A Consultation on Electronic Cigarettes and Strengthening Tobacco Control in Scotland

Partial Business and Regulatory Impact Assessment

Title of Proposal

A Consultation on Electronic Cigarettes and Strengthening Tobacco Control in Scotland

Purpose and intended effect

• Background
  The proposals in the accompanying consultation document support the commitments in the latest Scottish Government tobacco control strategy, Creating a Tobacco-Free Generation - A Tobacco Control Strategy for Scotland (2013^[59]). This Strategy sets out the Scottish Government's vision for a tobacco-free generation by 2034 (defined as smoking prevalence of less than 5%). It also recognises the growing market of new products which may promote smoking behaviours, such as electronic cigarettes (e-cigarettes), and sets out a commitment to exploring necessary action to protect public health.

• Objective
  Creating a Tobacco-Free Generation builds on previous policy documents and legislation which aimed to protect public health by shifting cultural attitudes to smoking by reducing the attractiveness and availability of tobacco products and protecting people from second-hand smoke. These proposals build on the Scottish Government's existing approach to tobacco control. The proposals on e-cigarettes seek to recognise the potential benefits of e-cigarettes to current smokers while protecting non-smokers, particularly young people, from the promotion of smoking behaviours. They aim to reduce access and availability of these products to young people under the age of 18. The proposal relating to smoking in cars seeks to build on previous legislation by protecting young people under the age of 18 from exposure to second-hand smoke in enclosed spaces.

• Rationale for Government intervention
  Smoking is associated with a range of illnesses and is the primary preventable cause of ill health and premature death. Each year, tobacco use is associated with over 13,000 deaths (around a quarter of all deaths in Scotland every year) and 56,000 hospital admissions in Scotland. Smoking makes a significant contribution to Scotland's health inequalities with smoking rates in our most deprived communities remaining disproportionately high - 39% in the most deprived areas compared to 11% in the least deprived areas in 2013. Annual costs to Scotland's health service associated with tobacco-related illness are estimated to exceed £300m and may be higher than £500m each year^[60].
  
  In recent years, there has been a growth in the availability and popularity of e-cigarettes which mimic smoking behaviours and contain nicotine. Our Strategy, Creating a Tobacco-Free Generation, included a commitment to continue to respond to market developments, which may promote or normalise smoking behaviours. It also included a specific commitment to consider what further action on e-cigarettes might be required in Scotland to protect public health. Helping those who smoke to stop, protecting people from exposure to second-hand smoke, and reducing the number of new people who take up smoking each year are clear public health priorities.
  
  The Scottish Government's purpose is to focus Government and public services on creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth. This is underpinned by five strategic objectives. These proposals, in support of Creating a Tobacco-Free Generation - A Tobacco Control Strategy for Scotland (2013), contribute positively to the following objectives:

• WEALTHIER & FAIRER - Enable businesses and people to increase their wealth and more people to share fairly in that wealth.
  
  Discouraging young people from starting to smoke and reducing smoking prevalence rates in Scotland will reduce the burden of tobacco use on business, public services and our most deprived communities, and thus contribute to a Wealthier and Fairer Scotland.

• SAFER & STRONGER - Help local communities to flourish, becoming stronger, safer places to live, offering improved opportunities and a better quality of life.
  
  Discouraging young people from starting to smoke and reducing smoking prevalence rates in the long term could reduce demand for illicit tobacco and help support the development of more resilient, cohesive and successful communities.

• HEALTHIER - Help people to sustain and improve their health, especially in disadvantaged communities, ensuring better, local and faster access to health care.
  
  Discouraging young people from starting to smoke and reducing smoking prevalence rates will contribute to increased physical and mental wellbeing and increased life expectancy amongst Scots, especially in our most disadvantaged communities.

• SMARTER - Expand opportunities for people in Scotland to succeed from nurture through to life long learning, ensuring higher and more widely shared achievements.
  
  Discouraging young people from starting to smoke will support them to make positive choices and fulfil their potential.

The Strategic Objectives themselves are supported by 15 national outcomes which describe in more detail what the Scottish Government wants to achieve over the next ten years. Policies to tackle smoking will make a positive contribution to delivering over half of our published national outcomes:

• we live longer and healthier lives;
• we have tackled the significant inequalities in Scottish life;
• we have strong, resilient and supportive communities where people take responsibility for their own actions and how they affect others;
• we live our lives safe from crime, disorder and danger;
• we realise our full economic potential with more and better employment opportunities for our people;
• our young people are more successful learners, confident individuals, effective contributors and responsible citizens;
• we have improved the life chances for children, young people and families at risk; and
• our children have the best start in life and are ready to succeed.

