Question to the HM Treasury:

To ask Her Majesty's Government what assessment they have made as to the impact on small and medium sized businesses, including independent retailers, in respect of the most recent EU Commission proposals for a pan-European tobacco track-and-trace scheme, including start-up and annual running costs.

The government has been working on the draft implementing legislation for Articles 15 and 16 of the EU Tobacco Products Directive with the Commission and other Member States. We are aware of concerns raised by businesses affected and have been working to try to ensure that the system adopted is effective, efficient and proportionate in tackling the trade in illicit tobacco products which puts public health at risk and avoids the payment of duty. This includes working to ensure that the burdens imposed by new EU regulations are kept to a minimum. A number of amendments have been made to the proposed regulations in line with meeting these objectives.

The Directive provides for the costs of the scheme, including the necessary equipment for those involved in the supply chain to be met by the tobacco industry and for the identification codes need by independent retailers to be obtained by their suppliers on their behalf if desired.

It has not been possible for the UK to produce its own assessment of the overall business impacts or effectiveness in tackling the illicit trade due to the continuing changes to the proposed regulations.

In responding to the consultation on possible licensing of the tobacco supply chain, the government considered the additional controls that would be offered by measures under this Directive and concluded that there was currently no case for an additional licensing scheme operated by HM Revenue & Customs to tackle the illicit trade.