Putting up the tax on cigarettes is an irresistible piece of virtue-signalling for a Chancellor of the Exchequer. But what happens increasingly is that generally law abiding people switch from smoking cigarettes they have bought legally at full price to using the thriving market for illicit cigarettes. Instead of paying around £10 for a pack of 20 they find the cost is around £4 or £5. Plain packaging has doubtless boosted the smuggling.
Often it is normal cigarettes being sold – perhaps provided to shopkeepers by gangs with people going back and forth to Poland on cheap flights bringing in all they can carry. But even worse are the counterfeit cigarettes. Nick de Bois, the former Conservative MP for Enfield North, was brave enough to oppose plain packaging for this reason. In his memoirs, Confessions of a Recovering MP, he says:
“What’s more, reported data was all very well, but I wanted to see things for myself. ‘So, how widespread is the selling of fake cigarettes, and how do they sell them, and to whom?’ ‘Well, for example, 114 million counterfeit cigarettes were sold across south London last year,’ claimed a tobacco company representative with whom I was speaking. ‘Seriously? Who says so?’ ‘The councils of Southwark, Bexley, Bromley, Greenwich and Lewisham.’ ‘Not you, then?’ ‘No. And there is more data from more councils.’ ‘Jeez. And why is it so dangerous, as you claim?’ ‘Because counterfeit cigarettes are more toxic than ordinary cigarettes. More tar, more arsenic, more lead, more nicotine.’ Eww… arsenic? I was recalling all the cigarettes I had smoked between the ages of fifteen and thirty-five, and feeling quite ill. Yes, arsenic is in the legitimate fags as well.”
HMRC estimates that 15 per cent of cigarettes and 28 per cent of hand-rolling tobacco is bought illicitly in this country. That is probably a conservative estimate. The report that de Bois referred to included a survey of south London smokers in which 40 per cent of them admitted buying illicit tobacco in the past year. The report added:
“Criminal gangs are very heavily involved in the illicit tobacco trade and the majority of the illicit cigarettes sold are counterfeits manufactured outside the EU specifically to be smuggled into the UK in bulk. One sea container full of counterfeit cigarettes can generate well over a million pounds in profit for a gang.”
De Bois suggests this simple test:
“Next time you are outside a café, pick up the packets of empty cigarettes on the floor and you will find that a high proportion are likely counterfeit. Of those that are genuine, more will be non-tax-paid brands.”
This lucrative opportunity allows the criminal network to grow – resulting in an increase in other crimes. The risk of selling cigarettes to those under-age is obviously greater. After all the law is being broken anyway… Another problem is the safety standards of cigarettes smuggled in from some countries. Those sold legally in the EU are self-extinguishing. But those from some other countries are not – which can result in fatal consequences to those who fall asleep while smoking.
What can local councils do about this all this?
For a start – as I have written before – they should work with the tobacco industry in sharing intelligence to defeat the counterfeiters. It would also be useful if the Government instructed HMRC to work with both the local government and the industry. Councils should also do more work with their trading standards teams. Prosecutions against shops selling tobacco illegally are time consuming and it is difficult to achieve as the measure is “beyond reasonable doubt”. But another sanction is for traders to have their alcohol licences revoked following seizure of illegal tobacco products – as it breaches the licensing terms and conditions. If the shopkeeper attempts to have this overturned by a magistrate the decision is on the balance of probabilities.
However many councils in London are doing nothing. Some FOI requests I have put in confirmed this. I asked “the number of illegally sold cigarettes that have been seized by your Trading Standards Department in the last 12 months.” Enfield Council responded:
“None – the last Operation we carried out was on 6th December 2016.”
The response from Hounslow was:
“No illegally sold cigarettes have been seized since November 2016.”
Waltham Forest, Bromley, Richmond, Barnet and Wandsworth also responded that there have been nil seizures.
Where seizures have taken place the numbers are tiny relative to scale of the challenge. In my council of Hammersmith and Fulham only 11,800 cigarettes (590 packs) have been seized in the past year and one licence revoked as a result.
Merton saw even fewer cigarettes seized – only 5,160 cigarettes – “one premises licence where the sale of illegal cigarettes was one of a number of concerns that resulted in revocation.” Camden saw 25,795 cigarettes seized and “two revocations in the last 12 months for sale of illegal cigarettes.”
Some councils that seized cigarettes didn’t revoke any licenses as a result. These include: Redbridge (1,520 cigarettes seized); Greenwich (15,590 cigarettes seized);Brent (24,710 cigarettes); Kingston (200 cigarettes); and Barking and Dagenham (31,440 packs seized although while they did not revoke any licenses they did prosecute two retailers). In Tower Hamlets the seizure figures were “46,320 cigarettes, 8677.5g HRT, 1089 tins of chewing tobacco” followed by nine prosecutions.
There are probably around two million smokers living in London – with millions more coming to visit each day. That means millions of cigarettes sold illegally in the capital every day. So we have an epic fail by trading standards. I am usually sceptical of the complaint of “lack of resources” but it must be accepted in this case to have some validity. If there are only two or three trading standards officers there is a limit to what they can achieve. Often they rely on volunteers to be test purchasers. Yet a council that provides a total budget for its trading standards department of £200,000 or £300,000 will also have a public health budget of over £20 million – wasting money among other things on nannying and ineffective anti-smoking campaigns. Redirecting funds from the public health budget to trading standards would make sense.
Successive Chancellors of the Exchequer have stacked the odds heavily in favour of the smugglers and counterfeiters. That makes the task for local authorities of preventing illicit tobacco sales massive. It might be an impossible battle to win given the current levels of tax. But they could at least put up a fight.