12: After Clause 6, insert the following new Clause—
“Transparency of tobacco sales data(1) The Secretary of State must by regulations make provision requiring every manufacturer and importer of tobacco products to publish, on a quarterly basis, data relating to the sale of tobacco products in England and Wales.(2) Regulations under subsection (1) must in particular include provision requiring publication of—(a) the volume of sales of tobacco products, broken down by product type, brand and geographical region, and(b) such other information as the Secretary of State considers appropriate for the purposes of assessing tobacco consumption and its effects on public health.(3) Data published under regulations under this section must be made publicly available in a format accessible to public health authorities, local authorities, and other relevant bodies.(4) Regulations under this section are subject to the negative resolution procedure.”Member's explanatory statement
This amendment would require the Secretary of State to make regulations obliging tobacco companies to publish sales data, to improve transparency and support public health policy.
My Lords, Amendment 12, in my name and that of my noble friend Lady Walmsley, and Amendment 148, in my name, would require the Secretary of State to make regulations obliging tobacco manufacturers and importers to provide sales data by geographical area. Before the Minister says that there is already such a power, let me refer to Amendment 148, which seeks to change “may” to “must” for the requirement to make regulations and to publish data.
Tobacco companies collect rich data tracking the sales of their products which currently exist only to serve commercial purposes. Modelling from Cancer Research UK shows that those living in the most affluent areas of the UK should be smoke free this year, whereas those in the least affluent will not achieve that until after 2050—25 years later. That inequality has devastating consequences. Hence, there are nearly twice as many cancer cases caused by smoking in the poorest areas in England compared to the wealthiest.
Data collected by companies on sales and distributions could be used to inform public health. They could also give insights into different pricing strategies that companies use and would therefore complement a “polluter pays” levy, which I know many people rightly support. The data would also have value in setting up a new licensing system, helping local government understand the pattern of sales in its communities and make judgments about whether availability was appropriate. Trading standards would also benefit, using insights to support enforcement activity and improve the intelligence that local authorities have to assess local problems with any illicit sales and to identify upticks in illicit tobacco use.
Action on Smoking and Health, in its written evidence on the Bill, also flagged the issue of cigarillos, saying that surveys have
“recently identified that cigarillos are increasing in use among young people. With timely access to industry sales data public health agencies and researchers could have identified this trend far more quickly. These products have fewer restrictions on them than other tobacco products, something that will be addressed via the Tobacco and Vapes Bill, but lack of knowledge has inhibited swift public health response”.
My Lords, I agree with Amendment 12 moved by the noble Baroness, Lady Northover, but I want to speak to Amendment 192, which proposes the introduction of a levy on tobacco manufacturers.
When products cause harm, the polluter should pay. That principle was introduced by previous Conservative Governments; the landfill levy was introduced in 1996 and the soft drinks levy in 2018. After the Grenfell tragedy, we introduced the Building Safety Act to make the construction industry pay for the remediation of high-rise blocks. We should apply the same principle to tobacco.
In a report commissioned by the last Government, Javed Khan looked at three options to raise funds to implement his conclusions. He wrote:
“Introduce a ‘polluter pays’ industry levy on profits from cigarette sales, which can directly fund the full range of comprehensive measures to help us reach smokefree 2030 and make smoking obsolete. This is my preferred option … A tobacco ‘polluter pays’ levy could be introduced in the form of a charge applied as a percentage of these profits”.
It would not impact on the CPI or the cost to the consumer, and it would raise hundreds of millions of pounds.
We debated exactly that proposition on 16 March 2022, Amendment 158 to the Health and Care Bill, proposed by the noble Lord, Lord Crisp, whom I am delighted to see in his place. He said about that amendment:
“This new Clause … 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”.—[Official Report, 16/3/22; cols. 287-88.]
My Lords, my Amendment 194, on a tobacco industry levy and new industry obligations, offers a vital and practical mechanism to make the Bill stronger, fairer and more effective in public health and social justice terms. I am sure there is not a Member present whose family has not been impacted by nicotine addiction, and my family is no exception. The Bill presents an important opportunity to redress the balance between corporate profits gained from selling products that by their very nature kill two-thirds of their users and the burdens placed on wider society that are felt by our health and care systems. Other amendments in this group are based on similar ways of addressing these wider problems and I welcome them. These are problems that, if not addressed, will persist long after the Bill is passed.
My amendment would quite simply make those who profit from harm contribute directly towards repairing it. The tobacco industry continues to generate vast profits from the products it sells and it has huge economic and human suffering costs. I acknowledge that accurate statistical data in these areas is complex, but it has been estimated that the four largest tobacco manufacturers made approximately £900 million in profits annually in the UK, according to one 2023 estimate. I well recognise that tobacco duties are a significant source of government revenue, raising an estimated £8.1 billion in 2025-26, which represents 0.7% of all government receipts and is equivalent to 0.3% of national income. However, this revenue goes towards general taxation.
