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Mrs. Lait: May I ask the Minister to add to her reading list some books about smuggling in the 18th and 19th centuries? That would indicate to her the solution to the problem. "The Albion Tree", one of the best, is available in the House of Commons Library.

Dawn Primarolo: If the hon. Lady is seriously telling me that smuggling has been around for a very long time, I must say that I agree with her. If she is saying that we need complex strategies to tackle it, I also have to agree with that. However, I would encourage her to find a solution in this century rather than seeking refuge in the past. She might pay a little more attention to the strategies that the Government are deploying rather than lamenting the fact that we are not behaving as if we were in the 17th century: I leave that to her hon. Friends.

Several points were made about the Swedish Government's announcement on 14 April that they intend to reduce duty on cigarettes by 27 per cent. in 1999. They will achieve that by reducing specific rates. I was asked why we do not take similar action in the United Kingdom. First, we would lose £2.4 billion in a full year, which is the equivalent of 1½p on the basic rate of income tax. We are not prepared to countenance the loss of that revenue.

Secondly, I do not know the hon. Lady's position on Europe, but she seemed to imply that we should allow other member states to determine our duty rates. She prayed in aid the Swedes' activities in reducing their rates, as did the right hon. Member for Wells. That is a solution to their problem, but information from Customs and Excise and the tobacco industry suggests that the problem of smuggling in Sweden is much greater than the problem here, much as we regret our own. Customs and the Tobacco Manufacturers Association are discussing reliable methods of trying to estimate the overall scale of cigarette smuggling--a problem that, as the hon. Lady and others have said, is beginning to emerge.

In the light of our earlier debate on beer duty, it frankly beggars belief that the hon. Lady and others say that we have no enthusiasm for tackling smuggling and the

28 Apr 1998 : Column 217

problems that it causes. Imported cigarettes and smuggling are a problem not only for the UK and other European Union member states with high-duty regimes; they are also a problem for those with low-duty regimes. The hon. Lady's causal connection between duty and smuggling is not a fair representation of the complexity of the problem.

The Government have made it clear that, on health grounds, our policy is correct. We have given more money to the health service than we would have done by linking the escalator to money moved across to the health service, as the hon. Member for Kingston and Surbiton suggested we should. I remind him that the Government have already given an extra £2 billion to the national health service. Our commitment to funding health and education is clear, in terms of priorities.

I ask the Committee to reject the amendment, which would reduce duty to 3 per cent., and to support the duty of 5 per cent. and our phrasing on hand-rolled tobacco, as they are the best ways to deliver the Government's health policy. That would recognise that we are dealing vigorously with the problems of smuggling and will not allow that criminal activity to continue to undermine public expenditure and public revenue.

8.45 pm

Mr. Heathcoat-Amory: We have heard the Financial Secretary at her worst. She either could not or would not answer our questions. I remind her that she said in the House in 1995--I gave the quotation earlier--that increasing taxation is not the way to reduce consumption of tobacco or to deal with the health effects.

I asked the hon. Lady what had caused her to change to her mind. Switching from Opposition to Government has clearly had an extraordinary effect on her attitudes. Apparently she now thinks that there is no way of dealing with this problem other than by increasing prices and taxation.

It has occurred to my hon. Friends and me that the Government have changed their mind on another way of tackling tobacco consumption--through advertising. The Committee will remember that the Labour party won the election on a clear pledge to stop advertising on formula one racing cars. The Prime Minister changed his mind, and broke that pledge. It was later discovered that Bernie Ecclestone, who persuaded him to do so, had given £1 million to the Labour party. Lucky old Bernie got his bung back on that occasion, but we are left with a broken promise and the fact that the much heralded ban on tobacco advertising has not come into effect. Perhaps that is why the Government are relying more on increasing duty on tobacco.

My knowledgeable hon. Friend the Member for Beckenham (Mrs. Lait) has drawn attention to the seriousness of the smuggling or bootlegging problem and the culture of illegality to which it has led. The Financial Secretary said that she was concerned about that, but she clearly is not grappling with the problems. The proposed increases widen the gap between continental rates of duty and our own, which will make the situation worse.

The Financial Secretary said that there was a problem of young people taking up smoking, and, during our debate, other hon. Members have recognised the

28 Apr 1998 : Column 218

seriousness of that problem. If tobacco products are smuggled in, they are made available outside Government controls on the sale of tobacco to minors. It is an unruly and anarchic market, and it leads to young people taking up smoking. For that pure health reason alone, the Government ought to think twice before increasing the escalator to 5 per cent.

Opposition Members have shown how savagely regressive this policy is. The Financial Secretary appeared entirely ignorant of that. If she did recognise it, she seemed entirely uninfluenced by it. We conclude that the Government's concern about the poor and those on low incomes is entirely synthetic. The figures I quoted earlier showed that smoking households in the bottom decile spend up to a quarter of their income on tobacco products. That ought to worry members of a party that, until fairly recently, had at least a published concern for the needy and the disadvantaged.

