably be dead by now, I should think. These are things that have to be considered.
In the speeches so far, there has been scant respect for one thing that is very important to this country, and I hope it will be borne out in the speeches during the election campaign. This is a trading country, and trading countries require freedom in order to encourage the production of goods, to sell them and to market them correctly. If you do not like smoking, then ban it, for heaven’s sake. Do not try to pretend that this is going to deal with it—it is not going to deal with it. We have already seen the unintended consequences on the streets. In some of our best streets in the West End of London you see cigarette ends everywhere because people are smoking at lunchtime in doorways, smoking in the open air and smoking in groups; they are also smoking in their homes because it is unsatisfactory outside so that the smoke filters through badly constructed walls.
There are all kinds of aspects of this whole problem which have not been properly addressed, and I do not think that packaging is the answer. Should the noble Lord who introduced this amendment guide us towards the Lobbies, I shall follow him.
Lord Warner (Lab)
My Lords, I had not intended to speak in this debate, but I want to congratulate the Minister and the last speaker has provoked me to take us back to the time when I, as a Minister, was taking through this House the legislation banning smoking in public places and in the workplace. Some of the arguments which we heard from the last speaker and from the noble Lord, Lord Naseby, took me back to those times, the good old days when Parliament was challenged because it had the temerity to introduce legislation in this area to protect people’s health and, in particular, to try to protect children’s health. We heard the same old rubbish, if I may put it that way, on second-hand smoke, which was later proved scientifically to be as dangerous as direct experience of smoke. We can sit through these debates hour after hour, but the science does not change. The science is the same as it always was. It just gets better for those who want to control the consumption of tobacco. The Government are to be congratulated on taking this legislation forward, and I hope the House will support it overwhelmingly.
Before I sit down, I shall ask the noble Lord, Lord Naseby, whether he enjoyed the Eagles concert last July which he experienced as a guest of JTI Gallaher.
Lord Naseby
Yes. I declared the interest and went to one concert. I do not imagine the noble Lord has ever been to anything, anywhere, paid for by anybody else. I just hope he has always declared it.
Baroness Meacher (CB)
My Lords, I was not planning to speak today, but I have to rise to respond to the noble Viscount, Lord Falkland. If we were to have a logical system in this country for dealing with drugs, tobacco would indeed be illegal. We have lots of drugs that are illegal in this country that are infinitely safer than tobacco, and we all know that, if we were starting today, tobacco would be unlawful. So I simply do not accept the point that, simply because tobacco is lawful, we should allow the market to let rip—very far from it. We know that it is very difficult to make a product such as tobacco unlawful at this stage, but we need to do everything possible to protect the public from the most dangerous drug available in this country today.
Lord Blencathra (Con)
My Lords, I declare an interest as on the register of interests. It is a new interest—I recently joined the Lords and Commons Cigar Club, because I was concerned with how the Government have caved in to some of the fanatics in the anti-smoking brigade. They are fanatics, because they seem to hate e-cigarettes, which are good things for smokers to change to, just as much as they hate tobacco cigarettes. There is a powerful case against smoking—we all agree with that—but I would be more interested in their arguments on plain packaging if they would admit that e-cigarettes were actually a good thing for people to change to.
I deeply regret having to oppose my noble friend the Minister. In my 33 years in Parliament, he is the most knowledgeable Minister for Health that we have had in either House. In addition, he is invariably courteous and the most caring and decent man I have ever met. Therefore, I am sorry that, on this occasion, I think that he is wrong.
One knows that a government department or any organisation is scraping the bottom of the barrel to find arguments when we have 21 regulations over 23 pages, and a memorandum trying to justify them running to 103 pages and 388 paragraphs, most of which have nothing to do with plain packaging but make very powerful arguments against smoking in general. The department has scraped together every possible and bogus argument that it can to support the case. Many of the arguments that I have read in the impact assessment seem to be different from the contents of my noble friend’s speech. Paragraph 230 says that local authorities in 2007 spent £342 million on dealing with cigarette litter alone. What an extraordinary figure. That is absurd nonsense—but it adds to it by saying that plain packaging will lead to further savings on litter collection but that the department cannot quantify them. Dead right it cannot quantify them, because I think that they are quite spurious. This reminds me of the Home Office claim during the draft communications data Bill that it would bring about savings of £6 billion per annum, when that £6 billion was based on terrorist attacks which it considered would no longer take place if the Bill was passed.
All the evidence suggests that standardised packaging will lead to a big increase in the illicit market. That is the view also of Commander Roy Ramm, a former Metropolitan Police commander, who gave evidence to the Lords Select Committee. If even I as an amateur, on my £99 Canon printer, can now easily manufacture a matt standard cigarette packet—and, yes, I can do Helvetica and Pantone grey 42 at 8 point, as per the regulations—what will the big criminal gangs in Romania and Bulgaria do? At least they will increase the market for offset litho printing machines. The impact assessment makes tortuous assumptions to get out of admitting that it has not got a clue on the increase in illicit cigarettes that we will inevitably see. Paragraph 192 says:
“We conclude that there is a sizeable likelihood that there will be no discernible increase in the illicit market. However, we also conclude there is a chance that there will be an increase in the illicit market”.