Consultation

• Within Government
  As well as the Better Regulation Unit and analysts, we have spoken with colleagues in in criminal justice policy in relation to the creation of offences; we will continue to work with them. We have worked with licensing policy to understand the operation of policies such as 'Challenge 25' as we seek to bring some consistency between alcohol, tobacco and e-cigarettes.

• Public Consultation
  This consultation-stage Business and Regulatory Impact Assessment will sit alongside a public consultation paper to form a 12 week public consultation. We will consider the views of businesses, retailers, statutory organisations, enforcement agencies, third sector and other interested parties as the consultation develops.

• Business
  To date there have been some conversations with business around e-cigarettes and strengthening tobacco control as part of the Ministerial Working Group on Tobacco Control and during the development of Creating a Tobacco-Free Generation. This public consultation invites the views of businesses on specific proposals.

Proposal 1 - Age Restriction for e-cigarettes

Options

Option 1 - Do nothing. There would continue to be no age restriction on e-cigarettes and refills which could be sold to individuals of any age, including children. Although many retailers operate a voluntary restriction on sales to children and young people.

Option 2 - Designate e-cigarettes and / or refills as age-restricted products for purchase by adults aged 18 and over.

Doing nothing would allow the current voluntary measures implemented by many retailers to continue. Introducing a statutory restriction will allow this measure to be enforced and provide clarity and consistency on age-appropriate sales.

Sectors and groups affected

Young people and children under the age of 18 will be impacted by both option 1 and 2. Businesses, including, Small Medium Enterprise and micro businesses, big retailers and specialist high street will be impacted by option 2. They will have to ensure they comply with the legislation. Local authorities will be responsible for enforcing the legislation. Government and society will be affected.

Benefits

Option 1: This option, because young people could purchase e-cigarettes, could provide an indirect benefit to business through a larger legal customer base. An online survey of 11 - 18 year olds conducted by ASH across Great Britain in March 2014^[61] suggested that 7% had tried electronic cigarettes at least once and 2% used them weekly or monthly. Applying this to the Scottish population gives an estimate of around 8,000 young people in Scotland who could be occasional users of e-cigarettes.^[62]

Further evidence on use by secondary school pupils in Scotland will be available from November 2014 in the Scottish Schools Adolescent Lifestyle and Substance Use Survey report. Given the large sample size (more than 30,000) and spread across state sector schools, this will provide a very good indication of the proportion of 11 -18 year old who have tried, used or still use e-cigarettes. Additionally, Scottish Health Survey data will be available in September 2015 on prevalence across the general population and will provide additional evidence for estimating and tracking use by young people.

We are aware that many businesses and manufacturers already state that e-cigarettes should not be sold to anyone under the age of 18 so the potential market share is likely to be very small.

Option 2: This option will provide a benefit to government, society, and young people in particular, by providing a clear and consistent message that e-cigarette products are not suitable for, and therefore should not be sold to, children and young people under the age of 18. There are over a million young people in Scotland under the age of 18, of whom, around 40% are in the 11-17 age group and all with the potential to benefit from this proposal.^[63] A Great Britain online survey of 11 - 18 year olds conducted by ASH in March 2014¹ suggested that 7% had tried electronic cigarettes at least once and 2% used them weekly or monthly. Applying this to the Scottish population suggests that over 8,000 young people in Scotland could be occasional users of e-cigarettes.

Further evidence on use by secondary school pupils in Scotland will be available from November 2014 in the Scottish Schools Adolescent Lifestyle and Substance Use Survey report. Given the large sample size (more than 30,000) and spread across state sector schools, this will provide a very good indication of the proportion of 11-18 year olds who have tried, used or still use e-cigarettes. Additionally, Scottish Health Survey data will be available in September 2015 on prevalence across the general population and will provide additional evidence for estimating and tracking use by young people.

It will reduce confusion by bringing the products into line with other age restricted products such tobacco, alcohol and solvents. This would benefit businesses by providing a consistent legal basis for sale across all retailers. There is an existing legislative framework around proof-of-age for other age-restricted products, with which retailers are already familiar.

This option supports the Scottish Government's ambition to have a tobacco-free generation and associated health benefits, reduced costs to the NHS and productivity.

