Clause 1 - Rates of tobacco products duty
Finance Bill
11:30 am
Mr Paul Boateng (Financial Secretary, HM Treasury; Brent South, Labour)
Ah yes. Those MPs came to see me in the Treasury and said that our measures were too draconian. [Interruption.] I know—I was surprised. They said that far too many white vans were being stopped. However, the contribution by the hon. Member for Kingston and Surbiton will be there for all to see in Hansard, and I shall draw it to the
attention of the next deputation from the Liberal Democrats that makes its way to the Treasury. His contribution was, nevertheless, important and I accept his analysis. It is important to have an appropriate focus on the problem. The approach taken by Customs and Excise has been described in the High Court as reasonable and proportionate, and is a reasonable response to a menace that undermines legitimate trade.
Had we not taken tough action to tackle tobacco smuggling, according to estimates confirmed by the National Audit Office, the market share of smuggled cigarettes would have reached 25 per cent. in 2000–01 and risen to 35 per cent. in 2003–04. Instead, as a result of our anti-tobacco-smuggling strategy, the market share of smuggled cigarettes was 21 per cent. in 2000–01 and early indications are that Customs has reached its key target of reducing the market share of smuggled cigarettes to 20 per cent. by 2003–04, which is 15 per cent. lower than it would have been without the necessary action. As part of the routine annual publication of figures and estimates, we shall publish the detailed outcome of the strategy for this year in due course.