The health impacts of smoking and nicotine are estimated to cost the UK economy billions of pounds annually, with estimates for England alone reaching up to £43.7 billion if the total societal costs are included and some £2.5 billion in direct service costs for the NHS. These figures are significant and productivity loss and health impacts have big societal impacts. My amendment would require the Secretary of State to introduce by regulation a levy on companies’ profits derived from income from the manufacture or sale of tobacco products in the United Kingdom. The levy would apply annually and would be based on profits attributable to tobacco sales here. The funds raised would be paid to a dedicated ring-fenced account held by the Department of Health and Social Care. As has already been mentioned by the noble Lord, every penny collected would be used solely for the purposes of either smoking cessation services, public health campaigns focused on reducing tobacco harm or healthcare services to treat people living with smoking-related diseases.
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We believe that we need to align profit with responsibility. The trouble is that these two matters are still treated as entirely separate—and will be even after this Bill is passed. Even if a small fraction of those company profits were reinvested, it would make a tremendous difference. I know that government has previously looked at a levy; information from that has shown that such measures could be reliable, predictable and fair.
My amendment would give parliamentary oversight; it would be passed by a statutory instrument under the affirmative resolution. I want to make a point about hypothecation, which is important. My amendment would earmark these funds specifically for cessation and health services, which would restore trust and instil confidence. The BMJ, for example, has indicated that every £1 invested in “stop smoking” services saves £2.27 in healthcare and productivity costs.
This Bill seeks a smoke-free future. We very much support that aspiration, but my amendment would give the Government an opportunity to go further by funding the means to achieve the goals of fairness and foresight. The amendment is about accountability, sustainability and justice. I recognise that these matters are complex; I am sure that the tablers of the other amendments in this group will, like me, be more than happy to talk with the Minister and have further discussions on these matters prior to Report.
I turn briefly to the other amendments in this group. Amendment 12 in the names of my noble friends Lady Northover and Lady Walmsley would require the Secretary of State to make regulations obliging tobacco companies to publish sales data. This really must change. I do not understand why the Bill was drafted in that way. The very foundation of health policy is based on reliable and open data.
Amendment 148, also in the name of my noble friend Lady Northover, would make a minor but significant change; that must be introduced.
I turn finally to Amendment 192, which was introduced so ably by the noble Lord, Lord Young of Cookham, and is supported by my noble friend Lord Rennard. We are all very much on the same page. We have slightly different ways of doing it, but I look forward to working with the noble Lord—and, I hope, the Minister —on taking these matters forward prior to Report.
My Lords, as this is the first time I have spoken in Committee on this Bill, I want to reflect for a moment on the extraordinary lengths to which tobacco companies will go to sell their products, including getting children addicted to nicotine. When I look at this Bill and the amendments to it, I see the extraordinary lengths to which government must then go in order to combat that.
Turning to the amendments in this group, we have heard three excellent speeches. I do not want to repeat any of the points made but wish to pick up one made by the noble Baroness, Lady Walmsley. It concerns the importance of the government side of this combat, if you like, between the tobacco companies and government. Put simply, the Government should have the data that is available so that they can hone their arguments in the continuing wrestle that we are seeing around this set of topics.
I very much support that amendment. I also support the amendments in the names of the noble Lord, Lord Young of Cookham, and the noble Earl, Lord Russell, on the “polluter pays” principle. Again, this seems practical to me; we heard the Minister refer to it as such at an earlier period, I believe. However, there are three terribly simple arguments, although I do not want to add to the detail. First, there is the principle that the polluter should pay for the damage. That is a very simple statement; it has, as the noble Lord, Lord Young of Cookham, said, been used in other circumstances. There is very considerable damage, and it is very easily measured.
The second argument is to reduce the incentives for tobacco companies. As I have commented before, if only we could get the tobacco companies to use all their guile and manoeuvring to improve health rather than damage it. Perhaps there are things that government can learn from the way in which tobacco companies seek to influence the public.
The third argument is, of course, to support public health. Another good reason for this is to provide that money to support public health and at the same time the public purse. Finally, I note that tobacco companies probably come under the category of those with broad shoulders, so I ask the Minister whether we might expect to hear a line or two about this in the forthcoming Budget.
My Lords, I stand with some trepidation on this one, but I will give it a go. I have some reservations about this series of amendments. On Amendment 12, I have a lot of sympathy with having more transparency as a general principle, but I ask the noble Baronesses, Lady Northover and Lady Walmsley, how we would deal with having a dangerous precedent on the commercial confidentiality and sensitivities, for any company, and what can and cannot be revealed. Asking for information is one thing; mandating it is a whole different ball game. Many companies hold data close to themselves, as they are allowed to, because they are private entities. It is a legal thing to do and there are reasons, beyond malevolent ones, why that might occur.
