Dáil debates

Wednesday, 6 December 2006

Financial Resolution No. 2: Mineral Oils

 

6:00 pm

Photo of Bertie AhernBertie Ahern (Taoiseach; Dublin Central, Fianna Fail)
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I move:

(1) THAT for the purposes of the tax charged by virtue of section 95 of the Finance Act 1999 (No. 2 of 1999), that Act is amended, with effect as on and from 1 January 2007, by substituting the following for Schedule 2 to that Act, as amended by section 79(a) of the Finance Act 2006 (No. 6 of 2006):

"Rates of Mineral Oil Tax.
Description of Mineral Oil Rate of Tax
Light Oil:
Leaded petrol â'¬553.04 per 1,000 litres
Unleaded petrol â'¬442.68 per 1,000 litres
Super unleaded petrol â'¬547.79 per 1,000 litres
Aviation gasoline â'¬276.52 per 1,000 litres
Heavy Oil:
Used as a propellant with a maximum sulphur content of 50 milligrammes per kilogramme â'¬368.05 per 1,000 litres
Other heavy oil used as a propellant â'¬420.44 per 1,000 litres
Kerosene used other than as a propellant â'¬00.00
Fuel oilâ'¬14.78 per 1,000 litres
Other heavy oil â'¬47.36 per 1,000 litres
Liquified Petroleum Gas:
Used as a propellantâ'¬63.59 per 1,000 litres
Other liquified petroleum gas â'¬10.00
Substitute Fuel:
Used as a propellant â'¬368.05 per 1,000 litres
Other substitute fuelâ'¬47.36 per 1,000 litres
Coal:
For business useâ'¬4.18 per tonne
For other useâ'¬8.36 per tonne

".

(2) It is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

Resolution No. 2 provides with effect from 1 January 2007 for the removal of the non-auto rates of mineral oil tax on kerosene and liquid petroleum gas. When VAT is included these amount to approximately 1.8 cent on a litre of kerosene and 1.1 cent on a litre of LPG. The changes will apply primarily to kerosene and LPG used for heating. It is estimated that these measures will cost the Exchequer approximately €24 million next year.

Resolution No. 3 provides for excise duty increases on tobacco products with effect from midnight, which when VAT is included amounts to an increase of 50 cent on a package of 20 cigarettes with pro rata increases on other tobacco products. This increase will bring the price of a packet of 20 cigarettes in the most popular price category to €7.05. It will ensure that taxation policy continues to play a key part, along with the work of the Department of Health and Children and the Office of Tobacco Control in discouraging smoking. It is particularly the case among young smokers where price sensitivity is greatest. It is anticipated that the excise yield from tobacco products will be €1.197 billion in 2007. This represents an increase of €98.5 million over the projected figure if there were no change in the current excise rates. There will also be some increases in the VAT yield.

I recommend both resolutions to the House.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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I welcome Resolution No 2 although it is not my wont to welcome resolutions at any time. However, we should all welcome anything that would address the burden that is imposed on householders arising from gas and electricity price increases in the past three months, which flew in the face of international trends. Although the degree of alleviation is not nearly as great as one would have liked, any excise duty that adds to the burden of costs will result in the relocation of businesses. We have spoken about that issue and no doubt it will arise in the course of the debate tomorrow.

Having regard to the all-island electricity market, to what extent do we compare with Northern Ireland on excise duty in this area? I am delighted to note that the Tánaiste has entered the House, which is a major achievement because he left rather suddenly earlier tonight. I thought he had gone off to climb a telegraph pole. I officially welcome him back. On a momentous occasion like this, the debate could not continue without his enlightened approach. Perhaps the Taoiseach might elucidate further on the comparisons between the excise duty here and that in Northern Ireland and the degree to which we are in an enviable or other position.

As one of the few remaining living smokers, I am afraid I am hit again by the excise duty increase on tobacco products. While I am loath to welcome such a provision, since it is coming in my direction there is nothing I can do to deflect it. I humbly accept that particular burden, as unfortunately I am totally guilty.

