Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment she has made of the merits of implementing a national strategy to tackle (a) the sale of (i) illegal tobacco and (ii) vapes and (b) money laundering.

The UK Government has national strategies to curb the sale of illegal tobacco and combat money laundering, and is developing a robust compliance framework for the upcoming Vaping Products Duty.

In January 2024, HM Revenue and Customs (HMRC) and Border Force launched their latest illicit tobacco strategy, “Stubbing Out the Problem”. This builds on a series of previous strategies which, together, have contributed to a significant reduction in the tobacco duty tax gap, from 21.7% in 2005/06 to 13.8% in 2023/24. Tackling the trade in illicit tobacco requires a comprehensive, cross-government approach and the latest strategy is supported by over £100 million in new Smokefree funding over five years to further enhance enforcement capabilities to disrupt both supply and demand across the entire tobacco supply chain.

As announced at Autumn Budget 2024, Vaping Products Duty (VPD) will come into effect on 1 October 2026. In preparation HMRC is developing a comprehensive compliance strategy to address the illicit vaping market. This includes vaping duty stamps and enhanced enforcement powers. These measures will be implemented before the duty goes live and will form part of a cross-government enforcement approach supporting provisions in the Tobacco and Vapes Bill.

The Government’s approach to tackling money laundering is embedded within the Economic Crime Plan 2 (2023–2026). This plan sets out what the public and private sectors should do to continue to transform the UK’s response to economic crime, including money laundering. HMRC supports several of the actions in their plan, such as anti-money laundering supervisory reform and targeted intelligence and operational work on high-harm money laundering methodologies.