Dáil Éireann debate -
Wednesday, 2 Dec 1998

Vol. 497 No. 6

Financial Resolution No. 2: Tobacco Products.

The Taoiseach:

I move Financial Resolution No. 2:

(1) THAT in this Resolution—

"the Act of 1977" means the Finance (Excise Duty on Tobacco Products) Act, 1977 (No. 32 of 1977);

"cigarettes", "cigars", "fine-cut tobacco for the rolling of cigarettes" and "smoking tobacco" have the same meanings as they have in the Act of 1977 as amended by section 86 of the Finance Act, 1997 (No. 22 of 1997).

(2) THAT the duty of excise on tobacco products imposed by section 2 of the Act of 1977 shall, in lieu of the several rates specified in Schedule 7 to the Finance Act, 1998 (No. 3 of 1998), be charged, levied and paid, as on and from the 3rd day of December, 1998, at the several rates specified in the Schedule to this Resolution.

(3) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1927 (No. 7 of 1927).

Schedule

Rates of Excise Duty on Tobacco Products

Description of Product	Rate of Duty
Cigarettes	£66.76 per thousand together with an amount equal to 17.45 per cent. of the price at which the cigarettes are sold by retail
Cigars	£101.334 per kilogram
Fine-cut tobacco for the rolling of cigarettes	£85.511 per kilogram
Other smoking tobacco	£70.302 per kilogram

This resolution provides for excise duty increases on tobacco products from midnight tonight, which when VAT is included, amount to 5p on a packet of 20 cigarettes with pro-rata increases on other tobacco products. This increase is expected to yield £0.91 million in 1998 and £13.2 million in a full year. As the House will be aware, cigarettes have a significant weighting on the consumer price index and this increase is expected to increase the CPI by an estimated .077 per cent. It is expected that the increase of 5p will reduce projected cigarette consumption by 0.43 per cent compared to what it would otherwise have been. The Government remains very concerned about smoking and its impact on health. This increase may help discourage smoking, particularly by younger people.

Mr. J. Bruton:

Why is there such a small increase given that this product is far more damaging to people's health than a number of drugs distributed by people gardaí spend a great deal of time seeking to detect? We face a serious choice in our society. It is possible, through the tax system, to discourage activities which are not socially beneficial. It is certainly the case that cigarette smoking is not socially beneficial. The Government has similarly dodged the issue as far as global warming is concerned, where they have backed off any significant measures to discourage activities which cause Ireland to breach its limits under the Kyoto Accord. Here we have another example in the case of cigarettes where the Government is putting popularity in the short-term against the better long-term interests of the country.

Mr. O'Shea:

The Labour Party will not oppose this Financial Resolution. However, we see the 5p increase as somewhat niggardly in the context of the real objective. It is not a Revenue measure per se— it should be a health measure. Given that some 6,000 people die in this country every year from smoking induced ailments, whether they are cardiovascular or respiratory, the Minister should have done something more substantial. I did smoke but I learned the folly of my ways.

Mr. Howlin:

The zeal of the convert.

Dr. Woods:

It is Deputy Stagg we are worried about.

Mr. O'Shea:

We are working on the Whip. Against the background of the health problems related to smoking, the fact that so many young people continue to take up the habit, particularly young girls, putting 5p on 20 cigarettes will not make any difference to the number of new smokers. A more imaginative approach should be taken in next year's budget. The Whip is now suggesting it should be as much as £2 per packet next year. I do not think that is necessary, but a substantial amount would act as a deterrent to young people taking up smoking.

Mr. Shatter:

I can remember a time in this House when on budget night all the Opposition parties, no matter which party was in Government, automatically voted against the increase in tobacco products. It is a sign of the times that this side of the House will not vote against this increase. However, it is a derisory gesture. Tobacco products are addictive. They are poisoning thousands of teenage children across the length and breadth of this country and are setting the seal for a large number of people suffering serious cardiac illnesses and cancer. We have 6,500 deaths a year from smoking related illnesses. This Government has no policy to deal with tobacco sales. It has no commitment towards preventing and discouraging our young people from becoming tobacco addicted before they reach their adult years, despite the fact the law prohibits the sale of tobacco products to people under 18 years.

At a time when other countries, particularly the United States, are forcing tobacco companies into multi-billion pound settlements to compensate for the damage they have done over decades to the health of the young and old, this Government is sitting around thinking about the issue, doing nothing. It is a disgrace. Now we know, without a shadow of doubt, the impact of tobacco and its addictive nature as a drug, this House and the Government has a duty to take far more radical action than it is taking to date.

