Clause 4 - Rates of tobacco products duty
Finance Bill
9:45 am
Mr Stephen Timms (Financial Secretary, HM Treasury; East Ham, Labour)
I join my right hon. Friend and other hon. Members in welcoming you back to the Chair, Dr. Clark. Your immense experience of our proceedings as well as your well known fairness will help us greatly.
Smoking is the single largest cause of preventable illness and premature death in the UK, killing 120,000 people every year. The increase in duty on cigarettes has encouraged existing smokers to smoke less or to quit and has discouraged children and young people from taking up the habit. Maintaining the real price of cigarettes and tobacco is an important contributor towards our health objectives. The clause therefore increases rates of excise duty on all tobacco products by approximately 1.8 per cent., in line with inflation, with effect from 6 pm on 7 March 2001.
We had many discussions last year about the discrepancy between the indexation rate for excise duties and allowances. We argued that it was swings and roundabouts. This year's figures demonstrate that that is the case. Allowances are being uprated by 3.3 per cent. and excise duties by only 1.8 per cent. I suspect that we will hear a good deal less about that in this Committee. I commend this clause to the Committee.