Tobacco and Vapes Bill

Earl of Leicester Excerpts

2nd reading
Wednesday 23rd April 2025 Lords Chamber

[The Earl of Leicester (Con)]

My Lords, I declare that I am a non-smoker, but I am also not a supporter of the Bill. I tried unsuccessfully to stop my children taking up the habit, though I am pleased to report to the noble Baroness, Lady Bennett of Manor Castle, that my three eldest children, aged 26, 24 and 21, have all given up this year and were therefore not hooked for life.

The Bill as currently drafted will have profound repercussions that will be felt by consumers, retailers and law enforcement agencies across the UK. It will, I am afraid, not wholly contribute to the improved health outcomes that a majority of noble Lords in the debate expect, because it will not stop smokers smoking. Granted, it will undoubtedly reduce the number, but, again, not to the levels expected. If the Government are committed to reducing smoking rates, they should focus on stronger enforcement action against those criminals trading in illegal tobacco, as well as clamping down on rogue traders who for years have been selling tobacco to minors. I am afraid that the £10 million the Minister referred to that is being allocated to trading standards this year, and the further £30 million in subsequent years to enforcement agencies, will simply not touch the sides.

Reading the 33-page Library briefing, I was amazed that there were only two lines referring to the possibility of a black market in cigarettes and missed tax revenue. That is utter naivety. Evidence—indeed, fact—from Australia’s experience of prohibition highlights significant unintended consequences, including a thriving illicit tobacco market, organised crime and increased enforcement challenges. There are important lessons we must learn from Australia’s failed tobacco policy. Written evidence from an Australian Border Force detective superintendent, Rohan Pike, who set up Australia’s Tobacco Strike Team, states that, in order to justify their smoking prohibition policy,

“relevant Federal agencies such as the Australian Border Force, the Taxation Office and the Health Department have deliberately under-estimated the size and danger of the illicit tobacco market”.

We have heard a bit of that today. This has come back to bite the Australians as the reality of the situation has become more apparent, causing their Government much embarrassment, while the various agencies are struggling to mount a meaningful response.

Three things undermined the Australian Government’s previous stance on this illicit market. The first was unwittingly undertaken by the Government’s own agency, the Australian Criminal Intelligence Commission. Nine years ago, it began sampling wastewater at numerous locations around the country. That analysis, while directed primarily at uncovering illicit drug consumption, also tracked the consumption of nicotine. The results showed that nicotine consumption had remained level throughout, thereby nullifying the Government’s claims that their tobacco policies were reducing consumption.

The second factor that showed government rhetoric to lack credibility has been the outbreak of widespread violence—as we heard from my noble friend Lord Sharpe —between criminal gangs as they fight tobacco turf wars. In the state of Victoria alone—a state that, I might add, enthusiastically adopted the Government’s policies more than any other state—has suffered 130 fire- bombings of tobacco outlets. These problems have directly affected both the state and federal Governments’ credibility regarding law and order in the community.

The third consequence of Australia’s unbalanced tobacco policy has been the effect that the exponential tobacco excise duty rises have had on government revenue. Whereas in 2021 the Australian Government received $16 billion in tobacco tax receipts per year—and they had forecast similar future returns—the last three years have seen a year-on-year reduction to an expected $9 billion this year. This revenue decline would be understandable, even desirable, if it came with a corresponding drop-off in tobacco consumption, but it has not. Consumers are merely accessing the illicit market in ever expanding numbers. The excise rate is now so extreme, it is the primary driver of the criminal market and all the violence it brings. The Australian excise rate is the highest in the world—Britain’s is the second highest.

Just imagine the good if even half of that $7 billion in lost revenue, had it been earned, had been spent on targeted education campaigns, youth access prevention, smoking support services and campaigns to educate smokers on less harmful alternative nicotine products. These are wholly worthy aims that many people supporting the Bill have been advocating, but we need the income to action them. HMRC is just one of the bodies that point out the risk the illegal trade poses in giving children access to tobacco, noting in a recent policy paper that criminals

“sell tobacco products to children who would otherwise be unable to legally purchase tobacco products and become smokers”.

Throughout history, prohibition has never extinguished consumer demand. In fact, too often it has the opposite effect: it creates new demand.