British American Tobacco

Debate between Lord Ahmad of Wimbledon and Baroness Thornton

Tuesday 17th October 2017 Lords Chamber

[Baroness Thornton]

To ask Her Majesty’s Government what assistance they have given British American Tobacco in its challenge to the claim for unpaid VAT brought by the government of Bangladesh.

[The Minister of State, Foreign and Commonwealth Office (Lord Ahmad of Wimbledon) (Con)]

My Lords, Her Majesty’s Government have engaged with the Government of Bangladesh over discriminatory action against British American Tobacco Bangladesh. This engagement includes discussions at senior official levels since February 2015. The engagement was in line with the guidelines of the World Health Organization’s Framework Convention on Tobacco Control. We take very seriously our obligations as a party to the FCTC and guidance in this regard was issued to all posts in December 2013 and again in May 2017 to assist compliance.

[Baroness Thornton (Lab)]

I thank the noble Lord for that Answer, but I beg to disagree that this is in line with the United Nations guidelines. I was prompted to ask this Question because the high commissioner in Bangladesh found time to champion British American Tobacco. Given that the activities of tobacco companies in Bangladesh are estimated to cause around 100,000 premature deaths a year, does the Minister really consider that the high commissioner’s actions were consistent with the UK’s obligations under Article 5.3 of the Framework Convention on Tobacco Control, to which we are a proud signatory and participant and which commits parties, including the UK, to protecting public health policies from the commercial interests of tobacco companies?

[Lord Ahmad of Wimbledon]

I have had the good fortune to meet our high commissioner on the ground; she engages in the widest possible way to ensure that both the diplomatic and the business priorities of our interests are protected. I pay tribute to her work in Dhaka in this regard. The noble Baroness referred to guidance. Perhaps I may refresh memories on this issue. The guidance in question is the guidance I have referred to; namely, what we issue to all posts. Any post should not:

“Engage with foreign governments on behalf of the tobacco industry”—


there is an exception—

“except in cases where local policies could be considered protectionist or discriminatory”.

In this regard, the actual issue was of whether British American Tobacco Bangladesh was issued with a retrospective VAT demand of approximately £160 million. Indeed, both the law ministry and the Finance Minister of Bangladesh agree that there is no case to be answered.

--- Later in debate ---

[Lord Ahmad of Wimbledon]

I hear what the noble Lord says. I assure him that we are one of the leading nations in the developing parts of the world, of which Bangladesh is a good example, and want to ensure Bangladesh’s transfer to being a middle-income country. We are in favour of ensuring that all legal taxes which need to be paid are paid, particularly by British companies. This was a retrospective VAT demand. As I have alluded to on a number of occasions already, the law ministry disagreed with the action of the NBR, saying that there was no scope to demand VAT retrospectively.

[Baroness Thornton]

My Lords—