Health and Care Bill

Report (4th Day)

Amendment 158

158: After Clause 164, insert the following new Clause— “Tobacco products statutory scheme: consultation (1) The Secretary of State must, no later than six months after this Act is passed, consult and report on the desirability of making a scheme (referred to in this section and section (Tobacco products statutory scheme: supplementary) as a statutory scheme) for one or more of the following purposes—(a) regulating, for the purposes of improving public health, the prices which may be charged by any manufacturer or importer of tobacco products for the supply of any tobacco products;(b) limiting the profits which may accrue to any manufacturer or importer in connection with the manufacture or supply of tobacco products;(c) providing for any manufacturer or importer of tobacco products to pay to the Secretary of State an amount calculated by reference to sales or estimated sales of those products (whether on the basis of net prices, average selling prices or otherwise) to be used for the purposes of reducing smoking prevalence and improving public health.(2) The consultation must ask for views on a draft statutory scheme (or alternative draft schemes), which may, in particular, make any provision mentioned in subsections (3) to (6).(3) The draft scheme or schemes may provide for any amount representing sums charged by any manufacturer or importer to whom the scheme applies, in excess of the limits determined under the scheme, for tobacco products covered by the scheme to be paid by that person to the Secretary of State within a specified period.(4) The draft scheme or schemes may provide for any amount representing the profits, in excess of the limits determined under the scheme, accruing to any manufacturer or importer to whom the scheme applies in connection with the manufacture or importation of tobacco products covered by the scheme to be paid by that person to the Secretary of State within a specified period.(5) The draft scheme or schemes may provide for any amount payable in accordance with the scheme by any manufacturer or importer to whom the scheme applies to be paid to the Secretary of State within a specified period.(6) The draft scheme or schemes may—(a) prohibit any manufacturer or importer to whom the scheme applies from varying, without the approval of the Secretary of State, any price charged by the manufacturer or importer for the supply of any tobacco product covered by the scheme, and(b) provide for any amount representing any variation in contravention of that prohibition in the sums charged by that person for that product to be paid to the Secretary of State within a specified period.(7) The Secretary of State must lay the report before Parliament and a Minister of the Crown must arrange to make a statement to each House of Parliament setting out in detail any steps which will be taken to implement the findings of the report.”Member’s explanatory statement This new Clause, along with others, would require the Secretary of State for Health and Social Care to carry out a consultation about a statutory scheme for the regulation of prices and profits of tobacco manufacturers and importers. Funds raised by the scheme would be used to pay for the cost of tobacco control measures to deliver the Government’s ultimatum for industry to make smoked tobacco obsolete by 2030 and for England to be smoke-free with smoking rates 5% or below.

My Lords, I rise to move Amendment 158 and note that the other three amendments in this group are consequential on this one.

These amendments would require the Government to consult on a statutory polluter pays scheme imposed on tobacco manufacturers to fund measures to reduce smoking prevalence and improve public health. In 2019, when the Government announced their smoke-free 2030 ambition, they promised to consider just this sort of polluter pays approach to raising funds for tobacco control. The amendments require the Government to fulfil this commitment by consulting on a statutory scheme and reporting back to Parliament within six months of the Bill’s passage. The scheme consists of two distinct parts: a levy raised from tobacco sales volumes, which would raise an estimated £700 million a year, and a price cap on tobacco products to prevent tobacco companies simply passing these costs on to smokers.

The amendments propose that funding from this scheme be used to pay for the tobacco control measures needed to achieve the smoke-free 2030 ambition. This includes greater investment in stopping smoking services, mass media public education campaigns, targeted support for disadvantaged groups, tackling the sale of elicit tobacco and preventing young people taking up smoking. There are three sets of arguments in this regard, which are all compelling. The first is the impact of tobacco on public health. The second, bluntly, is that this is in line with government policy. The third is the need for a pragmatic approach to where we are today and how we can achieve funding.

Let me just make a few points about the first of those, the impact of tobacco. First, smoking is, of course, the largest single risk factor in ill health and early mortality. Secondly, it is not a lifestyle choice; it may have been originally—as an ex-smoker, I know that—but it is also addictive, and addiction normally starts in childhood. That is why it is really important that we target younger people. Two-thirds of younger people who start smoking carry on into adult life. The current rate of decline is insufficient; smoking prevalence is coming down around the country but, currently, it would take until at least 2047 for the most disadvantaged communities to achieve the level required. Indeed, inequality is a big issue here. Given that so many noble Lords have spoken about inequalities in relation to other amendments to the Health and Care Bill, I just draw out that smoking is responsible for half of the 10-year difference in life expectancy between the richest and poorest parts of society. Whether one smokes or not has a far greater impact on life expectancy than a person’s social position in society.

My Lords, I support Amendment 158 and the others in this group, to which I have added my name. Last Wednesday was national No Smoking Day, and there was an excellent event in a Commons dining room hosted by the All-Party Parliamentary Group on Smoking and Health—I declare an interest as an officer of that group—to celebrate the 50th anniversary of ASH. The star speaker was the Public Health Minister, Maggie Throup. She reaffirmed the Government’s commitment to achieving a smoke-free England by 2030 and rightly said that stop-smoking services would be at the centre of the forthcoming tobacco control plan.

NICE has estimated that, for every £1 invested in stop-smoking services, £2.37 will be saved on treating smoking-related diseases and reduced productivity. However, cuts to local public health budgets have disproportionately hit stop-smoking services. They have lost a third of their funding in real terms since 2015, accompanied by a decline in the number of smokers setting quit dates.

If the Government truly want stop smoking services to be at the centre of the tobacco control plan, these funding cuts must be reversed. The spending review did not reverse the cuts and the levelling up White Paper has also not provided the additional funding. But these amendments, based on a polluter pays levy, could do the job the Government say they want to achieve. The polluter pays levy could also pay for other vital measures, because smoking is an addiction and to overcome that addiction, smokers need to be motivated to quit.

In the States, a mass media campaign called Tips from Former Smokers is funded by a levy on manufacturers. Over a six-year period, the campaign increased the number of successful quitters by 1 million; it was equally effective with ethnic minorities and smokers with poor mental health, and had healthcare cost savings of $11,400 per lifetime. All those people quit as a result of that campaign. In England, funding for mass media campaigns, which was at US levels in 2009, fell by 90% to only £2 million in 2019. This was matched by a 25% decline in the proportion of adult smokers in England who tried to quit in the previous year. If smokers do not try to quit, they cannot succeed.

I commend to the House the words of the chair of the Government’s independent review of smoking, Javed Khan. Speaking to the Times last week, he said:

“Just look at the Covid experience, mass marketing has a big effect, it really works. The Government went hell for leather, it made an enormous difference in vaccination rates. So why not do something like that again, if we really want to save people’s lives.”

We agree, but the funding must be found, and the best and most realistic option is for the polluter—that is, the tobacco companies—to be made to pay. I support these amendments.

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.

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.

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.

The introduction of a levy additionally would represent only a further punitive tax on a legitimate legal product and would unfairly have a direct impact on consumers who have made an informed choice to smoke and are fully aware of the risks associated with smoking. The Government already have two tools to raise money from tobacco: excise and MET—minimum excise tax—which could be used much more efficiently.