Costs

Option 1: There are no direct costs associated with option 1 but it could indirectly lead to increased health costs if non-smokers start using e-cigarettes as young people, and future evidence showed that e-cigarette use is a risk to health. There may also be a risk that a young person who starts using e-cigarettes may go on to use tobacco, though the evidence around this is not yet clear. The health harms associated with the tobacco use are well established. The Great Britain online survey of 11 - 18 year olds conducted by ASH in March 2014 suggested 2% used them weekly or monthly. Applying this to the Scottish population gives an estimate of over 8,000 young people in Scotland who could be occasional users of e-cigarettes^[64].

Further evidence on use by secondary school pupils in Scotland will be available from November 2014 in the Scottish Schools Adolescent Lifestyle and Substance Use Survey report. Given the large sample size (more than 30,000) and spread across state sector schools, this will provide a very good indication of the proportion of 11-18 year olds who have tried, used or still use e-cigarettes. Additionally, Scottish Health Survey data will be available in September 2015 on prevalence across the general population and will provide additional evidence for estimating and tracking use by young people.

Option 2: This option could result in a cost to business associated with staff training and familiarisation with the new legislation though many businesses will already be familiar with age-restricted legislation if they already sell goods such as alcohol or tobacco. It is anticipated that this cost would be small and is not quantified.

There is also the potential for a small decline in income for businesses from retailing e-cigarettes and related products. The Great Britain online survey of 11 - 18 year olds conducted by ASH in March 2014 identified 2% as weekly or monthly users of e-cigarettes. Applying this to the Scottish population suggests 8,000 young people who could currently be possible customers, even if only occasionally. It is difficult to quantify the impact on the retail sector as we do not have data on the number of retailers currently operating in this market in Scotland. In addition, some retailers already voluntarily restrict sales to children and young people.

The consultation will allow businesses retailing e- cigarettes to provide the Scottish Government with information and data which can be taken into consideration when preparing the final Business and Regulatory Impact Assessment.

This option will result in costs to government and local government associated with enforcement.

Proposal 2 - Proxy Purchase for e-cigarettes

Option 1 - Do nothing. The introduction of an age restriction for e-cigarettes would prevent children and young people under the age of 18 from directly purchasing them. However, it would still be possible for an adult to purchase them and legally supply them to a child or young person under age 18.

Option 2 - Create an offence for an adult to supply an e-cigarette and / or refill to a young person under age 18 ('proxy purchase').

Sectors and groups affected

Young people and children under the age of 18 will be impacted by this proposal. People over the age of 18 will have to comply with the legislation. Government and society will be affected.

Benefits

Option 1: This option could lead to indirect benefits to businesses if people over the age of 18 purchase e-cigarettes on behalf of children and young adults under the age of 18. A Great Britain online survey of 11 - 18 year olds conducted by ASH in March 2013 identified 2% as weekly or monthly users of e-cigarettes. Applying this to the Scottish population suggests around 8,000 young people in Scotland are currently possible customers, even if only occasionally.

Further evidence on use by secondary school pupils in Scotland will be available from November 2014 in the Scottish Schools Adolescent Lifestyle and Substance Use Survey report. Given the large sample size (more than 30,000) and spread across state sector schools, this will provide a very good indication of the proportion of 11-18 year olds who have tried, used or still use e-cigarettes. Additionally, Scottish Health Survey data will be available in September 2015 on prevalence across the general population and will provide additional evidence for estimating and tracking use by young people. We do not have data on the extent to which adults purchase these products on their behalf. This is likely to be a very small market share.

Option 2: This option will provide a benefit to society through a clear and consistent message that e-cigarette products are not suitable for, and therefore should not be provided for, children and young people under the age of 18 (outwith the medicinal regulatory framework). It will reduce confusion by bringing the products into line with other age restricted products such tobacco, alcohol and solvents.

A Great Britain online survey of 11 - 18 year olds conducted by ASH in March 2014¹ suggested that 7% had tried electronic cigarettes at least once and 2% used them weekly or monthly. This suggests that over 8,000 young people in Scotland could be occasional users of e-cigarettes.