I invite noble Lords to look at paragraph 192—that is exactly what it says. What a way to make policy. We do not know if it will be good or bad, but we will carry on regardless.
Then there is the Australian experience, which has been cited already, and which the Government call in aid even though it has been running for only 18 months.
Paragraph 93 of the impact assessment says:
“At this time it is difficult to conclude what the impact of standardised packaging on Australian smoking prevalence has been, due to confounding issues of a general decreasing trend and changes to tobacco prices”.
So, although we do not know whether it is working in Australia, we will carry on with our policy regardless. That is not a way to make policy. Australia is conducting a post-implementation review, but we are not even waiting to find the Australian Government’s conclusions.
All the evidence suggests that price is the big determining factor in people giving up smoking. With an increase in the illicit market and the fact that counterfeiters will be able to sell cigarettes more cheaply in the pubs, clubs and other outlets that they use, we are likely to see an increase in consumption of even more dangerous tobacco as criminal gangs are able to sell it more easily—they will use even cheaper, nastier tobacco. Nor will we be able to police it properly: the whole Codentify system is in jeopardy and will not be able to easily identify illegal and dodgy cigarettes. I say to the noble Lord, Lord Faulkner, that the system may not be perfect but it is better than nothing, which is the Government’s policy if they go ahead with plain packaging. The idea that a person in a pub will check the barcode before he buys a £5 packet of cigarettes, rather than go to a proper newsagents and get a £7.50 one, is just nonsensical.
I conclude that this is unfortunately a knee-jerk SI. We should wait until we get proper results and measured evidence from Australia. That is the only sensible way to make policy on this important issue.
Baroness Howarth of Breckland (CB)
My Lords, I had not intended to speak this afternoon, although I want to congratulate the noble Earl. I was with him on the beginning of this journey. I think that he has taken this through with due care and diligence. At the beginning, some of us feared that he would not be on the side of the anti-smoking brigade, but he has taken some of these measures very carefully into legislation. As the noble Lord, Lord Blencathra, was speaking, I realised that I was a fanatic—so as a fanatic, I will make just three points.
First, with the noble Lord, Lord Faulkner, I introduced the first Bill that tested the arguments in this House, the London Bill, when the noble Lord, Lord Faulkner, introduced the Liverpool Bill. At the time we were told very firmly by the smoking lobby that cancer was not caused by smoking, that we would actually take money out of the health service because of taxes and that we would lose money rather than gain it if smoking decreased. We received quite a lot of serious and personal accusations about false information. I began that journey there and was the person who brought forward the order to stop smoking in the Peers’ Guest Room. I think that many people have been grateful for that for a long time.
The second reason that I wanted to speak as a fanatic is that I think that there have been some spurious arguments this afternoon. I spent 10 years in the Food Standards Agency working with the food industry, which has had to change its packaging more than any other industry. If the smoking industry is not flexible enough to do as well as the food industry in organising itself to do something else when it loses this packaging, it does not deserve to be in business. Business has to be innovative.
The third reason I am a fanatic is that I have a niece who I brought up as a daughter. She has two children. The youngest has a heart complaint, which is very serious if she gets into any situation where there is smoke. I say that as a personal comment, but noble Lords will know how strongly and passionately I feel about the protection of our children. It seems extraordinary: if packaging with coloured outsides and attractive labels is not attractive to children and selling the product, why is the industry so keen to save it? That is the sheer, simple logic. If any noble Lords are wavering, perhaps they should wonder why so much money is being spent by the industry to protect packaging if it has no impact; it wants to protect it because it does.
So in some ways I suppose that I am proud of being a fanatic. I hope that your Lordships will be with the Minister and oppose the amendment in the name of the noble Lord, Lord Naseby, as I do.
The Lord Bishop of Peterborough
My Lords, I, too, was not planning to speak, but I am most grateful to the Minister for bringing this measure before us. I will make a very simple point. Packaging is designed to make the contents of the package attractive. This is about changing culture and changing the way that people think about tobacco and smoking. We all know the health arguments—they are indisputable and very clear. However, many young people, in particular, are still led astray and into dangerous behaviour—into self-harming of a very subtle but difficult sort.
It is our duty and responsibility in this place to care for what we in the church call the “common good”—to care for the well-being of society and, not least, of young people. It is very clear that making something look attractive will make it more appealing. Making it look, through its packaging, less attractive makes it less appealing. It is the simplest of all arguments. If people are allowed to dress up poison to look good, some people will take that poison. I ask noble Lords to please support this measure and oppose the amendment for the good of our young people and our society.
