Tories want freeze on tobacco tax
Tuesday 04 May 1999
John Whittingdale, a Tory Treasury spokesman, will today signal a U- turn in the party's policy when he demands a halt to cigarette price rises. Mr Whittingdale will attack the 5 per cent hike in tobacco duty by Gordon Brown, the Chancellor, in the Budget and dump years of cross-party consensus on the issue by calling for a total freeze.
The Tories' shift in policy was immediately condemned by the Cancer Research Campaign (CRC) and other health groups, who accused them of pandering to the tobacco industry.
Labour also claimed that the move, with the Tories' recent pledge to freeze fuel duty rises, left a pounds 10bn-a-year "black hole" in the Tories' spending plans that would have to be plugged by income tax rises.
The Tories have long retained links to the big tobacco firms, with the former chancellor Kenneth Clarke on the board of the British American Tobacco (BAT) and Baroness Thatcher a consultant to Phillip Morris. Mr Whittingdale will claim today that of the tax rises in the Budget, the rise in tobacco duty was "among the most pointless and counter-productive". His speech, which surprised the Tory health team yesterday, will claim that the United Kingdom is losing billions in revenue to cigarette smugglers because prices are cheaper on the Continent.
Gordon McVee, director- general of the CRC, led the criticism of the new policy, claiming that the U-turn was "a complete folly. As far as the war against cancer is concerned, it is a stupid reversal of what was a sensible policy that the Conservatives held in government," he said.
"It is just unbelievable. I thought the Tories were trying to distance themselves from their Thatcherite belief in free markets. This shows that they are listening only to the industry."
A spokesman for Ash, the anti-smoking lobby group, said: "We think that the Government's approach is absolutely right... [it] makes sense to increase taxes on what you don't like rather than on jobs and investment. It's also a very good health policy because people give up smoking or don't start."
The Tories pioneered regular rises in tobacco duty 18 years ago and were committed in their manifesto at the last election to annual 3 per cent rises.
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