Further evidence on use by secondary school pupils in Scotland will be available from November 2014 in the Scottish Schools Adolescent Lifestyle and Substance report. Given the large sample size (more than 30,000) and spread across state sector schools, this will provide a very good indication of the proportion of 11-18 year olds who have tried, used or still use e-cigarettes. Additionally, Scottish Health Survey data will be available in September 2015 on prevalence across the general population and will provide additional evidence for estimating and tracking use by young people. We do not have data on the extent to which adults purchase these products on young people's behalf. It is likely that this is a very small market share.

Option 2: This option supports the Scottish Government's ambition to have a tobacco-free generation and associated health benefits, reduced costs to the NHS and productivity. There are over a million young people in Scotland under the age of 18 with the potential to benefit from this proposal. It directly benefits Government by allowing strengthened enforcement of Proposal 1.

Costs

Option 1: This option could lead indirectly to increased health costs to government if there is use of e-cigarettes among children and young adults and future evidence shows that e-cigarette use is a risk to health. There may also be a risk that someone who starts using an e-cigarette may go on to use tobacco though the evidence around this is not yet clear. The health harms associated with the tobacco use are well established. A Great Britain online survey of 11 - 18 year olds conducted by ASH in March 2014 identified 2% as weekly or monthly users of e- cigarettes. This suggests around 8,000 young people in Scotland could be occasional users of e-cigarettes.

Further evidence on use by secondary school pupils in Scotland will be available from November 2014 in the Scottish Schools Adolescent Lifestyle and Substance report. Given the large sample size (more than 30,000) and spread across state sector schools, this will provide a very good indication of the proportion of 11-18 year olds who have tried, used or still use e-cigarettes. Additionally, Scottish Health Survey data will be available in September 2015 on prevalence across the general population and will provide additional evidence for estimating and tracking use by young people.

Option 2: This option will result in costs to government and local government associated with enforcement. There is the potential for a small loss of revenue for businesses if adults currently purchase e-cigarettes and associated products for use by young people under 18 years old. We do not have data on the extent to which adults purchase these products on young people's behalf. It is likely that this is a very small market share.

Proposal 3 - Domestic Advertising and Promotion of e-cigarettes

The European Tobacco Products Directive^[65] bans a range of advertising and promotion mechanisms for e-cigarette and calls on Member States to take similar action on domestic advertising within their own jurisdictions.

Option 1 - Do nothing

Option 2 - Introduce a ban on domestic advertising and promotion (this could include advertising and promotion of e-cigarettes by way of billboards, leafleting, brand-sharing, free distribution, nominal pricing, point of sale and domestic events sponsorship) of e-cigarettes.

Option 3 - Introduce a ban on domestic advertising and promotion of e-cigarettes with exceptions to allow distribution of information about, and the accessibility of, e-cigarettes aimed at adult smokers to enable them to make informed choices about whether to switch from tobacco to an e-cigarette.

Sectors and groups affected

Businesses, including Small Medium Enterprises, micro businesses, big retailers and specialist high street retailers will be impacted by option 1, 2 and 3. Government and society will be impacted by option 1, 2 and 3.

Benefits

Option 1: This option would allow retailers to continue to advertise by way of billboards, leafleting, brand-sharing, free distribution, nominal pricing, point of sale and domestic events sponsorship. This will increase awareness of their product and potential growth in customer base. A Great Britain online survey conducted by ASH in March 2014^[66] estimated that there were 2.1 million adults in Great Britain using electronic cigarettes. An estimate, based on population share, would be that 180,600 adults in Scotland use e-cigarettes. Scottish Health Survey data will be available in September 2015 providing further evidence on prevalence of e-cigarettes in Scotland. This option would also provide a customer base for advertising and marketing firms.

This option could result in an indirect benefit to government if the new customer base included smokers who stop using traditional tobacco products as a result of using an e-cigarette. This could lead to fewer smoking related illnesses and a more productive society. The ASH survey found that over 50% of e-cigarette users were ex-smokers. Additional evidence^[67] suggests a steep rise in the number of smokers who use e-cigarettes (for any purpose) from 2% in 2011 to 14% in 2014 in England. It also found that 15% of attempts to stop in the past year have involved e-cigarettes^[68]. The Scottish Household Survey (2013) reports that the adult smoking rate in Scotland is 23.1%. There remains considerable potential for smoking cessation. It is not currently possible to quantify how many smokers might be influenced to move from tobacco to e-cigarettes as result of advertising.