I am particularly concerned about Amendments 192 and 194. As the noble Earl, Lord Russell, noted, tobacco companies already pay, or are responsible for, substantial duties that are collected. I am not sure that I entirely agree with the “polluter pays” principle—or, at least, it is quite complicated. It sounds virtuous, and in some instances I might well support it, but when I was reading these amendments I kept thinking, perhaps because of my left-wing, Marxist background, “Oh my God, this is a new form of legal wealth distribution by force”. It felt to me as though we were saying: “Forget economic growth. We’re just going take more from legal companies, but it’s all right because they are evil companies”.
In the words that the noble Earl, Lord Russell, used about his more specific amendments on what the money should be used for, if I may put it that way, I recognised an argument that I came across from Cancer Research. It has been very helpful in its briefings on the Bill and, in many instances, I agree with what it is putting forward. But in this instance, it said:
“At a time when funding for public health initiatives is limited, this proposal raises money without directly costing the taxpayer. Given the current economic challenges, this presents an opportunity for the Government to act decisively, should it choose to seize it”.
My Lords, it is a great pleasure to follow the noble Baroness, Lady Fox. Normal service is probably about to be resumed. I am on a different page from her on this issue.
These amendments give me the opportunity to clarify my position on the Bill. I fear that my previous opposition to the age-escalator provision in the Bill, meaning that some adults will never be able to purchase tobacco legally, has been misrepresented by some as a general objection to any form of regulation or restriction on tobacco. I state clearly that that is not the case. That is why I support all amendments in this group—Amendments 12 and 148, tabled by my noble friend Lady Northover, Amendment 192, tabled by the noble Lord, Lord Young, and Amendment 194 in the name of my noble friend Lord Russell.
I come back to something the noble Baroness, Lady Fox, said regarding the point made by my noble friend Lady Northover about data. If this was unique, some of those issues would need to be explored further, but this is not a first. For example, the water and energy companies have to give to the regulator investment details, asset details, investment plans and details of their costs and profits. This happens without commercial sensitivities going by the way. The amendments, particularly Amendments 192 and 194, generally represent a necessary and proportionate intervention to correct a profound fiscal and health imbalance, which is weighted too heavily in favour of the tobacco industry. The tobacco industry in the UK operates with a near monopoly, as many noble Lords have said, on selling an addictive product. The market structure allows them to generate excessive profits. They extract nearly £900 million per year in profit, while contributing little in terms of corporate tax to the Exchequer.
Simultaneously, the societal costs of smoking are vast, as the noble Lord, Lord Young, and my noble friend Lord Russell identified, with the NHS bearing the immediate cost of approximately £1.8 billion per year. The current system places the entire tax burden on the consumer and the taxpayer, while the manufacturer enjoys excessive returns. That is not only a moral wrong but an economic failure that government has a duty to correct.
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Industry data have been shrouded in secrecy—what a surprise. Thank goodness that Professor Sir Richard Doll had the cancer registries to demonstrate the causal link between smoking and cancer. Since public health academics started analysing industry profits, they publish only very limited data. Mandated publication of sales data would ensure that this industry, which sells a product that kills two-thirds of long-term users, is appropriately regulated and monitored given the harms it causes. I look forward to the Minister’s response and I beg to move.
That is precisely what Amendment 192 proposes.
Responding to the amendment, the Minister, speaking then from the Opposition Front Bench on behalf of her party, said:
“This strikes me as wholly pragmatic; a wide-ranging consultation would undoubtedly help to strike the right balance between all the parties involved … The scheme proposed in this group of amendments would provide a well-funded and much-needed boost, and a consultation would allow this proposal to be tested, refined and shaped. I hope that the Minister will accept the opportunity of a consultation but if the will of the House is tested, these Benches will support the amendments”.—[Official Report, 16/3/22; col. 297.]
She was as good as her word: she supported the amendment, along with the Leader of her party and the Chief Whip, and the amendment was carried, later to be overturned in another place. I was therefore surprised that the noble Baroness did not add her name to this amendment when I tabled it, and I look forward to her compelling speech in its favour.
Amendment 192 would require the Government to consult on the introduction of a “polluter pays” levy. Tobacco is a uniquely addictive and lethal consumer product, and this creates a perfect storm for consumers. The tobacco industry in this country continues to be in good health, unlike its customers, and companies continue to make significant profits: an estimated £900 million per year in the UK alone, with average profit margins of around 50% compared to 10% for manufacturing margins.
There are various estimated costs to society of smoking. That from ASH is £43.7 billion a year—perhaps the Government could share their own estimate—and it is the taxpayer who picks up the tab: costs to the NHS, costs to social care, lost productivity to our economy, and higher welfare bills. A “polluter pays” levy ensures that those who can and should pay, do, and implementing it would raise up to £700 million a year.