My final point, which the Financial Secretary continues to avoid, is that the Prime Minister recognised, before the election, that there was a problem. He said so when he was looking for votes in the tobacco industry and related industries. He promised an independent, urgent and comprehensive study. He has broken that promise. When will the hon. Lady publish the substitute study, by Customs and Excise, to inform our debates, and the public, about the real facts behind the Government's taxation policy, which is driven entirely by revenue considerations? The health issue is purely a smokescreen; it is revenue that the Government are after. If they disagree, let them publish a report on the matter.

Mr. Patrick Hall (Bedford): Will the right hon. Gentleman give way?

Mr. Heathcoat-Amory: The hon. Gentleman has not contributed to the debate, and I do not propose to give way to him. In any case, it is not from the hon. Gentleman that I shall get an answer to the following question, because he is not in a position to give one. When do the Government intend to fulfil their pre-election promise, on which the hon. Gentleman and others stood, to undertake an investigation of this issue and publish the results? Until that happens, we shall conclude that the clause is revenue-driven. I urge the Committee to accept our amendment.

Question put, That the amendment be made:--

The Committee divided: Ayes 106, Noes 303.

Division No. 260
[8.50 pm


Ancram, Rt Hon Michael
Arbuthnot, James
Atkinson, David (Bour'mth E)
Beggs, Roy
Bercow, John
Blunt, Crispin
Brazier, Julian
Browning, Mrs Angela
Burns, Simon
Cash, William
Chapman, Sir Sydney
(Chipping Barnet)
Chope, Christopher
Clappison, James
Clark, Rt Hon Alan (Kensington)
Clark, Dr Michael (Rayleigh)
Clarke, Rt Hon Kenneth
Clifton-Brown, Geoffrey
Collins, Tim
Colvin, Michael
Cormack, Sir Patrick
Cran, James
Curry, Rt Hon David
Davies, Quentin (Grantham)
Davis, Rt Hon David (Haltemprice)
Dorrell, Rt Hon Stephen
Duncan Smith, Iain
Evans, Nigel
Fabricant, Michael
Fallon, Michael
Fox, Dr Liam
Fraser, Christopher
Garnier, Edward
Gibb, Nick
Greenway, John
Grieve, Dominic
Hamilton, Rt Hon Sir Archie
Hammond, Philip
Heald, Oliver
Heathcoat-Amory, Rt Hon David
Hogg, Rt Hon Douglas
Horam, John
Hunter, Andrew
Jackson, Robert (Wantage)
Jenkin, Bernard
Johnson Smith,
Rt Hon Sir Geoffrey
Key, Robert
King, Rt Hon Tom (Bridgwater)
Kirkbride, Miss Julie
Laing, Mrs Eleanor
Lait, Mrs Jacqui
Lansley, Andrew
Leigh, Edward
Letwin, Oliver
Lewis, Dr Julian (New Forest E)
Lidington, David
Lilley, Rt Hon Peter
Lloyd, Rt Hon Sir Peter (Fareham)
Luff, Peter
Lyell, Rt Hon Sir Nicholas
MacGregor, Rt Hon John
McIntosh, Miss Anne
MacKay, Andrew
Maclean, Rt Hon David
McLoughlin, Patrick
Madel, Sir David
Malins, Humfrey
Mates, Michael
Maude, Rt Hon Francis
Mawhinney, Rt Hon Sir Brian
Moss, Malcolm
Norman, Archie
Paice, James
Prior, David
Randall, John
Robathan, Andrew
Robertson, Laurence (Tewk'b'ry)
Roe, Mrs Marion (Broxbourne)
Rowe, Andrew (Faversham)
Ruffley, David
St Aubyn, Nick
Sayeed, Jonathan
Simpson, Keith (Mid-Norfolk)
Spelman, Mrs Caroline
Spicer, Sir Michael
Spring, Richard
Stanley, Rt Hon Sir John
Steen, Anthony
Streeter, Gary
Swayne, Desmond
Syms, Robert
Taylor, John M (Solihull)
Taylor, Sir Teddy
Tredinnick, David
Trend, Michael
Tyrie, Andrew
Viggers, Peter
Wardle, Charles
Waterson, Nigel
Whitney, Sir Raymond
Widdecombe, Rt Hon Miss Ann
Willetts, David
Wilshire, David
Winterton, Mrs Ann (Congleton)
Woodward, Shaun
Yeo, Tim
Young, Rt Hon Sir George

Tellers for the Ayes:

Mr. John Whittingdale and
Mr. Stephen Day.


