I apologise for my late arrival, but I did not realise that I would be called to speak so soon. I spoke last night about the clear evidence that the cost of cigarettes is a factor in reducing the level of cigarette smoking in this country, a point that was recently reinforced by Dr. Luke Clancy. I referred to the World Bank Group's report, the Economics of Tobacco Control, which states:
Scores of studies have shown that increased taxes reduce the number of smokers and the number of smoking-related deaths. Price increases induce some smokers to quit and prevent others from becoming regular or persistent smokers. They also reduce the number of ex-smokers returning to cigarettes and reduce consumption among continuing smokers. Children and adolescents are more responsive to changes in the price of consumer goods than adults, that is, if the price goes up, they are more likely to reduce their consumption. This intervention would therefore have a big impact on them. Similarly, people on low incomes are more price-responsive than those on high incomes, so there is likely to be a bigger impact in developing countries where tobacco consumption is still increasing.
One of the arguments made against an increase in the price of cigarettes is that it would lead to an increase in cigarette smuggling. However, the World Bank report refutes this:
Smuggling is a serious concern, but even in the face of smuggling, the evidence from a number of countries shows that tax increases still increase revenues and reduce cigarette consumption. Furthermore, Governments can adopt effective policies to control smuggling. Such policies include prominent tax stamps and local language warnings on cigarette packs, as well as the aggressive enforcement and consistent application of tough penalties to deter smugglers.
It is clear that there is already a large and lucrative illegal trade in cigarettes, notwithstanding the fact that price increases have not been prohibitive. An international cigarette smuggling route was uncovered this week when 80 million smuggled cigarettes were found at Dundalk port. It appears that criminal traders have used Ireland as a back door route to the United Kingdom. Recent discoveries have shown that terrorist organisations are benefiting from cigarette smuggling and this is borne out by the involvement of the Provisional IRA in a major cigarette theft at Belfast docks. I congratulate those responsible for bringing some of the criminals to justice and this House encourages the authorities to persist in their work. Since we know that smuggling is an ever-present danger which has to be overcome, we should not accept it as a false argument in favour of keeping the price of cigarettes low.
Nobody is more familiar with my arguments than the Minister for Health and Children as I suspect he has made similar arguments on a number of occasions. The Government chose to ignore the case for substantial increases in the prices of tobacco products and increased prices moderately in the recent budget. I have been struck by the fact that many people, including smokers, see the Government's failure to make the hard decision as a negative feature of the budget. It an interesting phenomenon that one would not have encountered in the past. Smokers used to give a sigh of relief and happily continue to smoke if the price of cigarettes did not alter to any great extent. There has been a cultural change and smokers are feeling the pressure, although they still find it difficult to kick the habit. It is worth asking why this change has come about. Research on Irish attitudes to smoking and smoking prohibition, carried out by the Office of Tobacco Control, shows that smokers are critical of the lack of Government action to make smoking less attractive to young people and to help smokers to stop. The office concludes that smokers are frustrated by their efforts to kick the habit; 72% of them would like to give up and 68% have tried. Smokers recognise the dangers and social unacceptability of their addiction all too well.
The Minister for Health and Children must be greatly disappointed by the failure of his campaign to exclude tobacco prices from the consumer price index. There is broad agreement that increases in the cost of tobacco products assist those who wish to stop smoking and, more importantly, prevent younger people from starting to smoke. Raising tobacco prices helps people to overcome the addiction. By creating a CPI which excludes tobacco, the Government would remove a definite impediment to ongoing increases. The Irish CPI is compiled by the Central Statistics Office, which publishes a CPI sub-index for tobacco, thereby making it feasible to publish and use a national CPI without tobacco. Despite the protests of the Minister for Health and Children, the Government feels that the exclusion of tobacco from the CPI is unfeasible as it would cause problems within the European Union. I find it hard to believe this difficulty would not be overcome if the Minister for Finance was sufficiently enthusiastic and campaigned on the issue with his European counterparts.
It is obvious that uniformity is needed when comparing price indices across Europe, but surely the Governments of other European countries see the merit of increasing the price of cigarettes. It is one of the few deterrents that is effective and leads to fewer young people beginning to smoke. Prevention is much better than cure in this case as addiction to tobacco is severe. It is regrettable that the Minister for Finance yet again has shown himself to be unsympathetic to arguments made with good public health in mind.
The problems with the European Union highlight an anomaly that has existed for some time. While Health Ministers and the European Parliament are increasingly promoting measures to reduce smoking, the European Union is subventing tobacco growers, especially in the poor Mediterranean regions. I know the subvention will cease within a few years, but its existence underlines the fact that employment in the tobacco industry is an issue of concern in many countries, including Ireland. Manufacturers, including cigarette companies, enjoy beneficial rates of corporation tax. Almost 1,000 people are employed in the tobacco industry in Ireland in Gallahers, PJ Carrolls and smaller companies such as Villagers of Ballaghaderreen. Quite apart from the powerful, unrelenting pressure from the tobacco industry, there is also the argument which is not enunciated clearly, but which is part of the subtext when it comes to challenging the tobacco companies, that people's livelihoods depend on this industry.
It was extraordinary that a spokesperson for the Irish Tobacco Manufacturing Advisory Committee pointed out that 95% of the cigarettes sold in Ireland are manufactured here. He suggested that it is better that cigarettes sold here are manufactured here, rather than abroad. It is not an advantage that cigarettes are manufactured in Ireland. This is part of the problem which must be addressed in terms of finding ways, creating alternatives or setting targets to reduce the level of cigarette manufacturing, along with the other measures which have been discussed.
The Minister tried to convince us that he was somehow getting the message across by sponsoring the snooker championship. Young women are the growth cohort among smokers, but I am not sure if many of them are involved in snooker.