So how would it work? The Treasury consulted on a levy in 2014 and did not proceed, but what is proposed now is quite different and, crucially, it would not allow the industry to pass costs on to the consumer and would have no impact on the RPI.
The levy model proposed by the APPG on Smoking and Health would introduce a price cap on tobacco similar to what we do with utilities. That would limit the prices to manufacturing costs plus, say, a 10% profit margin. This would be in line with other consumer products and more than generous for an industry responsible for such high levels of harm. The Government would then introduce a new levy on the industry, to be paid for from its profits.
A consultation would allow this model to be “tested and shaped”, providing a much-needed boost to public finances. The public too share our support for this proposal, with 76% of adults in England in favour of a “polluter pays” levy.
I note that the amendment from the noble Earl, Lord Russell, on this same subject proposes to put the proceeds into
“a dedicated fund held by the Department of Health and Social Care”.
I have not included such hypothecation in my own amendment, but I fully support what he seeks to do. Some £700 million a year could be used to support 2 million more smokers to quit just in this Parliament and accelerate progress towards a smoke-free future. It is likely that funds would be left over, which could be used for other public health activities, helping the Government achieve their mission of reducing the gap in life expectancy between the richest and the poorest.
This is a measured, fair and practical proposal. It would protect the consumer, prevent industry manipulation, provide much-needed funding for the Treasury, and ensure that those who profit from an addictive and lethal product made a proper contribution to repairing the damage it causes. I look forward to the Minister’s reply.
It is worth stressing what this amendment would not do. It would not set the rate or the structure of the levy. I have left these details entirely for the Government to determine. The measure is not prescriptive; it would simply establish the legislative framework and would allow Ministers to design and introduce a fair and proportionate levy. It would give the Government flexibility to decide, for example, whether the levy should be assessed by company profits, by market share or by a combination of the two approaches. It would equally be left to the Treasury to investigate and decide, with Ministers, the best way to implement it. The principle of the amendment is the important point, and it is clear. The principle is that the tobacco companies, and not the general taxpayer, should contribute directly the greatest proportion of the cost of the harm that their products cause. It would align, as has been said on other amendments today, with the “polluter pays” model, which is endorsed by health experts across the field. The estimate is that £700 million could be generated annually to help transform smoking cessation services and public awareness campaigns, services that have been hit by cuts.
Although the level of smoking is reducing, some 13% of the UK population still smokes. This has significant impacts. For example, Imperial tobacco holds 40% of the UK market; that market is worth £30 billion annually. Meanwhile, on the other side, the NHS and the Treasury have to deal with the societal consequences of what tobacco does.
I kept thinking of this as a way of avoiding crises in public health, or in the NHS, by simply not resolving what should be an adequate health service for everyone while turning to private companies instead and trying to compensate for that. That is a dangerous precedent. Private companies should not let the state off the hook for what it should be doing, because those public health services should be provided by the state, regardless.
The fact that there is an economic crisis at the moment cannot just be meted out to companies that we do not like. I realise that tobacco companies have for some time been treated as especially evil, malevolent and harmful, but if you enter other debates and read the briefings of lobbying groups on other issues, you will hear similar moralistic arguments used about sugary foods, junk food, alcohol, gambling and even fossil fuels. I read a fascinating paper the other day which basically said that fossil fuels were killing us all and should be closed down, and so on. That is the kind of language being used.
I therefore worry about setting a precedent for a moralised hierarchy of legislators deciding which are the evil companies, and who gets to decide that, with a punishment then meted out. I say this because, briefly, I was a bit disturbed the other day at some mention of a report by KPMG. The data in it was dismissed as being from a report produced for Philip Morris, the tobacco company, as if that somehow closed down any possibility of a discussion—that having said that, the report could be laughed off. The idea that all you have to do is say the name of a tobacco company, and then close down valuable information, is quite dangerous.
It thought that was particularly unfair on KPMG. I am not necessarily a great fan of the big four accountancy firms, but they certainly have reputations. To write them off as being in bed with the evil Philip Morris, so that we take no notice of what they do, seemed a little unfair. If that were the case, have the Government let KPMG know that this is their view of it—especially since KPMG is a supplier to the Government, as I understand it, focusing on Civil Service training and economic matters? KPMG might have a case to answer on those things, but it should not be written off as a company because it has done some work for Philip Morris.
Neither is it appropriate for our discussions to always assume that everything a tobacco company says or does is evil because of the nature of the product. The product is harmful and contributes to cancer in many people—I know that—but if this Government believe that the tobacco companies are so uniquely evil that they are killing the population, they should have the courage of their conviction, make them illegal and ban them, not take their taxes and have it all ways.