Scotland's Future is Smoke Free: A Smoking Prevention Action Plan

CHAPTER 6
REDUCING THE AFFORDABILITY OF TOBACCO PRODUCTS

"Price increases have been a highly successful way of helping people to become non-smokers: UK budget changes to tobacco duty have saved lives and prevented much serious illness."HM Revenue and Customs

Current activity

6.1 There is strong evidence that tobacco taxation is a particularly effective way of reducing tobacco consumption among young people. It also suggests that cheaper smuggled tobacco products undermine the impact of pricing and sales control. Fiscal policy matters such as these are reserved to Westminster, and the SPWG report notes that since 2000:

• The rise in duties has varied over the years but has been kept broadly in line with inflation. In the 2008 Budget duty was raised in line with inflation putting 11p on the price of a packet of 20 cigarettes.
• As indicated at paragraph 5.1, the UK Government has been implementing a package of measures designed to curb smuggling, including the deployment of 1,000 additional Customs officers; additional specialist investigators and intelligence staff; additional x-ray scanners; tougher sanctions and penalties; and a public awareness campaign. In addition cigarette packets and hand-rolling tobacco sold for consumption in the UK are now required to carry a duty paid mark.

Future direction

6.2 The price of tobacco products is one of the most important factors in determining consumption and, thus, taxation policy is one of the main tools for preventing nicotine addiction. As indicated above the availability of much cheaper smuggled tobacco products - both cigarettes and loose tobacco - sold from vans, at open-air markets and by other means across the UK, undermines fiscal policies aimed at reducing tobacco consumption. Key points we have borne in mind:

• The UK has the highest priced cigarettes in the EU. In the Cancer Reform Strategy ¹¹ for England and Wales which was published on 19 November, the UK Government pledged to continue to follow a policy of using tax to maintain the high price of tobacco at levels that impact on smoking prevalence.
• Young people may be up to three to four times more price sensitive than older adults. This is borne out by a systematic review among 13 to 24 year olds which concluded that price affected both the number of young smokers and the amount of tobacco consumed.
• The World Bank has calculated that a 10% increase in the price of cigarettes on average reduces demand by 4% in high-income countries such as the UK. The effect of a 10% price increase would be to reduce consumption in the UK by about 3 billion cigarettes per year.
• Although there is a lack of empirical evidence about the effectiveness of banning the sale of packets of less than 20 cigarettes on young people's smoking prevalence, there is growing concern, including among the World Health Organisation, about the relationship between packets of 10 cigarettes or "kiddie packs" and tobacco consumption among young people. Recent research from the Republic of Ireland indicates that 75% of smokers under 17 buy packs of 10.
• Tobacco smuggling constitutes a serious public health risk by undermining initiatives aimed at reducing tobacco consumption. As smuggled tobacco is most likely to be sold in deprived areas and increasingly to target children, smuggling would appear to have a disproportionate impact on smoking behaviour by young people in these areas and be a factor in perpetuating health inequalities.
• The announcement made by the UK Government in the 2008 budget that tackling tobacco smuggling would be a major priority for the newly-established UK Borders Agency.

Actions

Against this background the Scottish Government proposes:

19. To keep the pressure on the UK Government to ensure duty on tobacco products is sufficiently high to keep prices in line with the cost of living.
Delivery lead: Scottish Government. Timescale: Ongoing

20. To collaborate with Her Majesty's Revenue and Customs to reduce the impact of illicit sales of tobacco products on Scottish communities with action linked to better enforcement of tobacco sales law as per Action 15.
Delivery lead: Scottish Government. Timescale: Ongoing

21. To consider issues arising from the sale of cigarettes in packets of less than 20, as part of the planned legislative review proposed at Action 16.
Delivery lead: Scottish Government. Timescale: As per Action 16