Contribution
My Lords, my Amendment 194, on a tobacco industry levy and new industry obligations, offers a vital and practical mechanism to make the Bill stronger, fairer and more effective in public health and social justice terms. I am sure there is not a Member present whose family has not been impacted by nicotine addiction, and my family is no exception. The Bill presents an important opportunity to redress the balance between corporate profits gained from selling products that by their very nature kill two-thirds of their users and the burdens placed on wider society that are felt by our health and care systems. Other amendments in this group are based on similar ways of addressing these wider problems and I welcome them. These are problems that, if not addressed, will persist long after the Bill is passed.
My amendment would quite simply make those who profit from harm contribute directly towards repairing it. The tobacco industry continues to generate vast profits from the products it sells and it has huge economic and human suffering costs. I acknowledge that accurate statistical data in these areas is complex, but it has been estimated that the four largest tobacco manufacturers made approximately £900 million in profits annually in the UK, according to one 2023 estimate. I well recognise that tobacco duties are a significant source of government revenue, raising an estimated £8.1 billion in 2025-26, which represents 0.7% of all government receipts and is equivalent to 0.3% of national income. However, this revenue goes towards general taxation.
The health impacts of smoking and nicotine are estimated to cost the UK economy billions of pounds annually, with estimates for England alone reaching up to £43.7 billion if the total societal costs are included and some £2.5 billion in direct service costs for the NHS. These figures are significant and productivity loss and health impacts have big societal impacts. My amendment would require the Secretary of State to introduce by regulation a levy on companies’ profits derived from income from the manufacture or sale of tobacco products in the United Kingdom. The levy would apply annually and would be based on profits attributable to tobacco sales here. The funds raised would be paid to a dedicated ring-fenced account held by the Department of Health and Social Care. As has already been mentioned by the noble Lord, every penny collected would be used solely for the purposes of either smoking cessation services, public health campaigns focused on reducing tobacco harm or healthcare services to treat people living with smoking-related diseases.
It is worth stressing what this amendment would not do. It would not set the rate or the structure of the levy. I have left these details entirely for the Government to determine. The measure is not prescriptive; it would simply establish the legislative framework and would allow Ministers to design and introduce a fair and proportionate levy. It would give the Government flexibility to decide, for example, whether the levy should be assessed by company profits, by market share or by a combination of the two approaches. It would equally be left to the Treasury to investigate and decide, with Ministers, the best way to implement it. The principle of the amendment is the important point, and it is clear. The principle is that the tobacco companies, and not the general taxpayer, should contribute directly the greatest proportion of the cost of the harm that their products cause. It would align, as has been said on other amendments today, with the “polluter pays” model, which is endorsed by health experts across the field. The estimate is that £700 million could be generated annually to help transform smoking cessation services and public awareness campaigns, services that have been hit by cuts.
Although the level of smoking is reducing, some 13% of the UK population still smokes. This has significant impacts. For example, Imperial tobacco holds 40% of the UK market; that market is worth £30 billion annually. Meanwhile, on the other side, the NHS and the Treasury have to deal with the societal consequences of what tobacco does.