Time for a ‘polluter pays’ levy on tobacco firms, says APPG

The government should introduce an immediate windfall tax on tobacco companies along with an additional ‘polluter pays’ levy, says the All Party Parliamentary Group (APPG) on Smoking and Health. The additional levy would work to limit their profits to the average 10 per cent margin for businesses.

The windfall tax could raise £74m a year and the levy ten times that, says the APPG, which could help pay for the ‘shortfall in funding for tobacco control and public health’. Reducing smoking rates would also help to ease the annual £17bn cost to the NHS, social care and the UK economy, it says, as well as help families during the cost-of-living crisis. The average smoker pays around £2,000 a year ‘to fund an addiction which for most starts in childhood’, it states, with lung cancer now the cause of one in five of all UK cancer deaths.

‘Banks and energy companies have been made subject to windfall taxes, so why not the tobacco manufacturers, who make eye wateringly high profits from products which kill two out of three lifelong customers?’ said APPG chair Bob Blackman MP. ‘Four manufacturers –BAT, Imperial, JTI and PMI –  are responsible for over 95 per cent of UK tobacco sales. A windfall tax could be implemented immediately to raise £74m, but tobacco companies are very good at minimising their tax liabilities. That’s why we’re calling on the chancellor to back this up with a ‘polluter pays’ levy, which by limiting Big Tobacco’s profits to the 10 per cent average for business could raise hundreds of millions a year.’

The APPG is making the call in advance of the government’s Autumn statement on 17 November, with more than 75 per cent of adults saying they would support a levy on tobacco manufacturers. While tobacco excise taxes raise around £10bn a year, this money ‘doesn’t come from the tobacco industry but from the pockets of smokers,’ said APPG vice chair Alex Cunningham MP. ‘The funding to help smokers quit is measured in millions not billions, and has been cut by a third since 2015. We call on the chancellor to announce in the Autumn statement that he’s going to make Big Tobacco pay to help smokers quit.’

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