Consumer Rights Act 2015 (Enforcement) (Amendment) Order 2023

Baroness Kramer Excerpts

Wednesday 12th July 2023 Grand Committee

[Baroness Kramer (LD)]

My Lords, I confess that usually when I speak on a statutory instrument I am trying to look for why it really should have been in primary legislation, not secondary. In this case, this strikes me as a genuine SI. It is almost a moment of great excitement.

I am very happy to say that these Benches support this measure, which, as the Minister says, enable trading standards to investigate more effectively illicit tobacco sales by small operators and retail outlets and to refer evidence of contraventions to HMRC for action, with potential penalties up to £10,000. We know from past surveys that some 18% of tobacco sales have been illegal. That leads me on to a series of questions to the Minister for further clarification.

At this time of cost of living pressures, some people will be tempted to buy cheaper, illegal or illicit cigarettes. I ask the Minister: is illicit activity increasing now at this time of increasing cost of living pressures, or are we continuing to see a diminution? I would be interested to know what the impact is and whether there has been any significant change that requires aggressive action.

When will the relevant guidance for businesses be published? I do not believe that is available yet. Indeed, when will the sanctions be implemented? Perhaps the Minister could give us some sense of the timetable. There is also no statutory review clause, so how will we know how effective these new powers are? If the powers are granted but are generally not used, I think the Minister knows that potential offenders will feel doubly empowered by new rules that then turn out to have no teeth, so it seriously matters that we track this. When we are tracking, will there be any measures to let us estimate the deterrence effect of the measure? That is probably one of its most important aspects.

Behind illegal sales by small and local outlets there is sometimes just a very small-scale operation, but at times it is very much linked to organised crime on a major scale. How is that link going to be investigated as trading standards becomes more engaged in this process?

The sale of tobacco to children is obviously a serious concern to all of us. Are outlets engaged in underage sales to be a particular target? Will there be any prioritisation, as far as the Minister is aware? Will enforcement involvement include the sale of non-compliant tobacco, blunts and shisha, which have sometimes been seen as a way to manoeuvre around the rules in the recent past?

The tobacco industry has a history of offering to help, or provide intelligence to, local trading standards. I have to say that civic society groups that are attempting to decrease smoking tend to view that with deep suspicion as a conflict of interest, designed to basically push tobacco sales from the illicit side but into legal purchasing rather than discouraging purchasing as a whole, and to improve the industry’s general standing and reputation. I wonder how that is going to be handled.

Does this measure also impact on non-compliant sales of e-cigarettes and vapes? We know these products are increasingly being targeted at non-smokers and youngsters, even though we have little information at the moment on what the effects are of the long-term usage of e-cigarettes and vapes.

The Government have a target to make the country free of tobacco smoking by 2030, and we support their goal of achieving a smoke-free generation. Smoking, as the Minister has said, remains a leading cause of premature death and is related to many severe and chronic illnesses and damages lives, as well as being a drain on the NHS. However, the pace of decline in smoking that followed the 2007 ban on smoking in English pubs and clubs has dwindled. How much is this measure expected to focus on reducing overall smoking? I confess that there is always a slight suspicion when HMRC is involved that the focus will be more on increasing revenues to HMRC than on reducing the overall activity—in this case, just moving it from the illicit arena into the legal arena.

If the Minister could add a little more enlightenment, we on these Benches are happy to support the statutory instrument.

[Lord Livermore (Lab)]

My Lords, we support this measure. I shall reiterate a couple of facts mentioned by the Minister. Smoking is the biggest cause of preventable death in the UK. It accounts for some 76,000 deaths each year, with half of all smokers dying of a smoking-related illness. It is estimated that smoking costs NHS England over £2.5 billion every year. Alongside high-level policy, such as the smoking ban introduced by the last Labour Government in the Health Act 2006, evidence suggests that high duty rates have had a positive impact by reducing the number of people who start smoking and increasing the numbers seeking to cut down and quit.

With 21% of cigarettes sold in the UK currently illicit, clearly the illegal trade in tobacco products undermines these important contributions to public health. It deprives the Exchequer of vital revenue and reduces the deterrent effect of high duty rates. We therefore support harsher penalties for those who seek to avoid paying such duties and commensurate powers for trading standards to tackle those who procure, supply and distribute illegal tobacco and profit from the illegal trade.

I would like to ask the Minister three questions. First, she mentioned that the combined application of fines, powers to seize illicit products and the new sanctions is designed to have a deterrent effect on retail outlets and street-level distributors. This point was also made by the noble Baroness, Lady Kramer. Are there any plans to communicate these powers to potential offenders so that the deterrent effect might be enhanced? Secondly, where illicit product is sold through retail outlets, what data exists on whether the owner of a retail outlet is aware of such sales versus illicit sales carried out surreptitiously by an employee, and therefore whether enforcement measures are always correctly targeted? Finally, what communication, co-operation and co-ordination exists between HMRC and the Border Force to tackle the supply of illicit product at source?