Storm blows up over windfall tax plan

The UK’s tobacco industry was said to have reacted with ‘fury’ to a plan by the opposition Labour Party leader, Ed Miliband, to impose an additional tax on Britain’s tobacco companies to help pay for National Health Service (NHS) spending, according to a story in The Guardian.

Imperial Tobacco said Labour’s plans to raise at least £150 million by taxing companies according to market share amounted to an attack on a legitimate business sector.

A spokesman for the company said the idea was totally unwarranted and unjust, and should be dismissed immediately.

“The idea put forward today [Tuesday] fails to acknowledge the wider contribution made by Imperial to society, and will place further pressure on jobs and livelihoods,” the spokesman said. “Earlier this year we announced the closure of our Nottingham cigarette factory, citing in part the impact of excessive tobacco regulation and taxation.”

The Guardian said the industry argued that it contributed £12.3 billion a year to the exchequer, while the costs of smoking to the NHS were estimated at between £2.7 billion and £5.2 billion.

The industry trade body, the Tobacco Manufacturers’ Association, also opposed the Labour Party’s plan. “This anti-business idea is illogical and ignores a major cause of lost tobacco tax, the illegal market,” said Giles Roca, director general.

Meanwhile, Miliband told delegates at the annual party conference in Manchester that it was fair to impose additional costs on an industry that makes “soaring profits on the back of ill health”.

The UK is due to hold a general election on May 7 next year.

The full story is at: http://www.theguardian.com/business/2014/sep/23/uk-tobacco-firms-protest-labour-cigarette-tax-pay-nhs.