Health and Care Bill

Debate between Lord Young of Cookham and Lord Hunt of Kings Heath

Consideration of Commons amendments
Tuesday 5th April 2022 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, I rise briefly to support Amendment J1, so ably moved by the noble Lord, Lord Crisp. I also join him in thanking my noble friends Lord Howe and Lord Kamall, the two Ministers involved, for their engagement with movers of the amendment on Report and for the genuine attempt they made to seek agreement to narrow the small gap between the Government’s position and ours—an attempt which, I fear, was blocked by HM Treasury.

On this subject, on Report, my noble friend Lord Howe said:

“Our strong preference is to continue with high tobacco taxation and excise as the best means and the most efficient process through which to generate revenue that can be put back into public services.”


I wish I shared his optimism, given the current pressure on the public purse and the recent experience with the levelling-up White Paper, published in February. The Institute for Fiscal Studies said that

“the White Paper contains no new funding; instead, departments will be expected to deliver on these missions from within the cash budgets set out in last autumn’s Spending Review. Departments and public service leaders might reasonably ask whether those plans match up to the scale of the government’s newfound ambition—particularly in the face of higher inflation.”

The same is true for tobacco control. Even before the rise in inflation, budgets for tobacco control and smoking cessation had been cut by a third since 2015. Already by 2019, it was clear that the Treasury’s claim that the tax system would provide funding for tobacco control was misplaced. That is why, when the Government announced the smoke-free 2030 ambition in 2019, they also promised to consider a polluter pays approach to funding tobacco control and smoking cessation, which is the substance of the amendment before your Lordships this evening.

On Report, my noble friend Lord Howe said:

“The proposal may look simple on the surface but it is complex to implement. It may also take several years to materialise.”


Our proposals build on the pharmaceutical pricing scheme operated by the Department of Health, which is a far more complex industry with far more complex products. If the Department of Health can successfully run a scheme for pharmaceutical products—an industry and set of products that are complex and evolving—I fail to see why it cannot operate such a scheme for cigarettes. These are simple, commodity products produced by an oligopolistic industry, with four main manufacturers responsible for more than 95% of sales.

The noble Lord, Lord Stevens of Birmingham, who I am pleased to see in his place, said on Report that

“if it is deemed appropriate to have a form of price and profit regulation for the medicines industry, which delivers products that are essential and life-saving, it does not seem too far a stretch to think that an equivalent mechanism might be used for an industry whose products are discretionary and life-destroying.”—[Official Report, 16/3/22; cols. 294-98.]

I agree. However, I also accept that further investigation of our proposals would be needed, which is precisely why a consultation without commitment is the appropriate way forward, as the all-party parliamentary group’s amendment proposes.

I hope that, even at this late stage, my noble friend might demonstrate some flexibility in order to try to bridge the narrow gap between the Government’s position and that in the amendment.

[Lord Hunt of Kings Heath (Lab)]

My Lords, I, too, support the noble Lord, Lord Crisp, in his amendment. My noble friend Lord Faulkner would of course have been in his place to speak in favour, but he is unable to be here, so perhaps I may make a few remarks which I think he might have made.

Going back to Report, the Minister suggested that the tobacco industry is already required to make a significant contribution to public finances through tobacco duty, VAT and corporation tax. But I do not think that states the case as accurately as possible, because we know that tobacco manufacturers are skilled at minimising the amount they pay. For example, between 2009 and 2016, Imperial Brands, the British company that is market leader in the UK, received £35 million more in corporation tax refund credits than it paid in tax. The largest amount of tax collected by the Government comes from excise tax and VAT. This, of course, is not paid by the manufacturer; it is passed on to the consumer. That was a point HM Treasury made in 2015, when the Government consulted but, alas, decided not to put an additional tax on tobacco products to pay for tobacco control.

My understanding is that, in total, smokers spend nearly £11 billion on tax-paid tobacco products, more than three-quarters of which goes to the Government in taxes. We know that the majority of smokers are not well off; they often suffer multiple disadvantages. We must compare that huge tax take with the pitiful amount that is actually spent by the Government encouraging people to stop smoking. It is certainly not enough to make England smoke-free by 2030.

I listened carefully to the Minister’s introductory remarks. The noble Lord, Lord Kamall, objected to the terms of the amendment of the noble Lord, Lord Crisp, because, he said, the independent review had not yet reported and therefore we were seeking to pre-empt what the review will say. I thought the noble Lord, Lord Crisp, responded to that incredibly well. I do not think he is seeking to pre-empt the review; his amendment asks the Government to consult on recommendations in the review if the Secretary of State thinks that it is required. It is left entirely in the Secretary of State’s hands to act according to whether he or she considers that the recommendations should be consulted on.

This is a sensible amendment, it points us in the right direction, and I hope that, even at this late stage, Ministers may be sympathetic.