Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what steps he is taking to reduce demand for illicit tobacco.

The joint HM Revenue and Customs (HMRC)/Border Force strategy ('Tackling Illicit Tobacco: From leaf to light') ‎published on GOV.UK on 24 March 2015 sets out a comprehensive framework to tackle this problem at all points in the supply chain, to deter and punish involvement in the fraud and reduce demand. HMRC and Border Force work closely with other enforcement agencies, including Trading Standards and the police to target those involved in the fraud. Since 2000, the illicit market for cigarettes has reduced from 22% to 13% and for hand rolling tobacco from 61% to 32%.

There is a wide range of sanctions available to tackle the sale of illicit tobacco (and alcohol) including seizure of products and cash, financial penalties and a maximum penalty of seven year’s imprisonment. In the last two years alone, over 3.5 billion illicit cigarettes and around 600 tonnes of hand-rolling tobacco have been seized resulting in 848 prosecutions.

On prosecution, HMRC can also apply for withdrawal of retailers' alcohol licenses and orders prohibiting the use of premises for the sale of tobacco for a period of up to 6 months. Additionally, as a result of coordinated activity with other enforcement agencies, action can be taken on wider tobacco offences, such as under-age sales, and on vehicle licensing and immigration offences.

HMRC works to raise awareness of the consequences of participation in the illicit market, its links with organised criminality and the related harm that illicit tobacco causes to individuals, communities and legitimate high street businesses. HMRC has been using behavioural insight to better promote awareness of the issue and deter participation in the fraud, for example through campaigns it has undertaken involving hauliers, coach drivers and retailers.

As announced at Budget 2016, following the informal consultation HMRC is currently developing options, with particular focus on the approach taken to repeat offenders, and plans to consult formally later this year.