Lord Scriven (LD)
My Lords, I thank the Minister for putting before us these proposals to try to protect public health. I declare an interest—not that I am part of any cigar club, not that I have shares in any tobacco company and not that I have been wined and dined by a tobacco company. In the last few years, I have seen both my parents die through being long-term smokers, and I have seen the effect that that has had on families. Towards the end of my parents’ lives, when we were talking about their addiction to smoking, they explained that they were attracted to smoking when they were young. Once smokers are addicted, it is very hard indeed to get off the drug.
I want to follow the noble Baroness and the right reverend Prelate by spending a few minutes talking about why I think tobacco companies spend billions of pounds on marketing and packaging. It has become the fifth “P” in the marketing mix. For these companies, it is no longer just about price, promotion, product and placement; now, the package is the most important part in targeting young people. Research by RW Pollay shows that only 10% of people per annum change cigarette or tobacco brands.
On the history of packaging, the law suits, emails, memoranda and notes passed between Philip Morris and its marketing agency make it very clear that the company carries out research through focus groups on the colour, shape and design of its packaging, particularly for young people. Why does it do that? It does so because, if it can attract young people between the ages of 16 and 20—these are not my words but those of the tobacco industry—there is a high probability that the young people will not only start smoking but stay with the brand. That is what packaging is about: it is about addicting the young and keeping them with the brand; it is not about moving market share between brands.
Maybe my language is a bit harsh, but the packaging of cigarettes is about the marketing of death. Out of every two long-term smokers, one will die of smoking-related illness. I do not make that comment for effect or for headlines—the statistics show it to be the case. The evidence from Wakefield and Morley, who carried out research in Australia in the early 2000s, long before standardised packaging came in there, made it very clear that companies do a couple of things to try to ensure that people take up their brands. Companies can no longer advertise on TV, can no longer sponsor sport et cetera and can no longer have big billboards, so they look at the shape of their packaging. They experiment with colour—the lighter the colour, the more it is perceived that that brand is somehow safer, of milder tar. They use colour and shape for young people. They talk about the masculinity of colour and of shape. They go for women and say that certain colours and shapes can actually attract women.
Let us be very clear what this is about. This is not about waiting for evidence from Australia: there has been evidence since the 1950s, when Philip Morris used to spend $150,000—equivalent to $1 million today—on the shape and colour of its packaging to get people to take its product at a young age and to addict them for as long as possible. That is why I welcome what the Government and the Minister are doing.
We have been on a journey to try to deal with the harm. In answer to the noble Viscount, Lord Falkland, the reason that, as a former leader of Sheffield City Council, I would not have accepted this kind of approach for restaurants and licensing is because with this product, which is addictive, there is also a harm principle—harm not just to the individual concerned but to others in families and to others around people who smoke. The role of government is to balance that harm principle. I would never do that for people making a choice over a restaurant, but there is a difference with cigarettes and tobacco.
I conclude by saying that I sat with both my parents as they died. I have seen others who tried to get off this addictive drug, and have seen and read about the tactics of the tobacco industry. I understand that the small thing called a packet is now so powerful in getting people on to this drug that it is important that, as a Government and as legislators of this country, we do all we can to prevent those young children from starting on that journey of the marketing of death. It is for that reason that this is not just a sensible step but an essential one to save lives. We need to make sure that people do not use marketing to addict people to something that is both dangerous and effectively means that one out of every two smokers will die in the long run.
Lord Walton of Detchant (CB)
As a small boy in a mining village in County Durham, where my father was a schoolteacher, I was introduced to Woodbines at the age of 11 and started to smoke intermittently but frequently. When I went to medical school, I am horrified to tell your Lordships that we were advised by our teachers to smoke in the dissecting room to remove the smell of the carcasses which we were dissecting. The professor of physiology said that he could not live without smoking and that we were therefore fully entitled to smoke all the way through his lectures. Practically every medical student in those days did.
After graduation, when I eventually became second in command of a hospital ship sailing through the Mediterranean to Palestine and various other places, I could buy a 50-can of Senior Service cigarettes for one shilling and eight pence and that can would last me two days—25 a day I was smoking. None of us at that time knew the dangers of smoking. When I came back out of the Army and started to work in a hospital in Newcastle and then in the National Health Service, slowly but surely the work of Richard Doll and his colleagues on the desperate effects of smoking began to emerge. Eventually, thank goodness, I had the strength to give up smoking—with difficulty—in my late 30s. It was a struggle but I made that sensible decision and thank goodness I did; otherwise, I probably would not be here now.
Smoking tobacco is one of the most appalling health hazards of the age—there is no question at all about that. Not only does it cause cancer of the lung and of other organs such as the bowel and bladder, it has a very powerful effect on the cardiovascular system in causing coronary artery disease and stroke; it also has a desperate effect on the respiratory system in causing chronic obstructive pulmonary disease. It has a devastating effect on all kinds of illness. For that reason, I have been delighted to participate in debates in your Lordships’ House over the years leading to bans on advertising and on smoking in public places— bans that have all been introduced by Parliament in good sense. Any effort of any kind that can prevent young people taking up this appalling habit is well worth while.
