Illegal Alcohol and Tobacco Sales

Debate between Brandon Lewis and Ian Paisley

Tuesday 27th March 2012 Westminster Hall

[Ian Paisley (North Antrim) (DUP)]

I, too, congratulate the hon. Member for Hereford and South Herefordshire (Jesse Norman) on securing this important and timely debate.

The House should face up to the reality that the smuggling of and trade in illicit cigarettes, tobacco and alcohol is a multi-million-pound criminal enterprise. It is not some car boot sale nonsense; it is a significant endeavour. The House will have its head in the sand if it does not recognise that fact. It loses the Treasury tens of millions of pounds in revenue, which could be spent on our schools, roads, hospitals and other areas, and we must recognise that.

I serve on the Select Committee on Northern Ireland Affairs, which recently took evidence on the trade in smuggled tobacco and alcohol. One company supplied evidence to show that, in Northern Ireland alone, 170 million illegally gotten cigarettes are smoked every year. That loses the Treasury £42 million every year and has lost the company whose product has been counterfeited £12.5 million. That is a staggering loss in one little part of the United Kingdom.

I thought that it was significantly bad that 17% of all cigarettes smoked in Northern Ireland had been illicitly traded, but in parts of England and the border counties the figure is 24%. In Devon and Cornwall, it is 13%, and in London, it is 20%. This is a massive criminal endeavour and some of the people who make money out of it are the worst, most cantankerous, nasty and evil people imaginable: as quick as they would sell people cigarettes, they would slit their throats. The House has to wake up to the fact that they are engaged in a serious, criminal endeavour. The Government should exercise the most serious measures against them, and we should encourage the Treasury and the Government in that regard.

As I have said, the timing of the hon. Member for Hereford and South Herefordshire in securing the debate could not be better. The Northern Ireland Affairs Committee today published its report on the smuggling of counterfeit cigarettes, tobacco products and alcohol and on the illicit fuel trade. This massive trade is central, so we need to take off our gloves and get stuck into countering it.

[Brandon Lewis]

I agree wholeheartedly with the hon. Gentleman. Does he agree that evidence from around the world shows that increasing regulation, whether via plain packaging or by putting up duty on cigarettes and tobacco, can simply increase the illegal trade? Ireland’s budget of 2010 recognised that by not putting up duty. Rather than increase duty or introduce plain packaging, the Government should follow the model suggested by my hon. Friend the Member for Hereford and South Herefordshire and use the UK Border Agency and other agencies to crack down properly on the illicit trade itself.

[Ian Paisley]

The hon. Gentleman will find that I am not arguing against his views—he is right—but we need to set out clearly how significant the problem is. Do we tax the product to the extent that it makes the smuggler’s job all the more easy, or do we recognise that there are things that the Government and we as a nation can do to address the problem?

The problem is not helped by the fact that I can drive my car to France or Belgium, fill it to the gills with cigarettes or alcohol and bring it back to this island and sell those products illegally. There should be a complete stop on a person being able to bring back a boot full of wine, alcohol and cigarettes and claim, “These are for me.” That is utter nonsense. Everyone knows that they are being brought back to be sold either on the street illegally or to their friends and neighbours. We have to make sure that such activity is stamped out.

The Government should be rigorous and ensure that, if people buy cigarettes and alcohol, they should buy them in this nation, pay tax on them in this nation and smoke and drink them in this nation, rather than allowing them to circumvent tax policies. It makes sense that I can probably buy twice as much legally in every other part of Europe than I can buy here because our tax policies are so severe. If they are severe, we need to make them work on this island.

--- Later in debate ---

[Ian Paisley]

The tobacco industry is able to speak for itself, but one of the reasons why it is annoyed is that this is an infringement on its trading rights, its branding and all the things in which it has invested over the years. It would be wrong to turn around and say that we can just remove those things overnight.

The industry argues that it would damage the actual trade, so let us look at that and what it costs. In my constituency, more than 1,000 people are directly employed in the tobacco industry. In Manchester, another 800 people are directly employed in the manufacturing of cigarettes. If we are not careful, those jobs will go to eastern bloc countries and to Europe—they will move out of this country. Will that affect the number of people who smoke cigarettes? Not one jot. The same number of people will continue to smoke cigarettes, but they will be manufactured elsewhere. We will be the biggest losers, because we will have lost the jobs, the tax and the pay-as-you-earn tax.

[Brandon Lewis]

Again, I fully support what the hon. Gentleman is saying. The point that he has just made is backed up if we consider the packaging issue. A lot of the cigarette packaging around Europe is produced in this country, and therefore a huge number of jobs would be at risk if plain packaging were introduced. One of the reasons why companies are so protective of their packaging is brand protection. Bearing in mind that cigarette sales are legal and it is a legal product, unless the Government make cigarette sales illegal, companies feel that they have a right to protect their brand, as that is what protects sales and jobs. Companies argue that a clear definition of brand prevents some of the illegal trade that we are trying to stop.