Clause 1 - Rates of tobacco products duty
Finance Bill
9:15 am
Mr John Healey (Economic Secretary, HM Treasury; Wentworth, Labour)
The hon. Gentleman will find that the volume of illicit tobacco and cigarettes that finds its way into the UK with no UK duty paid is greater than 27 per cent. Our main tobacco smuggling problem comes not from travellers from the European Union, where they may pay duty at other EU member state rates, but from large-scale organised smuggling through freight. In most instances, the tobacco and cigarettes that are smuggled by freight have no duty paid anywhere before coming into this country.
I can confirm not only the progress that we have made to date but that we are seeking to reduce the illicit market share further in future years. We shall maintain concerted pressure on all aspects of the illicit market and take further measures where they become necessary to restrict the supply of illegal cigarettes. However, this duty increase continues the Government's twin track of maintaining the high real price of cigarettes while clamping down hard on the unregulated supply of the illicit market. Together, we believe that these measures will help to reduce smoking and lower the financial, social and personal costs associated with it. On that basis, I hope that the Committee will endorse and support the clause.