I say to the noble Lord, Lord Naseby, that my friend Sir Cyril Chantler is not a master of the kind of market research that he talked about but he is an expert in epidemiology and in statistics, and his research clearly demonstrated that standardised packaging is,
“likely to lead to a modest but important reduction over time on the uptake and prevalence of smoking”.
Any measure that has that effect and prevents young people taking up smoking is well worth while, and for that reason I regard standardised packaging as another essential regulatory measure in addition to the ones that have been passed by your Lordships’ House and by Parliament in general in having the effect of preventing youngsters from taking up this appalling habit.
I therefore strongly support the regulations, I strongly support the excellent introduction by the noble Earl, and I am afraid that I regard this Amendment as having another devastating effect, which is without question not necessarily sponsored but supported by the tobacco industry, which has done so much to delay the development of these important public health measures, which have made such a great contribution to public health.
Lord Geddes (Con)
My Lords, like my noble friend Lord Blencathra, I declare an interest as a member of the Lords and Commons Cigar and Pipe Smokers’ Club—and proud of it. Also like my noble friend Lord Blencathra, I commend and congratulate my noble friend the Minister, who could not be a nicer man, on leading the debates on this subject and indeed on tobacco-related products in general so courteously over many years.
However, I am glad to support my noble friend Lord Naseby. I may be the only Member of your Lordships’ House who has experience of plain packaging in this country; I am trying to see whether anybody is going to disagree with me. That was when I first joined the Navy as a national serviceman aged just 18, when I was offered what were called “Blue Liners”. They came in totally plain packets and all there was on the cigarette was a minute blue line running along it—no name of the manufacturer, nothing of the sort. It certainly did not deter me from taking up smoking, nor did it deter any of my colleagues. I just do not believe that plain packaging will deter the young—who ought to be deterred; I could not agree more—from taking up smoking.
Lord McFall of Alcluith (Lab)
My Lords, I want to provide a few anecdotal points in this debate today. I was prompted by the remarks made previously about criminals engaging in illicit cigarettes. Eight or nine years ago, I went on a parliamentary visit to China and saw for myself the number of sophisticated cigarette factories that the Chinese were closing down every week. In China, 25 to 30 factories were closed every week. But in the UK, the total number of Customs representatives that we had patrolling China was exactly one, and that person was based in Hong Kong. I say that if the Government want to crack down on this illegal trading, which is supposed to be producing about one in three illicit cigarettes in London, they have to tackle it very robustly at HMRC level. That is the lesson that we have to learn from this.
I was a smoker when I was young. The noble Lord, Lord Geddes, made the point that plain packaging on cigarettes did not have any effect on him. It did not have an effect on him because—I say this with due respect—that was a number of decades ago. At that time, there was a culture of smoking. All of us smoked at the time; I smoked when I was in school. In fact, we smoked Woodbines. If anyone has seen the Woodbine packaging they will know that it was not very attractive, so the more sophisticated ones went on to Benson & Hedges or Marlborough. We had a particularly nasty teacher in the school, who was a smoker. He could detect the schoolboys who were smoking. He smelled our hands, called us smoky beasts, took our five Woodbines or whatever off us, and gave us a belt at the same time—not very fair. But lots of us were engaging in smoking, because that was a good thing to do.
I was brought up very short when my late father had to enter hospital with vascular problems. I visited the Western Infirmary in Glasgow—this was about 50 years ago—and to this day, I remember the name of the consultant and I remember the brutal message that he gave me. The consultant’s name was Mr Gray—Mr Reid, sorry. Mr Reid—I wrote it down, but that is what happens when you get into the House of Lords—said to me, “Your father is suffering from severe vascular problems and he will most likely have to have his legs amputated”. Indeed, he had both his legs amputated. Mr Reid asked me whether I was a smoker, to which I said yes. He said, “Listen, my boy, you look round every bed in my ward and you will see no one other than smokers, so the lesson I have for you and your friends is that the sooner you stop smoking the better”. That stayed with me. I did stop smoking and it was the best thing that I did in my life.
I commend the noble Earl for the work that he has done and say to him that this legislation has come not a day too soon.
Baroness Tonge (Ind LD)
My Lords, I cannot resist putting in my oar at this stage, very briefly. I have been associated with the anti-smoking campaign for many years, in the Commons and in the Lords. I gave up smoking in 1974, I think—the noble Lord, Lord Walton, will correct me—when the report was published on the links between smoking and lung cancer. I had taken up smoking as a teenager—I say this to support all those people who say that packaging is important in attracting young people to start to smoke—and was taught to smoke by my brothers and their friends in somebody’s back garden because they did not want a sister who choked and did not know how to do it. I do not think that we used the word “cool” in those days, but they wanted me to be cool and be able to smoke. It must have been a very rich friend of my brother, because the cigarettes that he produced to teach me were those wonderful multicoloured ones with gold tips—I think that they were called cocktail cigarettes; I shall not mention the brand. I had never seen anything quite so attractive in my life and, for a while, I was seriously hooked on them until I found out how much they cost. I then investigated something called Black Russian, which were even smarter, if that was possible. I as a teenager then knew perfectly well that it was not just the packaging but the appearance of the cigarettes that was attractive. They were very smart to be able to handle because they were different colours—some noble Lords are smiling; they obviously remember them.
