Health and Care Bill

Lord Rennard Excerpts

Lords Hansard _ Part 1 & Report stage
Wednesday 16th March 2022 Lords Chamber

[Lord Young of Cookham (Con)]

My Lords, it is a pleasure to follow the noble Lords Lord Crisp and Lord Faulkner in support of these amendments, which replicate the amendment I moved in Committee. They set out proposals for a statutory smoke-free 2030 fund, based on the polluter pays principles, to pay for measures to end smoking. We are grateful to both Ministers for the time that they spent with us on a Zoom call last week, when we sought to persuade them of the merits of these amendments, and time alone will tell whether those representations bore fruit.

In Committee, my noble friend Lord Naseby, whom I see in his place, suggested that these proposals had been consulted on in 2015, and that the Government had concluded they were not workable, a conclusion which he said had been reiterated by the Exchequer Secretary on 10 January 2022. While my noble friend was right to say that the Government consulted on the levy in 2015, they did not consult on the proposals before us today. What was consulted on then was an additional tax, and the decision was taken not to proceed because tobacco manufacturers and importers would pass the costs of a levy on to consumers; the Statement by the Treasury in January merely reiterated that conclusion. Back in 2015, the regulation of tobacco prices to prevent the costs of a levy being passed on to consumers was prohibited by the rules of the European Union. That is no longer the case, so the 2015 objection to the levy no longer holds true. The Government can now put the financial burden firmly where it belongs, on the polluter—the tobacco manufacturer— and not the polluted—the smoker.

Our scheme enables the Government to limit the ability of manufacturers to profit from smokers, while protecting government excise tax revenues, which is a win-win for the Government and for smokers. The scheme is modelled on the Pharmaceutical Price Regulation Scheme, the PPRS, which has been in operation for over 40 years and is overseen by the Department of Health and Social Care. It has teams of analysts who already have the skills to administer a scheme for cigarettes, a much simpler product to administer than pharmaceutical medicines.

Unlike corporate taxes, which are based on reported profits and can be—and indeed are—evaded, the levy would be based on sales volumes, as is the case in America, where a similar scheme already operates. Sales volumes are much easier for the Government to monitor and much harder for companies to misrepresent. Implementing a levy would not require a new quango to be set up, as the Department of Health and Social Care has all the expertise needed both to supervise the scheme and to allocate the funds raised. We would not be averse to the consultation mentioned in the amendment including other options, as long as it included careful consideration of our proposals.

The Government have said that they accept the polluter pays principle. My party has form in implementing that proposal through the landfill levy, the tax on sugar in soft drinks and requiring developers to pay for the costs of remediating building safety defects. Indeed, as we heard from the noble Lord, Lord Crisp, the Government promised to consider this approach to funding tobacco control nearly three years ago in the prevention Green Paper. Surely they should now welcome this opportunity to consider how it can be put into practice.

[Lord Rennard (LD)]

My Lords, I speak in support of these amendments, to which I have added my name, and which are in accordance with my party’s policy.

In Committee, there was almost universal support for dealing with health inequality issues, and there was widespread recognition that, as the noble Lord, Lord Crisp, said, half the difference in life expectancy between the richest and the poorest people in this country is caused by smoking. There are many ways in which we can further reduce the prevalence of smoking, and those of us who are members of the APPG on Smoking and Health set them out during the course of our debates.

However, we are concentrating today on just one key principle which is necessary if the Government’s target of reducing the prevalence of smoking to 5% or below is to be achieved by 2030. That principle is finding the funds to support smoking cessation and tobacco control measures through a levy on the tobacco companies. This would help to ameliorate the terrible damage done by their products, which includes shortening the lives of half the people who use them.

The funding for local authorities to pursue tobacco control policies such as smoking cessation services and enforcement and for national mass media campaigns has been cut significantly. Without the proposed levy, the NHS will face greater costs in future in dealing with the many issues, such as lung cancer and heart disease, which arise in part because of smoking tobacco.

Last month, together with other officers of the APPG on Smoking and Health, I had the pleasure of meeting Javed Khan, chair of the Government’s independent review into smoking. He listened carefully to all our proposals, particularly on the levy, and certainly understood the necessity of funding being found. The Government have asked him to say what the most impactful interventions that could be taken forward in the new tobacco control plan would be. He told us that if nothing different is done, the Government’s smoke-free target will not be met. He promised that his recommendations would be “bold and brave”, as I hope they will.