Option 2: This option could be a direct benefit to business in reduced advertising costs. It would benefit government and society by strengthening the restrictions on cross-border advertising and promotion required by the Tobacco Products Directive. This option could provide direct health benefits for society, if by preventing the promotion of a behaviour which mimics smoking, it leads to prevention of young people and adult non-smokers taking up nicotine use and possibly smoking tobacco. There are over a million young people in Scotland under the age of 18 with the potential to benefit from this proposal.

Option 3: This option could provide a direct benefit to business in reduced advertising costs and it would allow customers who were interested in smoking cessation to access appropriate information about the use of e-cigarettes. Smokers, might stop using traditional tobacco products as a result. This could lead to fewer smoking related illnesses and a more productive society. The Scottish Household Survey (2013) reports that the adult smoking rate in Scotland is 23.1%. There remains considerable potential for smoking cessation. It is not currently possible to quantify how many smokers might be influenced to move from tobacco by receiving information about e-cigarettes.

Costs

Option 1: This option could risk indirect costs to Government and society as a result of increased nicotine addiction and / or smoking in young people and adult non-smokers due to continued marketing and promotion of a product that promotes nicotine addiction and mimics smoking behaviour. This could lead to an increase in health costs, resulting in decreased work related productivity. An ASH survey from 2014^[69] estimated that there were 2.1 million adults in Great Britain using e-cigarettes. An estimate based on population share would be that 180,600 adults in Scotland use e-cigarettes. Scottish Health Survey data will be available in September 2015 on e-cigarette prevalence across the general population and will provide additional evidence for estimating and tracking use by young people.

Option 2: This option could lead to a loss of revenue for manufacturers, retailers and advertising businesses as they would not be able to use domestic advertising to give product information and / or to increase their customer base. This could be of particular importance for retailers selling only or mainly e-cigarettes and related products. It is difficult to quantify the impact on the retail sector as we do not have data on the number of retailers currently operating in this market in Scotland. It is expected that data on sales of e-cigarettes in Scotland will become available in October 2014. NHS Health Scotland are analysing a dataset purchased by the Scottish Government from Neilsen. ASH Scotland reported that sales of e-cigarettes rose from £2.5m to £23.9m in 2012^[70]. A report for Public Health England published in May 2014, summarised evidence for the UK market.^[71]

The consultation will allow businesses retailing e-cigarettes to provide the Scottish Government with information and data which can be taken into consideration when preparing the final Business and Regulatory Impact Assessment.

This option will result in associated enforcement costs to government and local government. In line with government guidance it is assumed that any reduction in consumer expenditure on e-cigarettes would be offset by an increase in expenditure elsewhere in the economy with broadly similar macroeconomic effects. There could be indirect health costs for government and society if people who wish to stop smoking and would have chosen e-cigarettes fail to do so as a result of having less access to information because of restricted advertising. The ASH survey found that over 50% of the e-cigarette users in Great Britain were ex-smokers. It also found that 15% of attempts to stop smoking in the past year have involved e-cigarettes in England. The Scottish Household Survey (2013) reports that the adult smoking rate in Scotland is 23.1%. There remains considerable potential for smoking cessation. It is not currently possible to quantify how many smokers might be influenced to move from tobacco to e-cigarettes as result of advertising.

Option 3: This option could lead to a loss of revenue for businesses from a reduced customer base through reduced advertising. There could also be costs relating to familiarisation with the legislation and to what it might apply. It is not possible to quantify this as there is no data available on the e-cigarette retail sector. It is expected that data on sales of e-cigarettes in Scotland will become available in October 2014 as NHS Health Scotland commissioned data evidence gathering. ASH Scotland reported that sales of e-cigarettes rose from £2.5m to £23.9m in 2012^[72].

The consultation will allow businesses retailing e- cigarettes to provide the Scottish Government with information and data which can be taken into consideration when preparing the final Business and Regulatory Impact Assessment.

Option 3: This option will result in associated enforcement costs to government and local government. In line with government guidance it is assumed that any reduction in consumer expenditure on e-cigarettes would be offset by an increase in expenditure elsewhere in the economy with broadly similar macroeconomic effects.

Proposal 4 - Registration requirements to retail e-cigarettes

Options

Option 1 - Do nothing.

Option 2 - Establish a statutory requirement for e-cigarette retailers to register on the Scottish Tobacco Retailers Register.

Sectors and groups affected

Businesses that retail e-cigarettes, government and local government.

Benefits

Option 1: This option would benefit businesses as they would not be required to undertake the administration associated with the requirement to register, nor would any businesses that aren't already on the Register for tobacco purposes, have to familiarise themselves with the legislation.

