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** 21 July 2021
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** UK
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** Sunak has little room for giveaways in spending review, says IFS (#1)
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** Delays in regulatory reform leave children exposed to e-cigarette promotion (#2)
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** Vectura deal is challenge for ethical pledges (#3)
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** International
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** Ireland: Two arrested after tobacco and cigarettes seized in Co Louth (#4)
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** UK
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** The UK chancellor will have virtually no space to make new long-term commitments in this autumn’s spending settlement, even though tax revenues are rebounding faster than expected on the back of an improving economic outlook, the Institute for Fiscal Studies said on Wednesday. The think-tank published new projections for the public finances, based on economic forecasts by Citi, showing that public borrowing in 2021-22 could come in £30bn lower than the £234bn forecast by the Office for Budget Responsibility at the time of the March Budget.

This would make it possible for Rishi Sunak to announce a “sizeable short-term giveaway”, while still staying on the path for borrowing set out in March, the IFS said.

This permanent damage to the economy, combined with the rising cost of servicing government debt, meant the chancellor could only announce new permanent spending commitments if he matched them with cuts elsewhere, funded them with new taxes or abandoned his principle that the government should not borrow in normal times to pay for everyday public spending.

The IFS research adds to evidence that departments will be facing a tough spending settlement for the rest of the parliament, as the chancellor seeks to address mounting post-Covid pressures on public services, while a spike in inflation threatens to raise borrowing costs.

The Office for Budget Responsibility said this month that it would take an extra £10bn a year for each of the next three years to address the immediate pressures in just three areas of public spending — the backlog in the NHS, the task of catching up on lost learning in schools, and the hole in fare revenues resulting from the drop in commuting. But Sunak has made it clear he intends to bear down on public borrowing, despite pressure from No 10 and from MPs in more deprived northern constituencies to spend.

Source: Financial Times, 20 July 2021
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Public health charity Action on Smoking and Health (ASH) yesterday (19 June) criticised the government for failing to address loopholes that allow children to be given e-cigarettes as freebies, although the law bans their sale to under 18s. New findings, published yesterday, also find additional opportunities for regulations to protect children. Reducing branding on e-cigarette packaging could reduce their appeal to children while adult smokers are not put off by packaging with less branding.

Youth use of e-cigarettes remains very low in Great Britain with 11 per cent of 11–17-year-olds ever having tried vaping and 1.2 per cent currently using the products. However, concerns have been raised about how products are branded and the extent to which they could appeal to children.

In questions developed in collaboration with academics at King’s College London and the University of Waterloo in Ontario, respondents were shown a range of different packaging of popular vaping brands to test their appeal. While children were more likely to indicate that branded packs were appealing compared with non-branded ones, adult smokers had no preferences between branded or unbranded products.

Hazel Cheeseman, ASH deputy chief executive, said, “Currently youth vaping in this country is not a significant problem, but nor do we want one. E-cigarettes have been a powerful tool to help smokers stop and we want to see many more make the switch. However, we also need to do all we can to avoid uptake in young non-smokers. The time is right for the government to explore how packaging can be made less appealing to children whilst also understanding how we can best expand the appeal of products among adult smokers.”

Sarah Aleyan, post-doctoral researcher at King’s College London, said, "There is little regulation of e-cigarette packaging in the UK. This new research suggests that taking action to regulate e-cigarette packaging could help decrease the appeal of e-cigarettes to children. Given there is still some confusion between vaping and smoking, it is essential that any packaging requirements make clear the distinction between e-cigarettes and tobacco products."

In June ASH reported that adult smokers were still not switching to vaping in sufficient numbers and poor understanding about the relative safety of e-cigarettes compared to smoking may be inhibiting people from making healthier choices.

Source: The Dentist, 20 July 2021
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When in 2017 Legal & General Investment Management trumpeted the launch of a tobacco-free pension fund for Cancer Research UK, one of Britain’s largest asset managers claimed that it was providing another choice for “health-conscious pension funds and consumers . . . Investing money on behalf of ourselves, our clients and our shareholders is a great responsibility.”

Four years on, the planned £927 million takeover of Vectura, the British respiratory drugs company, by Philip Morris International, one of the world’s largest tobacco companies, has created a potential dilemma for institutional shareholders in Vectura — including Legal & General.

Under Nigel Wilson, its chief executive, L&G has spoken out increasingly about so-called environmental, social and governance investment issues. Indeed, many of Vectura’s largest investors are financial institutions that have publicly committed to integrating ESG standards into their investment decisions and some have pledged to actively eliminate tobacco investments.

The bid raises the prospect that shareholders will be agreeing to sell a respiratory drug company that works on treatments for smoking-related diseases to a tobacco company.

There is also a growing backlash against the deal from politicians and healthcare organisations. Jon Ashworth, the shadow health secretary, and Ed Miliband, the shadow business secretary, along with the chief executives of Cancer Research UK, Asthma UK, the British Lung Foundation and Action on Smoking have written separately to Kwasi Kwarteng, the business secretary, and Sajid Javid, the health secretary, urging the government to intervene. Kwarteng has asked officials to monitor Philip Morris’s plans and officials are understood to be uncomfortable with the deal.

The World Health Organisation has warned that the tobacco industry is seeking to establish partnerships in healthcare to undermine control of its “deadly products”.

Vectura’s board has declined to discuss the deal further and several of its shareholders, including Axa and L&G, declined to comment when contacted by The Times. Top 20 shareholders in Vectura include BlackRock, Norges and Artemis, according to Refinitiv.

Source: The Times, 21 July 2021
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** International
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** Two men were arrested after nearly 10kg of counterfeit tobacco, 13,500 cigarettes and nearly €4,000 in cash were seized in by gardaí and customs officers in Drogheda, Co Louth, on Monday (19 July). The searches related to the sale of counterfeit cigarettes in Drogheda.

Gardaí said during the course of the operation searches were carried out at a retail premises and two residential properties. The counterfeit tobacco products represented a total loss to the exchequer of about €12,000.

Two men in their 30s were arrested in connection with the seizure and have since been released without charge. A file is being prepared for the Director of Public Prosecutions.

Investigations into the matter are ongoing.

Source: The Irish Times, 20 July 2021
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ASH Daily News is a digest of published news on smoking-related topics. ASH is not responsible for the content of external websites. ASH does not necessarily endorse the material contained in this bulletin.

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