I expect that we will soon get some soothing words from the Minister. But before he replies to this debate, I ask him to consider how, in “Hamlet”, King Claudius has to admit that

“words without thoughts never to heaven go”.

I hope the Minister will give us not just warm words about tobacco control but confirm that the Government have thought about the tobacco levy and will undertake a formal consultation on it.

[Lord Naseby (Con)]

My Lords, I hasten to say to your Lordships that I do not smoke and have never smoked. In considering the amendments before us this afternoon, it is worth giving some of the official statistics rather than the aspirational ones. Smoking rates in England continue to decline year on year and that has been a trend for the last 30 years. According to the Office for National Statistics in 2021, smoking rates in England have declined significantly, from 20% in 2011 to 12% in 2020. The decline in the number of smokers has resulted in a reduction in the cost to the NHS of treating the impact of smoking. In 2015, Public Health England estimated that the total smoking-related cost to NHS England was £2.6 billion a year, when 18% of the population smoked. This figure and the corresponding cost to NHS England over the last five years have declined further, given the 12% smoking rate in England in 2020. According to NHS data published in 2019 on smoking, drinking and drug use among young people, the number of young people aged 11 to 15 smoking has declined dramatically, from 16% to just 5% in 2018. According to the Office for National Statistics in 2021, only 12% of 18 to 24 year-olds in Great Britain smoke, a major reduction from 26% in 2011 and the lowest smoking rate across all age groups except the over-65s.

By way of background, according to the most recent HMRC tax gap data, illegal smuggling and consumption of illicit tobacco cost Her Majesty’s Government £2.3 billion in lost revenue in 2019-20, a figure that remains unchanged from the fiscal year 2016-17, which reinforces the fact that the Government’s anti-illicit tobacco strategy is not working. It ought to be working, when you have a situation where a group of companies is working with the Department for Health and has done over many years. Frankly, it is a sad reflection on the status of HMRC that this illicit tobacco importation is increasing. You have only to look at what is happening in Dover or any of our other ports today to see why it is increasing. It is a pathetic and embarrassing performance at Dover at the moment, the net result being not just tobacco but illegal alcohol and so on coming in.

Now we look at the idea of a levy, something that has never been in the manifesto of a Conservative Government to the best of my knowledge. A levy on any company prescribed by government, even companies trading locally, certainly does not fit into the basic elements of our financial and economic strategy. If it was just a levy on cigarettes, there might be half a case, but this is on anything to do with tobacco. Most of all those other products have no effect on people’s health—they are a matter of enjoyment—but this idea goes across the whole lot. It has not been thought through.

It is all very well my noble friend Lord Young on the Back Benches saying that there was a consultation in 2015 on a levy on tobacco manufacturers’ profits and the Government concluded that it would be unworkable, but that was because we were in the EU so it has all changed now. I say to my noble friend on the Front Bench: I would have thought he had enough on his hands without introducing a complicated levy, but that is my personal view. There was an exchange between the Exchequer Secretary and the then shadow Exchequer Secretary, confirming

“that our position regarding the 2015 consultation stands. A levy would be a complex”—

this is not going to change—

“and costly way of raising money to fund tobacco control measures and would be unlikely to provide a stable revenue stream.”

I say to my noble friends on all sides of the House that tobacco manufacturers already invest hundreds of millions of pounds every year in R&D and highly skilled jobs to bring to market alternative smoke-free nicotine products. Some of your Lordships may use e-cigarettes, nicotine pouches or heated tobacco products. Further tax increases on manufacturers as a whole will have the effect of reducing that investment, which is not a very clever way forward.

--- Later in debate ---

[Baroness Fox of Buckley (Non-Afl)]

Well, good. I have got a few “hear, hears”.

[Lord Rennard (LD)]

Does the noble Baroness accept that a crucial difference is that organisations such as ASH are funded by organisations concerned with public health, including Cancer Research UK and people who deal with trying to save lives, while FOREST is funded by the tobacco industry, which kills half its customers?

[Baroness Fox of Buckley (Non-Afl)]

I was coming on to that point. I would really appreciate a dose of honesty in this House. If those people who are so hostile to smoking a legal product believe that it is the killer they allege, they should call for smoking to be made illegal and be done with it. At the moment, tobacco companies are legal companies. People talk about them with such distaste, as though they should be abolished. It would be better and more heartfelt if they argued that tobacco should be illegal; then we would have a different debate. Public health is not always neutral when you talk about public health lobbyists, in my opinion. The freedom to choose to do something that is bad for your health is still allowed in a free society, despite some people wishing it was not.