What is important about this measure is that it tackles the appearance of cigarettes, which should be uniform. I wholeheartedly support it. I am glad that I gave up smoking all those years ago. I hope that the majority in this House will support the regulations.
The Earl of Erroll (CB)
My Lords, I do not smoke. I am married to a smoker and I do not like her smoking, but that is not the point. The point about legislation is its effectiveness. What worries me about gesture legislation is that it comes about because something ought to be done about something.
As far as I know, with the current packaging situation, we have about 19% of the country smoking. Without any advertising, packaging or public involvement, we have about 21% of the country using illicit drugs. It does not seem therefore that packaging is necessarily the determining effect. If anything, the more you drive smoking underground, the more attractive it seems to become. We should be slightly careful how we tackle it. Perhaps it should be looked at as part of the overall issue of how we deal with the problem of addiction and drugs instead of trying to target a little bit of advertising, with lots of people having preconceived ideas. I am not a qualified advertising man, but I think that the purpose of packaging is to try to make somebody switch from one brand to another. I do not think that it is what makes people smoke, but I could be wrong. The statistics suggest that we should not drive it underground.
Lord Jopling (Con)
My Lords, I do not want to trump the ace of the noble Baroness, Lady Tonge, when she said that she gave up smoking in 1974 but, in 1950, at the end of my first year at university, I became very ill. I spent 12 weeks in hospital with a chest complaint—the doctors thought that it was tuberculosis, but mercifully it was not. At the end of it, the surgeon came to me—he was the professor of thoracic surgery at Newcastle, George Mason; the noble Lord, Lord Walton, will remember him. He said to me, “I think you’re going to be all right but, tell me, do you smoke?”. I said yes. He said, “Well, you shouldn’t”. I said, “Oh, come on. My father’s been talking to you”. He said, “No, I haven’t talked to your father, but one of our students in the University at Newcastle”—it was Dr Strang, who again I think the noble Lord will recall—“has just written a thesis where he has claimed to find a connection between smoking and lung cancer. I’ve scanned it and I haven’t properly been through it, but I found it very compelling. You’ve done the first year of a science degree. You will understand not all of it but most of it, and I’ll give it to you”. The following day there arrived on my bed in the hospital the thesis by this young student. I read it and I was so horrified that I have never smoked a cigarette from that day to this—I was smoking about 25 a day at that time. Ever since then, I have taken a great interest in the connection between smoking and lung cancer. I heard what the noble Lord, Lord Walton, said about the horrors of tobacco, which I thoroughly support. All the time since, I have listened to the arguments one way or another, as we have listened to the arguments here today.
I come back to what the noble Lord, Lord Faulkner of Worcester, said earlier about the publicity of the tobacco industry. I remember so well through the 1960s and 1970s, when I was in the other place, what I can only call the wicked advertisements, publicity and PR of the tobacco industry. I think the connection between smoking and lung cancer became clear in the 1950s, yet in the 1960s and 1970s the tobacco industry still tried to pretend that there was no danger whatever. That really was wicked.
I have not, I confess, examined the arguments about packaging this time but I listened to the arguments tonight. Bearing in mind the negative start I made—I admit it—when looking at the publicity of the tobacco industry, it seems that this is an experiment well worth trying. For that reason, I most strongly support the Government’s line tonight.
Lord Stoddart of Swindon (Ind Lab)
I have been very patient. Let me first declare my interest: I am a member of the Lords and Commons Cigar Club. Although I am a non-smoker, they tolerate me. I suppose I am an associate member rather than a full one.
The more I have listened to this debate—and I have listened to the whole of it—the more I feel that it should have been about a Bill to abolish tobacco. It has not really been about packaging but about the evils of tobacco and the tobacco companies. The attack on the tobacco companies by the noble Lord, Lord Faulkner, was one of the best I have ever heard him make. No doubt they will take note of what he said. However, the noble Viscount, Lord Falkland, was right. If we believe that tobacco is so dangerous—the noble Lord, Lord Walton, had no doubts about how dangerous it is—we should bring forward a Bill to ban tobacco as a dangerous drug. So long as that is not done, all this talk about tobacco is sheer hypocrisy. The Government are hypocritical about it because they do not want to lose the money that it gives to the Exchequer. They are trying to get rid of tobacco smoking but they will not come out and say so in the open. They will do it by stealth. This order is one of stealth.