Option 2: This option would benefit businesses as their inclusion on the Register will identify them as a legitimate retailer of the product, demonstrating that they are responsible retailers. This would also support the reduction of illegal trade of e-cigarettes and therefore the risk of loss to legitimate traders.

Option 2: this option will benefit government and enforcement agencies as it will support the sale of legitimate products and strengthen the enforcement of proposals 1, 3 and 9. Improving safety and strengthening enforcement will provide health and work related productivity benefits.

Costs

Option 1: This option would result in costs to Government and local government as it would be more difficult to identify retailers of legitimate products to support and enforce compliance with regulations around the sale of e-cigarettes. Non-compliance could result in health and productivity costs derived from more young people potentially becoming addicted to nicotine and ineffective monitoring of product safety.

This option will result in a small cost to businesses in undertaking the administrative requirements to register and familiarising themselves with the legislation. Any retailers who already tobacco will already be registered on the Scottish Tobacco Retailers Register in compliance with the Tobacco and Primary Medical Services (Scotland) Act 2010. As of September 2014, there were 9,803 retail premises on the Register. For these retailers there would be a very small administrative cost involved to update their details if they sell e-cigarettes. We do not have data on the number of retailers who sell e-cigarettes but don't sell tobacco.

The consultation will allow businesses retailing e- cigarettes to provide the Scottish Government with information and data which can be taken into consideration when preparing the final Business and Regulatory Impact Assessment.

There will be a small cost to government in amending the existing Register to include e-cigarettes and in raising awareness about this requirement. There would be some costs to enforcement agencies associated with facilitating registration, providing support to business and enforcing the legislation. In 2013-2014 there were 9 Fixed Penalty Notices issued for carrying on a tobacco retail business whilst unregistered^[73].

Proposal 5 - Smoking in cars in the presence of a child or young person under the age of 18

Option 1 - Do nothing

Option 2 - Introduce an offence for adults to smoke in a vehicle in the presence of a child or young person under the age of 18

Sectors and groups affected

Government and society, especially adults who smoke and children and young people under the age of 18.

Benefits

Option 1: This option provides no benefits to government, society or business. Smokers will retain the ability to smoke in cars.

Option 2: This option will reduce the number of children and young people exposed to second-hand smoke in cars and the risk of associated illness. There are over a million young people in Scotland under the age of 18. The Scottish Household Survey (2013) reports that the adult smoking rate in Scotland is still 23.1%. So there remains the potential for a substantial number of children and young people to be exposed to second-hand smoke.

There could be benefits to adult smokers if they smoke less as a result of this measure. A change in culture could also lead to voluntary behaviour change to limit smoking in the home around children. In 2012 the Scottish Health Survey^[74] reported that 12% of children and young people under the age of 16 said they were exposed to second-hand smoke in the home. There could be a reduction in the number of children who go on to smoke tobacco due to a reduction in exposure to smoking behaviours. There could be additional benefits to government from the collection of fines as an extra revenue source.

Costs

Option 1: This option would result in costs to Government and society from second-hand smoke related illness suffered by children and young people and associated treatment. It is possible that in later life this could result in a reduction in work related activity due to ill health.

Option 2: This option will result in costs associated with enforcement and to individuals who don't comply with the law through payment of fines. We anticipate costs will be minimal as enforcement of this policy is likely to be an extension of existing arrangements.

There could be costs to individuals from a reduction in utility by being prevented from smoking in cars. There is already smoke-free legislation covering vehicles used for business purposes. These include light and heavy goods vehicles, and public transport such as taxis, buses, trains and ferries, but exclude cars (private or company-owned). It is possible, therefore, that some businesses could be required to comply with the legislation if they transport children. There could be costs associated with familiarisation with the legislation and implementation of smoke-free policies.

Proposal 6 - Introduction of national legislation for smoke-free NHS grounds

Options

Option 1 - Do nothing.

Option 2 - Introduce legislation to make it an offence to smoke in health grounds

Option 3 - introduce further voluntary measures to assist with enforcement of voluntary policies already implemented by NHS Boards.

Sectors and groups affected

NHS Boards - premises, staff, patients and visitors, government, people who smoke.

Benefits

Option 1: This option provides no further benefits to local authorities, government or society over and above the policies already adopted by NHS Boards.

