George Osborne disregarded the advice of doctors, cancer charities and the Government’s public health experts to rule out a tax on Big Tobacco, official documents show.
Organisations including the Royal College of Physicians, Public Heath England and Cancer Research UK backed proposals for a tobacco levy, which was first proposed by ministers in December.
But after the election the Chancellor rejected his plan and sided with Big Tobacco companies who said it would undermine their contribution to the “recovery of the UK corporate sector” and would set a “dangerous precedent” that would have a “poisonous effect” on confidence.
The advice given to the Government is revealed in Treasury documents released yesterday.
More than 40 of the 58 organisations who responded were in favour of the levy and 12 against. Eight of those 12 were tobacco firms or lobbying groups and at least one of the others was funded by the tobacco industry. The rest did not offer a view.
Labour suggested that Mr Osborne probably had no intention of introducing the levy in the first place – but had suggested the idea to counter a similar Labour proposal.
The party questioned why Mr Osborne waited until after the election to rule out the plan when consultation closed in February – three months before the election and in time to be included in his March budget. “This is further evidence that the Tories weren’t straight with people,” said Andrew Gwynne, Labour’s shadow Public Health Minister. “This leaves ministers facing serious questions about the real reason behind their refusal to introduce the levy.”
Results from the consultation, analysed by The Independent, reveals that the plan for a levy was supported by the Government’s own health experts and academics.
Public Health England, the Government agency tasked with improving the nation’s health, said: “Given the extent of the profits from its activities, the industry can well afford to make a greater contribution to tackling the health inequalities it is largely responsible for creating.” It noted Imperial Tobacco had reported an adjusted operating profit of £623m on net revenue of £915m in 2014.
The Government said it had decided not to go ahead with the levy because it accepted the argument that tobacco companies would simply pass on the costs to consumers.
But this was rejected by the Royal College of Physicians, which said it thought it “highly unlikely that the costs of the levy will be passed to consumers to the extent that the market will bear”.
Deborah Arnott, head of the anti-smoking charity ASH, condemned the u-turn: “If the recommendation of 120 health organisations for a levy is ignored, how do ministers intend to promote public health, help people stop smoking and ensure that the NHS has a sustainable future?”
A Treasury spokeswoman said: “Any levy would complicate the tax system, impose an administrative burden on businesses and create uncertainty for businesses and consumers.”
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