I have been in this House since 1983 and in that time have spent some 25 years talking about tobacco and restrictions on it. Indeed, I remember that during the last Government I sat in a committee on the same side as the Minister, who then opposed the—what was it called?—ban on tobacco display. We were on the same side at that particular time, as he will recall. That went through but, of course, it has not yet been fully implemented. It does not come fully into law until April. Before we have the display ban, we now have the plain packaging ban. It would be useful if we could implement previous legislation before we start bringing forward more legislation. Does the House not think that that is sensible? The Government obviously do not think that it is.
Lord Hunt of Kings Heath
My Lords, I sense that the House is ready to come to a view on this very interesting matter, and I am looking forward to the response of the noble Earl, Lord Howe. I should start by declaring my interest as president of the Royal Society for Public Health.
Not surprisingly, noble Lords will know that I support the regulations, for which the Labour Party campaigned vigorously. The noble Lord, Lord Stoddart, is right that they come on the back of a successful amendment in your Lordships’ House to ban smoking in cars when children are present. Like the noble Earl, I pay tribute to the noble Lord, Lord Faulkner, the noble Baronesses, Lady Tyler and Lady Finlay, and the noble Lord, Lord McColl, for their outstanding work on this issue in your Lordships’ House.
I have some questions to put to the noble Earl, Lord Howe, in relation to the effectiveness of the measure, following the debate. That is the fair test that we need when reaching a decision. First, can the noble Earl confirm that opinion polls have shown very strong support among the public for this policy? Does he agree with me that, if we look back at the measure we passed in relation to smoking in cars with children present, again the public showed enormous support for the action that was being taken? It is not as if we have an authoritarian measure, imposing a sort of public-health view on the public; what we have here is a sensible measure that the great majority of people in this country support.
I turn now to the evidence. I listened with care to the comments of the noble Lord, Lord Naseby. Does the noble Earl stand by the evidence contained in the impact assessment published with the Explanatory Memorandum? Is it his view that, far from what the noble Lord, Lord Naseby, said, the evidence is clear about the Australian experience so far? Industry leaders have talked about market decline in Australia. On a point made by the noble Lord, Lord Walton, I refer to Sir Cyril Chantler. He may not be a marketing expert, but, goodness me, he is a man of enormous reputation in his ability to sift evidence, so can the noble Earl confirm that Sir Cyril Chantler took a highly dispassionate view on this issue? He made himself available to people on all issues. It is not an emotional report; it is a dispassionate, weighing up of the evidence.
On the issue of illicit trade, can the noble Earl confirm that the HMRC concluded that standardised packaging is not likely to have a significant effect on that? In answer to the point raised about the paragraph in the assessment, is his reading of it that, on balance, it is “very unlikely” to have an impact on illicit trade? The words, “very unlikely” mean that obviously there is a small percentage chance that it might not. That is my reading of that paragraph. Will he confirm that I am right about that?
As for the view of the noble Viscount, Lord Falkland, that because it is legal we should therefore not place any controls around it, I fail to understand the argument. Driving is legal, but we do not recoil from setting speed limits. There is general support for seat belts. Is that not the same issue? It is a legal activity, but we are right to place constraints on it to safeguard people from its worst effects.
On whether the packaging industry will be hit by the change to plain packaging, can the Minister confirm that cigarette packaging accounts for less than 5% of all packaging cartons manufactured in the UK—and, of course, packs will still be required in future? Perhaps he can then address points made about questions asked in the other place that were not answered. There is a question about the process and timetable to be followed once the regulations, if accepted by your Lordships’ House, are put in place.
The question of enforcement was raised today. I understand that several local authorities have advocated the need to ensure that trading standards officers are equipped and trained to implement the measure. That is clearly important, and perhaps the Minister can say something about the programme by which the Government intend to help local authorities once the regulations come into law.
My view is that the noble Earl, Lord Howe, in his speech today, in the regulations, in the Explanatory Memorandum and in the impact assessment has made a very powerful case for why the regulations should be passed. I sincerely hope that the House will listen to that and pass the regulations.
Earl Howe
My Lords, this has been a very powerfully argued debate. I am grateful to those noble Lords who have welcomed the regulations for the many supportive points that they have made. I also thank my noble friend Lord Naseby for setting out his objections and concerns with his customary clarity and courtesy. Several noble Lords have already done part of my job for me in responding to my noble friend’s critique, but I believe it to be incumbent on me to address directly all the matters that he raised, as well as the questions posed by other speakers.
I turn to the issue of the illicit trade and the evidence from Australia. Contrary to what the tobacco industry would have people believe, the evidence from Australia does not show an increase in the illicit market in that country following the introduction of plain packaging. There have been a number of criticisms of the tobacco-funded reports on that issue. It is therefore useful to consider the data provided from official Australian government sources. Official data from Australia on the use of illicit tobacco show a drop in those aged 14 years and over currently smoking illicit tobacco following the introduction of plain packaging. From 6% using illicit tobacco in 2007, the figure dropped to 5% in 2010 and then to under 4% in 2013—after plain packaging had been introduced.