Option 2: This option will support compliance with, and enforcement of, existing NHS Board policies. The Scottish Household Survey (2013) reports that the adult smoking rate in Scotland is still 23.1%. It will provide a consistent approach across Scotland and supports the vision, aims and objectives set out in Scottish Government's Tobacco Control Strategy to reduced tobacco consumption and related harm. Option 2 would also result in less tobacco related litter within NHS grounds.

Option 3. Detailed proposals for this option will only be formulated following analysis of the consultation responses.

Costs

Option 1: This option will result in continued costs to NHS Boards to clear up tobacco related litter.

Option 2: This option could result in costs for additional signage, if it is required, over and above existing signage already in place across NHS grounds. We do not anticipate that enforcement costs to the NHS would be significant for those Boards who already implement voluntary smoke-free policies. There would be costs for enforcement agencies. There will be costs to Government associated with awareness raising. There could be costs to individuals (patients, visitors and staff) from a reduction in utility by being prevented from smoking in the grounds of NHS premises. We do not anticipate any direct or indirect costs to business.

Option 3: Detailed proposals for this option will only be formulated following analysis of the consultation responses.

Proposal 7 - Children and Families Smoke-free outdoor areas

Options

Option 1 - Do nothing. It will remain possible, as occurs at present, for there to be voluntary measures to reduce children's exposure to smoking behaviour and tobacco related litter.

Option 2 - Introduce legislation to make designated outdoor areas smoke-free to reduce children's exposure to smoking behaviours and tobacco related litter.

Sectors and groups affected

Local Authorities, Government, society, people who smoke.

Benefits

Option 1: This option provides no benefits to local authorities, government or society.

Option 2: This option provides benefits to society and government by reinforcing the message that smoking around children is unacceptable, resulting in children and young people being exposed to less smoking behaviour. There are over a million young people in Scotland under the age of 18. This proposal could lead to fewer children who go on to smoke and therefore result in fewer smoking related diseases. A change in culture could lead to increased quit attempts in adults resulting in fewer smoking related diseases. There could be savings to Local Authorities in clearing up smoking related litter. This option would support Local Authorities who have already implemented smoke-free outdoor areas on a voluntary basis.

Costs

Option 1: This option could lead to indirect costs to government and society resulting from not implementing measures that would otherwise have reduced smoking related illness and exposure to second-hand smoke, the resulting treatment costs to the NHS and loss in work related productivity.

Option 2: This option would result in costs to government and local government associated with enforcement, signage and awareness raising. There would be an indirect reduction in costs to society and government from a reduction in uptake of smoking and culture change resulting in increased quit attempts. Any reduction in smoking prevalence could result in a fall in tobacco related revenue for retailers. In line with government guidance it is assumed that any reduction in consumer expenditure on tobacco would be offset by an increase in expenditure elsewhere in the economy with broadly similar macroeconomic effects.

Proposal 8 - Age verification policy for tobacco and e-cigarettes

Options

Option 1 - Do nothing.

Option 2 - Create an age verification policy (require proof of age for sales to anyone who appears under age 25) for tobacco products and e-cigarettes akin to alcohol licensing legislation.

Sectors and groups affected

Young adults, businesses, including, Small Medium Enterprises, micro businesses, big retailers and specialist high street retailers, government and society will be affected.

Benefits

Option 1: This option provides no benefits.

Option 2: This option will support businesses and staff to ensure compliance with age restriction legislation by providing a consistent recognisable policy for requiring ID across all retailers. It would also provide a more consistent approach across alcohol, tobacco and e-cigarettes. By increasing compliance with age-restriction legislation, this option will help reduce access to tobacco and e-cigarettes. This could contribute to a reduction in the number of young people who take up smoking and therefore smoking related illness. This option also supports proposal 1 and the benefits associated with that proposal.

The ASH survey of 2014 identified 2% of young people (11-18) as weekly or monthly users of e-cigarettes. Applying this to the Scottish population suggests around 8,000 young people could currently be possible customers, even if only occasionally. This would make it even less likely that these young people could continue to access e-cigarettes from retailers.

Costs

Option 1: This option will not result in any direct costs to businesses or Government. There could be limited indirect health costs associated with illness as a result of children and young people accessing, and consuming, tobacco or e-cigarettes. The ASH survey of 2014 identified 2% of young people (11-18) as weekly or monthly users of e-cigarettes. Applying this to the Scottish population suggests around 8,000 young people could currently be possible customers, even if only occasionally. This could lead to a reduction in work related productivity later in life if serious illness develops.

