Tuesday, May 4, 1999 Published at 14:32 GMT 15:32 UK
Tobacco tax tussle
Calls from the Conservatives for a halt to annual rises in duty on cigarettes and tobacco have sparked angry protests from the anti-smoking lobby. BBC News Online presents the arguments of representatives from both sides of the debate.
John Whittingdale MP, Conservative Treasury
Of all Labour's stealth taxes, this year's 5% rise in tobacco duty is among the most pointless and counterproductive.
The last Conservative government raised tobacco duty to discourage people from smoking and to raise revenue to pay for public services. But the policy, accelerated by Labour, is now failing on both those counts.
A packet of 20 cigarettes now costs about twice as much in Britain as in Belgium. It is hardly surprising that people take advantage of the difference and bring cigarettes into the country from the Continent - both legally and illegally.
This drives a coach and horses through the government's policy - however well-meaning its intentions.
The availability of much cheaper cigarettes from abroad means that, for the first time in years, the proportion of people smoking - particularly young people - is starting to rise.
And the fact that fewer cigarettes are being bought in Britain means that tax revenue from cigarettes is actually forecast to start falling.
Labour have put up the price of cigarettes by 47½p a packet, but by 2000 the government expects the amount of revenue raised from tobacco tax to have fallen by £1.5 billion since the election.
Meanwhile, small shopkeepers up and down the country are losing tens of thousands of pounds in sales as imported cigarettes have already taken over 15% of the market.
They are paying the price for these relentless but useless tax rises. This policy is failing in terms of business, revenue, health and law and order.
The government needs to take its head out of the sand and look at this whole issue once again.
Clive Bates, Director of Action on Smoking and Health (ASH)
It is very disappointing that the Conservatives have swallowed the tobacco industry line on tobacco tax. This apparent U-turn on tobacco policy would spell disaster for public health if it were implemented.
It was a Conservative government that made the commitment to consistently raise tobacco tax above the rate of inflation. They are now arguing that it has gone too far but we think it has not gone far enough.
While acknowledging that there has been a rise in cigarette smuggling in recently years, ASH believes that the way to tackle this is not by abandoning a sound health and fiscal policy but by treating it as a law and order issue.
Measures such as better deployment of customs staff and the addition of tax stamps to show that duty has been paid should be used to counter the illegal trade.
The government's approach is absolutely right. It makes sense to increase taxes on things that are harmful such as tobacco rather than from jobs and investment.
Raising tobacco tax is also a very good health policy because it encourages people to give up smoking or not to start.
It is true to say that there has been a slight increase in the number of people smoking in the UK but this is mainly among teenagers. Looked at overall, however, the trend in smoking is decreasing with more and more middle-aged and older people choosing to give up.
If tobacco tax was frozen or reduced, it would lead to a rise in smoking and further misery and suffering from smoking-induced illnesses and premature death.
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