Last night I led an adjournment debate in the House of Commons on the closure of the JTI Gallaher cigarette factory at Ballymena in my constituency.
It was a sad task for me to introduce this debate and I did my best to convey to the House of Commons the devastation this news will cause for my constituents. Worst of all, the resulting job losses are all so unnecessary and the direct result of nanny state interference and a culture which values gesture politics above evidence-led decision making.
I warned for years about the serious consequences for jobs in North Antrim if government both locally, nationally and in Europe continued to over regulate the already heavily regulated tobacco industry. I arranged over twenty on site visits of politicians from all parties and the government to see the real impact more regulations would have on jobs.
Unfortunately those warnings were not heeded and in October JTI announced that workers across its European footprint would cease production. This has been devastating news. Over eight hundred local bread winners will join the ranks of the unemployed. Each year almost £60 million is pumped into the local wage economy by JTI but from 2017 that will be over. Every family in my constituency is likely to be affected by the scale of the loss.
Those who championed over-regulation of this industry should hang their heads in shame. They bear ultimate responsibility for what – it is no exaggeration to say – has been inflicted upon the people of North Antrim.
What frightens me is nothing seems to be learned from this sad and shameful episode. Our own Government press ahead with nanny state moves to introduce plain packaging and have notified the EU of their intention to proceed despite not waiting for the end of the public consultation process.
Likewise the Government of the Republic of Ireland press ahead with their plans to introduce plain packaging. Unfortunately there are many lessons to learn from over regulation in the Republic and we should pledge not to follow their folly.
In a written answer in June the Republic’s Minister for Finance Michael Noonan was forced to concede that “In economic terms, the demand for Irish duty-paid cigarettes has moved to become much more elastic in nature, this implies an increase in price will lead to a proportionately larger decrease in consumption of Irish duty paid cigarettes resulting in an overall decrease in cigarette excise receipts.”
Despite this last week’s budget there introduced a 40-cent excise hike which brought the price of 20 cigarettes to €10. This is the economics of the madhouse and it scares me that out Government might consider following their lead.
We know that plain packaging will not decrease smoking prevalence. We know it will increase illicit sales and hot hard small retailers and businesses. The PSNI has warned that illicit tobacco proceeds funds organised crime. We know there is a serious threat that the UK government will be liable to pay £11 Billion in compensation for the deprivation of intellectual property rights of tobacco companies.
We also know that Australia – which has introduced plain packaging – is embroiled in the world’s largest ever trading dispute as a consequence. Yet still we proceed with this dangerous notion.
The Republic of Ireland is acknowledged as having some of the most repressive tobacco control measures in Europe. Have they worked? You must be joking. In 2013, more than 1 in every 5 cigarettes consumed in Republic was contraband or counterfeit. A KPMG report published in June 2014 showed that the Republic has the 3rd highest level in the EU for contraband & counterfeit cigarette consumption, only the Baltic States of Latvia & Lithuania which share land borders with Russia are ahead of Ireland when it comes to cigarette smuggling.
Grant Thornton have estimated the Irish government is losing as much €679 million of tax revenue each year (that is €1.86 million a day that could be used to fund vital services) because of illegal tobacco while 23 percent of Irish people (including non-smokers) admit to having knowingly purchased illicit tobacco. According to the Irish Times: “Just a few short years ago, Ireland was a world leader in the war against smoking, but today we hold a more dubious distinction, as the European “capital” of cigarette smuggling.”
It is bad enough that prohibitionist tobacco over-regulation in the Republic of Ireland causes problems for us over the border in the UK in terms of tobacco smuggling and incentives to illicit trade. We should not follow suit by introducing our own draconian regulations, restrictions and taxation.
I invite all leading politicians in the UK to come to my constituency and see the devastation caused by the job losses directly attributed to restrictive regulations. The people of my constituency – many of them friends and colleagues – bear witness to the terrible impact such a dangerous mindset results in. Shame on all those zealots who egged on and continue to egg on over-regulation.