Abbott, Ms Diane
Adams, Mrs Irene (Paisley N)
Ainger, Nick
Ainsworth, Robert (Cov'try NE)
Alexander, Douglas
Allan, Richard
Allen, Graham
Anderson, Donald (Swansea E)
Anderson, Janet (Rossendale)
Armstrong, Ms Hilary
Ashdown, Rt Hon Paddy
Ashton, Joe
Atherton, Ms Candy
Atkins, Charlotte
Ballard, Mrs Jackie
Banks, Tony
Barnes, Harry
Bayley, Hugh
Beckett, Rt Hon Mrs Margaret
Begg, Miss Anne
Beith, Rt Hon A J
Bell, Stuart (Middlesbrough)
Benn, Rt Hon Tony
Bennett, Andrew F
Benton, Joe
Bermingham, Gerald
Best, Harold
Blackman, Liz
Blizzard, Bob
Boateng, Paul
Borrow, David
Bradley, Peter (The Wrekin)
Bradshaw, Ben
Breed, Colin
Brinton, Mrs Helen
Brown, Rt Hon Nick (Newcastle E)
Brown, Russell (Dumfries)
Browne, Desmond
Bruce, Malcolm (Gordon)
Burden, Richard
Burgon, Colin
Burstow, Paul
Butler, Mrs Christine
Byers, Stephen
Cable, Dr Vincent
Caborn, Richard
Campbell, Alan (Tynemouth)
Campbell, Mrs Anne (C'bridge)
Campbell, Menzies (NE Fife)
Campbell, Ronnie (Blyth V)
Campbell-Savours, Dale
Canavan, Dennis
Cann, Jamie
Casale, Roger
Caton, Martin
Chapman, Ben (Wirral S)
Chaytor, David
Chidgey, David
Chisholm, Malcolm
Clark, Dr Lynda
(Edinburgh Pentlands)
Clark, Paul (Gillingham)
Clarke, Charles (Norwich S)
Clarke, Eric (Midlothian)
Clarke, Rt Hon Tom (Coatbridge)
Clelland, David
Clwyd, Ann
Coaker, Vernon
Coleman, Iain
Cook, Frank (Stockton N)
Cotter, Brian
Cousins, Jim
Cox, Tom
Cranston, Ross
Cryer, Mrs Ann (Keighley)
Cummings, John
Cunliffe, Lawrence
Cunningham, Rt Hon Dr John
Cunningham, Jim (Cov'try S)
Cunningham, Ms Roseanna
Dafis, Cynog
Dalyell, Tam
Darling, Rt Hon Alistair
Davey, Edward (Kingston)
Davidson, Ian
Davies, Rt Hon Denzil (Llanelli)
Davies, Geraint (Croydon C)
Dawson, Hilton
Dean, Mrs Janet
Denham, John
Dewar, Rt Hon Donald
Dobbin, Jim
Dobson, Rt Hon Frank
Donohoe, Brian H
Dowd, Jim
Drew, David
Drown, Ms Julia
Eagle, Angela (Wallasey)
Eagle, Maria (L'pool Garston)
Edwards, Huw
Ellman, Mrs Louise
Ewing, Mrs Margaret
Fearn, Ronnie
Flynn, Paul
Follett, Barbara
Foster, Rt Hon Derek
Foster, Michael Jabez (Hastings)
Foster, Michael J (Worcester)
Foulkes, George
Fyfe, Maria
Gardiner, Barry
George, Andrew (St Ives)
George, Bruce (Walsall S)
Gerrard, Neil
Gibson, Dr Ian
Godman, Dr Norman A
Godsiff, Roger
Goggins, Paul
Golding, Mrs Llin
Griffiths, Jane (Reading E)
Griffiths, Nigel (Edinburgh S)
Griffiths, Win (Bridgend)
Gunnell, John
Hain, Peter
Hall, Mike (Weaver Vale)
Hall, Patrick (Bedford)
Hancock, Mike
Hanson, David
Harvey, Nick
Heal, Mrs Sylvia
Heath, David (Somerton & Frome)
Henderson, Ivan (Harwich)
Hepburn, Stephen
Heppell, John
Hesford, Stephen
Hinchliffe, David
Hoey, Kate
Home Robertson, John
Hood, Jimmy
Hoon, Geoffrey
Hopkins, Kelvin
Howarth, George (Knowsley N)
Howells, Dr Kim
Hoyle, Lindsay
Humble, Mrs Joan
Hurst, Alan
Hutton, John
Iddon, Dr Brian
Jackson, Helen (Hillsborough)
Jamieson, David
Jenkins, Brian
Johnson, Alan (Hull W & Hessle)
Johnson, Miss Melanie
(Welwyn Hatfield)
Jones, Barry (Alyn & Deeside)
Jones, Helen (Warrington N)
Jones, Ieuan Wyn (Ynys Mon)
Jones, Ms Jenny
