Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael) | Oireachtas source

There are also costs associated with smoking. In 2008 it was claimed that smoking was responsible for 36,000 hospital admissions, at a staggering cost of €280 million. People have to take time off work; they suffer from lung disease, strokes and cancers, all of which impacts on the cost of smoking. Let us be clear about this: as taxpayers, we have to foot the bill and cough up €280 million required through extra taxes. Nothing annoys and upsets me more than seeing a child or a pregnant woman smoking.

The Irish Heart Foundation reports that 12% of school age children are smokers. It claims that children from lower socioeconomic classes are likely to smoke. It also points to research indicating that smoking is largely a childhood phenomenon, with 78% of smokers reporting that they started to smoke before the age of 18 years. More than half started before the age of 15 years. IHF research in 2011 indicated that 21% of women in Ireland had smoked during pregnancy and that it had a negative impact on the foetus. These statistics give cause for real concern and they are factual. I, therefore, ask Deputy Finian McGrath to check his statistics.

One method the Government has used to reduce the level of smoking is the setting of minimum retail prices for cigarettes. However, this approach has been deemed contrary to EU law. Minimum pricing will no longer be an option for the Government in controlling cigarette sales. However, it will still be capable of controlling the price of cigarettes through taxes and levies. As a preventive measure, price control is important. I will not dismiss what the World Bank and the World Health Organization argue, namely, that price is a key factor in reducing the number who smoke. Young people are particularly more sensitive to price rises. It is found that, on average, they will reduce their level of consumption three or four times more than adults.

In 2002 the New York city tobacco control programme put in place by Mayor Bloomberg included the raising of tobacco tax. In the ten years before the programme was implemented there was no decrease in smoking rates. After the control programme was introduced, the rate of smoking among teenagers decreased from 17.6% in 2007 to 8.5% in 2011. Irish figures also show that a price increase resulted in a decrease in the level of consumption. Figures further show that new smokers, especially children, become addicted when the price remains constant. These figures reinforce the argument in favour of the Government maintaining and raising the price of tobacco. The World Health Organization states, "Increasing the price of tobacco through higher taxes is the single most effective way to encourage tobacco users to quit and to prevent children from starting to smoke".

The Irish Heart Foundation also suggests the implementation of a price cap regulation which would set a minimum price tobacco companies could charge for their product based on an assessment of the genuine costs each firm faced. A price cap could have a number of benefits: it could address the excessive profits of tobacco companies, increase Government revenue by transferring excess industry profits to the Government and deliver many public health benefits. However, it is likely that such a move would also be struck down by the European Union for infringing EU law. The Irish Heart Foundation also recommends extending smoke-free zones to protect children. The Minister for Health is making great strides to achieve this and I congratulate him on that promotion.

I am also delighted many county councils have banned smoking in playgrounds. Smoking must be denormalised for children who should not associate smoking with something Mammy does in the car on the way home from school, with something Daddy does in the playground or with something Granny does while waiting outside the school grounds. Second-hand smoke is a significant cause of death and disease. For the benefit of Deputy Finian McGrath, I repeat that it is a significant cause of death and disease. Children, pregnant women and unborn babies are particularly susceptible in this regard.

When tobacco price increases are mentioned, an argument usually is made about tobacco smuggling. We heard it made here earlier.

A recent Revenue analysis stated that increasing tobacco taxation will increase consumption of untaxed tobacco products. The Irish Heart Foundation disagrees while the World Bank and the World Health Organization, WHO, also concludes that tax is not a major driver in smuggling. WHO points to other factors such as weak customs controls.

Announcements of tobacco seizures are not always well advertised but it is determined on how effective our controls are. As of September 2012, almost 81 million contraband cigarettes had been seized in 2012. There is no doubt that cigarette smuggling is big business. The measurement of the scale of illicit trade is difficult in any country. Revenue has estimated that illicit cigarettes accounted for 14% of all cigarettes consumed in the State in 2009. This represents a potential loss of €200 million in excise duty for the Exchequer.

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