A study published in BMJ Open analysed data from smokers before, during and one year after the introduction of plain packaging in Australia. The proportion of smokers reporting current use of illicit tobacco did not change significantly after plain packaging was introduced. I assure the House that the Government have looked very carefully at the potential impact on the illicit market. Tackling tobacco smuggling is a government priority. I can tell the noble Lord, Lord McFall, in particular, that, due to the fantastic work of HMRC and others, there has been a long-term decline in the tax gap for tobacco products over the past decade. The potential impact of standardised packaging on the illicit trade was considered extensively by HMRC, Sir Cyril Chantler, the Select Committee’s inquiry on smuggling, the Trading Standards Institute and RUSI. They all concluded that standardised packaging will not have a significant impact on the illicit market. HMRC has undertaken a detailed assessment of the potential impact of standardised packaging on the illicit market, which is the most comprehensive and reliable information available. Its assessment is that:
“We have seen no evidence to suggest the introduction of standardised packaging will have a significant impact on the overall size of the illicit market or prompt a step-change in the activity of organised crime groups.”
The Trading Standards Institute, which has extensive experience of tackling illicit tobacco at retail level, said in its consultation response that it,
“is aware that the tobacco industry regularly argues against standardised packaging for the reason that it will inevitably lead to an increase in the illicit tobacco trade. The Institute does not regard this as a valid argument”.
My noble friend referred to the system known as Codentify. That system is a voluntary security feature developed and controlled by the tobacco industry. We know that HMRC is starting to make use of the system to assist in identifying illicit tobacco. We are working across government to ensure that anti-counterfeit systems that are useful to HMRC and other enforcement agencies now and in the future can continue to feature on standardised packs. That will require such anti-counterfeit systems to be put on to a statutory footing.
My noble friend suggested that the prevalence of smoking had increased in Australia and that standardised packaging had not helped. Australian government figures show that smoking prevalence is in fact at an all-time low since the implementation of standardised packaging, with a 15% drop between 2010 and 2013. This change is likely to be attributable to the cumulative effects of a range of policies, including standardised packaging.
My noble friend also referred to the study by Kaul and Wolf apparently showing that smoking had increased among teenagers. The Kaul and Wolf report was funded and its release was closely directed by Philip Morris International, part of the tobacco industry. It was based on a specific survey of population smoking that is not intended to provide reliable estimates of smoking among teenagers, and the sample size was very small. It also compared figures immediately before and after implementation, and the effects of standardised packaging are more likely to be gradual. It is not a reliable study, we suggest, from which to draw any conclusions.
My noble friend Lord Blencathra urged the Government to wait for more evidence from Australia. He may like to know that studies in Australia have found that smokers buying standardised packets reported being more likely to prioritise quitting than smokers using fully branded packs. Calls to quit lines have increased. Smoking has decreased in outdoor cafes and fewer packs are being displayed on tables.
What has happened to tobacco sales in Australia? There have been suggestions that sales have gone up. Sales of tobacco can be measured in many different ways—sales by manufacturers to wholesalers, wholesalers to retailers or by retailers to consumers. Different pictures of sales emerge depending on the source of the data and the timeframe. In fact, official government data from Australia suggest that a continuing decline in per capita consumption of tobacco products has taken place. Commonwealth Treasury figures show that excise and customs clearances of tobacco declined by 3.4% in 2012-13, and that is generally regarded as the most reliable indicator of population sales.
I turn now to the print industry and my noble friend’s complaint that more time should be given to the print industry to enable a proper lead-in period. Standardised packaging is not a policy that has been sprung on the print industry. It has been under discussion since 2008 and two public consultations have been held on the subject, as I mentioned earlier. The regulations would come into force in May 2016, which provides the print industry with a lead time of over a year. I confirm to my noble friend Lady Tyler that the regulations will be implemented at the same time as the European directive is transposed in May 2016, so the industry does not have to undergo two changes to its manufacturing process.
The previous changes to tobacco packaging, such as the requirement for picture warnings in 2008, showed that a 12-month period in which to sell through old stock is appropriate and that stock sells through more quickly than one year. In answer to my noble friends Lord Naseby and Lord Blencathra, it is not true to say that standardised packaging will make it easier to copy packs and therefore make things easier for counterfeiters. Standardised packaging would remain complex to counterfeit. The packs will continue to feature large and complicated to reproduce picture health warnings and will retain all the security features currently on packs, including covert anti-counterfeit marks. The European Union directive includes provisions on the printing of labels. As I said, we have given very careful and measured consideration to that. We believe that the synchronised introduction of the provisions in the directive with the coming into force of these regulations is a sensible course.
Mention was made of intellectual property issues. As I said earlier, we have given very careful and measured consideration to all legal aspects of the policy, and this includes intellectual property aspects. These regulations regulate the use of tobacco branding, which includes trade marks. I emphasise that we regard tobacco as a unique consumer product in this context because it is a uniquely harmful consumer product. For the record, we do not consider that these regulations breach intellectual property laws or our international obligations in relation to trade marks.
