I beg to move,
That leave be given to bring in a Bill to require tobacco companies to publish sales and marketing data; and for connected purposes.
The UK has made remarkable progress over the past two decades in reducing smoking levels. In 2000, more than one in four adults in England smoked. By last year, that had declined to fewer than one in six. Since the last tobacco control plan was published in 2011, smoking rates in England have fallen by a quarter, from just below 20% to just below 15% in 2017, bringing the estimated number of smokers down to 6.1 million. At the same time, smoking rates among children have fallen rapidly. After two decades of little change, between 2000 and 2016 the proportion of 15-year-olds who were regular smokers fell from 23% to 7%—a decline of more than two thirds.
Those reductions, which have meant large consequential improvements in public health, have happened because of strict tobacco legislation, progressive tax rises, public education and the provision of support services for those who wish to quit. We have had a succession of measures including the launch of “stop smoking” services; health warnings on tobacco products; a ban on tobacco advertising, promotion and sponsorship; a ban on smoking in enclosed public places; raising the minimum age of purchase to 18; pictorial health warnings on packs; the prohibition of cigarette vending machines; prohibiting displays of tobacco in shops; and prohibiting smoking in private cars carrying under 18s. We introduced larger graphic health warnings on packs and then became one of the first international adopters of plain standardised packaging for cigarettes. We have since had the ban on cross-border advertising of e-cigarettes.
However, smoking still accounts for approximately 79,000 deaths a year in England alone, and therefore remains the top priority for public health policy. It is the leading cause of preventable premature death and is responsible for half the difference in life expectancy between the richest and poorest in our communities. Smoking causes lung cancer, respiratory disease and heart disease, as well as numerous cancers in other organs, including the lip, mouth, throat, bladder, kidney, stomach, liver and cervix.
Although youth smoking rates have fallen to their lowest since surveys began in 1982, between 2014 and 2016 more than 127,000 children a year aged 11 to 15 started to smoke in the UK, according to Cancer Research UK. That amounts to about 350 young people a day, which is equivalent to 22 minibus loads of secondary school children. Once someone has started, it is difficult to stop, with two thirds of those who try smoking going on to become regular smokers.
The World Health Organisation framework convention on tobacco control, to which the UK is a party, obliges Governments to implement stringent control of the tobacco industry for the protection of public health to a greater extent than for any other legal consumer product. That includes the monitoring and surveillance of industry behaviour and ensuring that public policy is protected from the commercial and vested interests of the tobacco industry. Article 20 of the framework convention sets out requirements for parties to carry out monitoring and surveillance of the industry, and provides for the collection and dissemination of such data.
It should be remembered that two of the four major transnational tobacco manufacturers, British American Tobacco and Imperial, are domiciled in the UK and are two of the largest companies listed on the London stock market, even though all cigarette manufacturing in the UK has ceased. The UK therefore has an international duty to ensure that the industry is as tightly regulated as possible, and that this regulation and the provision of information about the industry support tobacco control in other countries.
Publicly available data on tobacco sales, profits, marketing and research inform the development of tobacco control and tax policy, and aid the identification and understanding of illicit market trends over time at local level. For example, academic analysis of industry pricing strategies, using commercially available data purchased from Nielsen, was used by the Treasury and Her Majesty’s Revenue and Customs to inform the decision to implement a minimum excise tax. However, commercially available data are not comprehensive and are often available only at extremely high cost.
World Health Organisation guidelines on the implementation of articles 9 and 10 of the framework convention state that
“information disclosed to governmental authorities in accordance with these guidelines, such as information on ingredients, product characteristics and the market, may also contribute to raising public awareness and advancing tobacco control policy.”
The Bill would therefore require the tobacco industry to provide the following information: at national and international level, and on an annual basis, the profits and taxes paid; at national level, and on a monthly basis, brand-specific price and sales data for all products, marketing spend by category, including spending on corporate social responsibility initiatives, and research spending; and at local authority level, and on an annual basis, sales data by product type for all products, including factory-made cigarettes, hand-rolled tobacco, heat not burn and e-cigarettes. It is already known that tobacco manufacturers collect that data, and some of it is supplied to HMRC. The Bill would require the data to be published, either by the industry or through HMRC.
It has been argued that the data cannot be published because of taxpayer confidentiality. However, that has not prevented similar legislation from being enacted in other jurisdictions. Regulations in Canada and New Zealand require publication of the data. In the United States, the Federal Trade Commission issues regular reports on the tobacco industry, covering that exact data.
Making such data available to UK researchers and policy makers would greatly help the development, implementation and evaluation of policy measures designed to reduce smoking prevalence. Such data at local level would also provide a useful insight into the illicit market; for example, significant reductions in local sales over a short period are likely to be an indicator of illicit sales activity.
It should be noted that tobacco manufacturers remain enormously profitable, in the UK and internationally, but a recent study shows that they pay virtually no corporation tax. In 2016, Imperial Brands, British American Tobacco and Gallaher together made UK operating profits in excess of £1 billion yet paid just £83.6 million in corporation tax. Over the past seven years, during which time corporation tax rates have varied between 20% and 28%—and often much less—British American Tobacco has paid virtually no corporation tax, including for four years in a row when it paid nothing at all. From 2014, Imperial Brands was permitted to stop reporting UK-adjusted profits. BAT and Philip Morris International have never done so, and none of the four transnational companies report profit before tax in the UK.
The provision and publication of data on sales and related information would support the development of tax policies that ensured that the tobacco industry paid tax at a level that properly reflected the damages it causes. The industry could easily absorb any additional costs of providing the information required under the Bill.
In summary, the Bill’s benefits to the Government and to public health would include better understanding of market developments to inform the development of tobacco control and tobacco tax policy, for example on tax structure; enabling future academic research on the price sensitivity of tobacco consumption to support work already carried out by HMRC; better identification and understanding of trends in the illicit market over time at local level; the development of proxy indicators for smoking prevalence changes at local level to enable local authorities to determine the effectiveness of their tobacco control activities; better understanding of the marketing strategies of the tobacco industry; and more accurate assessment of whether tobacco companies are paying appropriate levels of corporation tax.