Option 2: This option will result in small direct costs to business in terms of staff training and customer awareness. This is already a requirement in statute for certain alcohol sales and some businesses already apply this policy voluntarily to the sale of tobacco. We therefore consider that this will have a very small impact on businesses but in the absence of data on the e-cigarette retail market, it is not possible to quantify this.

The consultation will allow businesses retailing e-cigarettes to provide the Scottish Government with information and data which can be taken into consideration when preparing the final Business and Regulatory Impact Assessment.

There will be small direct costs to Government and enforcement agencies associated with raising awareness of and enforcing of this measure.

Proposal 9 - Unauthorised sale of tobacco and e-cigarettes by a young person under the age of 18

Options

Option 1 - Do nothing

Option 2 - Prohibit young people under the age of 18 from selling tobacco products and e-cigarettes unless they are authorised by someone over the age of 18.

Sectors and groups affected

Young people under the age of 18, businesses, including, Small Medium Enterprises, micro businesses, big retailers and specialist high street retailers, government and society will be affected

Benefits

Option 1: This option would benefit businesses which are run by people under the age of 18, or employ under 18 year olds without supervision, as they would not be required to take additional action. There are no benefits to government or society resulting from option 1.

Option 2: This option could benefit businesses by providing more consistency with the retail of tobacco, e-cigarettes and alcohol. This legislative requirement is already in place for the sale of alcohol. This would support businesses and individual staff to comply with the requirement to ensure someone attempting to purchase tobacco or e-cigarettes are over 18. In particular, it will encourage appropriate training and support for staff to refuse a sale or challenge a customer who might be close to them in age or older.

Costs

Option 1 would result in no direct costs to government or businesses.

Option 2 could result in direct costs for businesses associated with familiarisation with the new legislation and training of staff. Although, premises licences for alcohol are already required by law to have such a policy in place. There are currently 9,803 businesses on the tobacco register which will be affected by this proposal. We do not have data on the number of premises that retail e-cigarettes.

There will be a small direct cost to government and enforcement agencies associated with raising awareness and enforcement. This is difficult to quantify in the absence of data on the number of retail outlets for e-cigarettes.

The consultation will allow businesses retailing e- cigarettes to provide the Scottish Government with information and data which can be taken into consideration when preparing the final Business and Regulatory Impact Assessment.

Scottish Firms Impact Test

We will seek to meet with key stakeholders and business throughout the consultation period to better understand impacts on and to inform the development of the policy proposals and final Business and Regulatory Impact Assessment.

Competition Assessment

We do not anticipate that any of these proposals disproportionately impact any supplier but will seek further information on this issue as part of the consultation.

Test run of business forms

We do not anticipate that the proposals will result in any new business forms. However, should any new forms come out of these proposals then we will fully test with business to ensure that they are simple and easy to use.

Legal Aid Impact Test

The proposals suggest introduction of a number of new offences some of which could be incurred by members of the public. We know from tobacco legislation already in place that the majority of these offences are dealt with as fines from enforcement officers (currently Environmental Health Officers). However, an individual can refuse to pay a fine and which could result in the case being referred for prosecution.

Some of the proposals suggest the introduction of a number of offences for which businesses would be liable for. We know from tobacco legislation already in place that the majority of these offences are dealt with as fines from enforcement officers (currently Environmental Health and Trading Standards Officers). However, a Business can refuse to pay a fine which could result in the case being referred for prosecution.

No final decision has been made as to who will be responsible for the enforcement of the proposed measures. However, we do not envisage the creation of new procedure or right of appeal.

Enforcement, sanctions and monitoring

This section will be completed post consultation at final Business and Regulatory Impact Assessment stage.

Implementation and delivery plan

This section will be completed post consultation at final Business and Regulatory Impact Assessment stage.

Summary and recommendation

This section will be completed post consultation at final Business and Regulatory Impact Assessment stage.

Declaration and publication

I have read the Business and Regulatory Impact Assessment and I am satisfied that, given the available evidence, it represents a reasonable view of the likely costs, benefits and impact of the leading options. I am satisfied that business impact will be assessed with the support of businesses in Scotland.

Signed:

Date: 10^th October 2014

Michael Matheson
Minister for Public Health

Scottish Government Contact point: Tobaccocontrolteam@scotland.gsi.gov.uk; 0131 244, 4387