I am a member of the health committee which has had hearings attended by a number of the tobacco companies based in this State. They have treated members of the committee with nothing short of contempt by constantly denying the true health impact of their tobacco products and pretending to be unaware of the irrefutable scientific evidence of the dangers posed by their products to every member of the population in this State who smokes. It might be too late to prevent some adults addicted to tobacco from smoking. All we can do is discourage them. However, we can have a policy to prevent our young people becoming addicted. This Government has no policy.

Mr. Power:

If one considers tobacco price increases in previous budgets, Governments always say they are concerned about the health of the nation. It is a difficult balance to strike as many people including old people are addicted to cigarettes and tobacCo. For some people, it is their little pleasure. I am glad the increase announced today is not as severe as some of the Deputies here would want it to be.

I acknowledge and welcome the contributions the Opposition has made to this debate. It is nice to see change taking place in the House. If we are serious about the health of the nation, we must quickly introduce a ban on tobacco advertising. Millions of pounds are spent on sexy advertisements to recruit young people, because their older customers are dying. It is as simple as that. We must treat this matter seriously.

Mr. Higgins

(Dublin West): I am opposed to this resolution, particularly because of the cynicism of the Government in using the cover of the health of our people to put it forward. That is not the motivation of the Government. It is only a revenue raising measure. Raising the price of cigarettes by 5p per packet will not protect the health of the nation. Unfortunately, the acutely high price of heroin has not protected thousands of our youth over the past 15 years from addiction.

Nicotine is a dangerous and addictive drug. Smoking is a despicable habit. In case I am accused of hypocrisy, I should say that I would smoke a cigar maybe three times a year.

Mr. Creed:

A Havana.

Mr. J. Bruton:

Champagne, I am sure, would go along with that.

Mr. Higgins

(Dublin West): I must make that admission although I would not smoke in company or in an enclosed room but out in the air where I do not contribute to poisoning other people.

In practical terms this increase will hit the pockets of working class people and particularly unemployed people and poor people. Unfortunately, the reality of life under the present system is that because of the stresses and strains of life many of our people, particularly those who are struggling on the margin, turn to smoking among things for relief, albeit a false relief, which is widely available to poor people. The more expensive pleasures are not widely available to poor people.

If the Taoiseach was serious about directing the attention of the Government towards the health of our people, he would propose, for example, a modest 100 per cent VAT on cigarette advertising on glossy magazines, billboards, etc. or he would ban it. Why has the Government not banned cigarette advertising rather than put forward this pathetic and lame excuse of a contribution towards the health of our people? I hope the next Government spokesperson will address this issue.

Thousands of people are seriously ill as a result of becoming addicted to nicotine. They need to take up valuable health care time because of the acute diseases which arise from addiction to nicotine. Unfortunately, thousands die painfully from this addiction. If the Government was serious, it would introduce a real policy and not insult the people with the glib argument that this increase is in the interest of the health of our people.

I am not in favour of prohibitionism. It does not work on most fronts. However, I am in favour of an imaginative and even aggressive campaign against nicotine, directing people away from this drug through education and a change in lifestyle.

If the main political parties — I include Fine Gael in this — were really interested in the health of our people and the threat posed by nicotine addiction, they would be in favour of the type of radical changes which would change life for so many of our people so that they could move away from poverty, deprivation, pressure of all kinds, bad housing and agonising and suffering on the housing lists. In moving away from these problems, many of the pressures which lead to nicotine addiction and other addictions would be overcome. Then I would be convinced about their seriousness.

If the Government wanted to raise this £13 million in revenue, instead of coming back to mainly working class and poor people I suggest they could have saved the £9 million in 1999 as a result of the cut in corporation tax, the £125 million in the year 2000 and the £132 million in a full year. If they had left the corporations and the super rich paying taxation at that level which is already modest instead of giving them these savings, then perhaps we could direct more resources towards the health of our people and towards eliminating the causes of ill health including nicotine addiction.

Mr. Allen:

I was about to leave when I heard the Taoiseach state that this resolution was an anti-drug proposal. I have not heard so much hypocrisy in quite a long time. It was being proposed to encourage people not to smoke, as an anti-drug proposal, because alcohol, nicotine and drugs are all inter-related. When I heard the Taoiseach saying this and I contrast it with the attitudes of some of his Ministers to other proposals on drug prevention, it sticks in the craw.

Today the Minister announced a drug prevention allocation of £500,000 for one project which has been left waiting for a year and a half while costs were escalating, that is the North-West Ridge Project on which the Taoiseach cut a sod recently. They were left waiting.

Deputy McDaid allowed £5 million of the drug initiative money to be diverted into other activities.

Question, "That Financial Resolution No. 2 be agreed to", put and declared carried.