(Wolverh'ton SW)
Jones, Jon Owen (Cardiff C)
Jones, Martyn (Clwyd S)
Keeble, Ms Sally
Keen, Ann (Brentford & Isleworth)
Kennedy, Charles (Ross Skye)
Kennedy, Jane (Wavertree)
Kidney, David
Kilfoyle, Peter
King, Andy (Rugby & Kenilworth)
Kingham, Ms Tess
Kirkwood, Archy
Kumar, Dr Ashok
Lawrence, Ms Jackie
Laxton, Bob
Lepper, David
Leslie, Christopher
Levitt, Tom
Lewis, Ivan (Bury S)
Liddell, Mrs Helen
Livsey, Richard
Lloyd, Tony (Manchester C)
Llwyd, Elfyn
Lock, David
Love, Andrew
McAllion, John
McAvoy, Thomas
McCabe, Steve
McCafferty, Ms Chris
McDonnell, John
McGuire, Mrs Anne
McIsaac, Shona
McKenna, Mrs Rosemary
Mackinlay, Andrew
McNamara, Kevin
McNulty, Tony
McWalter, Tony
Mallaber, Judy
Mandelson, Peter
Marsden, Gordon (Blackpool S)
Marshall, David (Shettleston)
Marshall, Jim (Leicester S)
Marshall-Andrews, Robert
Maxton, John
Michael, Alun
Michie, Bill (Shef'ld Heeley)
Milburn, Alan
Moffatt, Laura
Moonie, Dr Lewis
Moore, Michael
Moran, Ms Margaret
Morgan, Alasdair (Galloway)
Morgan, Ms Julie (Cardiff N)
Morgan, Rhodri (Cardiff W)
Morley, Elliot
Morris, Rt Hon John (Aberavon)
Mudie, George
Mullin, Chris
Murphy, Denis (Wansbeck)
Murphy, Jim (Eastwood)
Oaten, Mark
O'Brien, Bill (Normanton)
O'Brien, Mike (N Warks)
O'Neill, Martin
Organ, Mrs Diana
Osborne, Ms Sandra
Palmer, Dr Nick
Pearson, Ian
Perham, Ms Linda
Pickthall, Colin
Pike, Peter L
Plaskitt, James
Pope, Greg
Pound, Stephen
Powell, Sir Raymond
Prentice, Ms Bridget (Lewisham E)
Prentice, Gordon (Pendle)
Primarolo, Dawn
Prosser, Gwyn
Purchase, Ken
Quin, Ms Joyce
Quinn, Lawrie
Radice, Giles
Rammell, Bill
Rapson, Syd
Reed, Andrew (Loughborough)
Reid, Dr John (Hamilton N)
Robinson, Geoffrey (Cov'try NW)
Rogers, Allan
Rooker, Jeff
Ross, Ernie (Dundee W)
Roy, Frank
Ruane, Chris
Ruddock, Ms Joan
Russell, Bob (Colchester)
Sanders, Adrian
Savidge, Malcolm
Sawford, Phil
Shaw, Jonathan
Sheerman, Barry
Sheldon, Rt Hon Robert
Singh, Marsha
Skinner, Dennis
Smith, Angela (Basildon)
Smith, Miss Geraldine
(Morecambe & Lunesdale)
Smith, John (Glamorgan)
Smith, Llew (Blaenau Gwent)
Spellar, John
Squire, Ms Rachel
Steinberg, Gerry
Stevenson, George
Stewart, David (Inverness E)
Stinchcombe, Paul
Stoate, Dr Howard
Stott, Roger
Strang, Rt Hon Dr Gavin
Stringer, Graham
Swinney, John
Taylor, Rt Hon Mrs Ann
Taylor, Ms Dari (Stockton S)
Taylor, Matthew (Truro)
Temple-Morris, Peter
Thomas, Gareth (Clwyd W)
Thomas, Gareth R (Harrow W)
Tipping, Paddy
Touhig, Don
Trickett, Jon
Truswell, Paul
Turner, Dennis (Wolverh'ton SE)
Turner, Dr Desmond (Kemptown)
Turner, Dr George (NW Norfolk)
Twigg, Derek (Halton)
Tyler, Paul
Wallace, James
Walley, Ms Joan
Watts, David
Webb, Steve
Welsh, Andrew
Wicks, Malcolm
Williams, Rt Hon Alan
(Swansea W)
Williams, Alan W (E Carmarthen)
Willis, Phil
Wills, Michael
Winnick, David
Wise, Audrey
Wood, Mike
Worthington, Tony
Wray, James

Tellers for the Noes:

Mr. Clive Betts and
Mr. John McFall.

Question accordingly negatived.

28 Apr 1998 : Column 221

Clause 10 ordered to stand part of the Bill.

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