I listened with care to my noble friend Lord Geddes, who argued from experience of his National Service that plain packs would not deter smoking. He referred to “Blue Liner” cigarettes, which I was interested to hear about. However, there are several key differences with regard to our proposals. First, the regulations we are considering mandate health warnings, which did not appear on “Blue Liner” cigarettes. Secondly, there is the colour of the packaging. Our regulations take into consideration the extensive market research the Australian Government undertook to determine the most effective designs for standardised packaging. Of the eight different colours tested during the research, dark brown packaging was the least appealing and thought to contain cigarettes most harmful to health. After carefully considering the research, our regulations adopt the same dull brown colour as the packs required in Australia.
The noble Viscount, Lord Falkland, referred to the possibility of unintended consequences. We believe very firmly that the benefits of these regulations far outweigh any of the unintended consequences that might come from introducing standardised packaging. In some cases, we are not convinced that certain predicted unintended consequences are anything more than scare stories. The department has run two consultations on standardised packaging, which contributed to our understanding of all the relevant factors in making our decision.
My noble friend Lord Blencathra queried the Explanatory Memorandum. I think he might have been referring to the impact assessment, which was rated green by the Regulatory Policy Committee, meaning that it is fit for purpose.
The noble Lord, Lord Hunt, asked about public support for standardised packaging. Multiple surveys have shown that the public support it. A YouGov poll in spring last year, with a representative sample of 10,000 people, found that 64% of adults in England supported standardised packaging while 11% opposed it. Even among smokers, more people were in support of or neutral towards standardised packaging than opposed it. After the implementation of standardised packs in Australia, support for the policy increased from 28% to 49% among smokers. Survey data from Australia show that more smokers approve of the policy than oppose it.
The noble Lord, Lord Stoddart, made a point that I have heard him make powerfully before—that alcohol is, in fact, the most addictive and harmful drug, not tobacco. I just say to him, as mentioned in my speech, that all smoking is addictive and harmful to health, and half of regular smokers are eventually killed by smoking-related illness. That is simply not true of other consumer products such as alcohol. Tobacco is being treated uniquely in regulatory terms because it is a uniquely harmful consumer good. All smoking is addictive and harmful to health. Therefore, to be absolutely clear, we see the introduction of standardised packaging as a unique approach to tackling smoking and its appalling effect on public health. It fits within a comprehensive tobacco control policy.
We are proud that smoking rates are the lowest ever recorded in this country, and my noble friend Lord Naseby was right to point that out. However, we cannot rest on our laurels. In other parts of the world we have seen that if Governments take their foot off the pedal with tobacco control, smoking rates can go up. For the good of public health, we want to continue our policy action to see smoking rates continue to fall, which is why I once again commend these regulations to the House.
Lord Naseby
My Lords, I should like, first, to thank my noble friend on the Front Bench for addressing the four points that I raised and were vital to be addressed. I shall comment on only two short matters because I sense that the House wants to move on.
My first comment is on youth smoking, which a number of Members raised. One may dispute this or not, but the facts are that the Australian Institute of Health and Welfare has stated that youth smoking rates have not declined as a result of standard packaging; in fact, they are at a seven-year high. Secondly, there is the matter of illicit tobacco consumption, which is the issue that worries me most. One has only to go round a building site in the United Kingdom today. I recently did so and checked a bit. Illicit tobacco is being offered on many building sites in this country; it is costing the Revenue and genuine companies a great deal. Not only that, when we look at Australia specifically, which we have done this evening, we see that by mid-2014 in that country illicit tobacco consumption stood at an unprecedented 14.7% of the market—25% higher than it had been in 2012. Whatever anyone says, as far as the industry is concerned—after all, it knows exactly how many cigarettes are produced and sold—that is a crucial area, and a crucial area of public health. Unless someone does something about that, we may well find increasing numbers of counterfeit cigarettes imported into this country. That will have an effect on public health because they kill even quicker than the genuine ones do.
I am grateful to all those who have taken part. I particularly thank my noble friends who have supported me this evening. Some home truths have been spelt out by the noble Lord, Lord Stoddart, the noble Viscount, Lord Falkland, the noble Earl, Lord Erroll, and a number of other colleagues who have supported me. The key issue, however, is a little wider than the tobacco industry, because what this Motion does, if it goes through—I imagine that it may well do so—is totally to undermine intellectual property rights, which are the very foundation of our modern capitalism. Intellectual property rights are fundamental to every business and defend a company from rogue competition—wherever it may come from—and, in my view, from totally misguided Governments on occasion.
I have to decide whether to divide the House. I take note of the fact that in another place nearly 25% of that Chamber voted against the Motion. I sense this evening that about 25% are against this Motion and I thank that 25% for the support they have given me. Nevertheless, it does not seem to me to be terribly productive for us all to march through the Lobbies and for me to get only 25% of the vote, or thereabouts, so with the leave of the House I will withdraw my amendment.