Photo of Caoimhghín Ó CaoláinCaoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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The proposed removal of excise duty on kerosene and liquid petroleum gas is welcome. However, these are marginal decreases and will only bring those rates in line with those North of the Border.

In light of increased dependence on these forms of heating, particularly among senior citizens, was consideration given to whether the value added tax that applies could also have been considered under this proposition? Is the Taoiseach in a position to shed light on that matter? Once we have dealt with the excise duty, the reality is that value added tax is the significant imposition in the context of the Government's take from the overall cost of kerosene and LPG. While this is coming into effect from 1 January 2007, there is a calculated cost measure for the remainder of this year. Do I understand that this is in anticipation of people waiting until the new year before purchasing fuel at the reduced price?

The increase in excise duty on packets of 20 cigarettes by 50 cent and pro rata increases on other tobacco products come into effect from midnight. I am no longer a smoker and in the context of encouraging people not to smoke, this is a welcome proposition. We must demonstrate that stopping people smoking is the real intent behind Financial Resolution No. 3. One cannot fail to take account of the concluding statement in respect of the resolution that it will yield an estimated €2 million in the short time remaining before the end of the month and an additional €112 million throughout 2007.

The Taoiseach is accompanied by a number of advisers and it is important that we demonstrate this mechanism is not intended as another means of gathering revenue from people because they are smokers. Will he clarify that it is motivated by an intention to discourage people who are already smokers from continuing and also to discourage young people who might be attracted to the habit from taking it up? Will he indicate the percentage decrease in the demand for tobacco products that was factored into the calculation of the additional excise duty yield to the year's end and for 2007? That is an important point, in respect of which clarification must be provided. The information I seek should be readily available from the near army of advisers accompanying the Taoiseach. In my opinion, the information to which I refer is important in terms of demonstrating to people, particularly smokers, that the real purpose and intention behind the resolution is health-motivated.

Photo of Seán ArdaghSeán Ardagh (Dublin South Central, Fianna Fail)
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I welcome the reduction in excise duty relating to heating oil, which will work out at a decrease of €8 on 500 litres or €16 on 1,000 litres. The reduction will come into effect on 1 January 2007. I hope that a cold snap, accompanied by heavy snow, does not occur at the end of this month when people are waiting to purchase home heating oil. The cost of such oil increased in recent times following increases in the price of petrol and oil on the world stage.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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The price dropped on the world stage.

Photo of Seán ArdaghSeán Ardagh (Dublin South Central, Fianna Fail)
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This is a welcome move on the part of the Government that will in some way help to reduce the burden shouldered by people in terms of the cost of home heating oil.

On the cost of cigarettes, I recall that when I was eight years old one could go to the local shop and buy a single Player's cigarette. In his budget speech, the Minister indicated that he intends to encourage people to sell cigarettes in packets of 20 in order to discourage young people from taking up smoking. If, as the Taoiseach stated, the price of a packet of 20 cigarettes is to rise to €7.05, this will act as a significant deterrent in the context of discouraging young people from smoking.

There is no doubt that the sale of tobacco generates significant amounts of money for the Exchequer. The figure in this regard currently stands at €1.2 billion and will increase by €100 million this year. The intention behind the increase in the cost of cigarettes is health-motivated and represents an attempt to try to reduce the number of cancers and the level of heart disease among citizens. The Irish Cancer Society was seeking a €2 increase in the price of a packet of 20 cigarettes. I am sure the Minister for Finance would have liked to increase the price by that amount, if for no other reason than to protect people's health. As outlined by the Minister, a difficulty arises in the context of inflation and the effect an increase in the price of cigarettes has on the rate of increase in the consumer price index, CPI. The social partners must take on board what the Minister suggested, namely, that the price of cigarettes be removed from the CPI.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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If the price of cigarettes is removed, there will be nothing left in the CPI.

Photo of Seán ArdaghSeán Ardagh (Dublin South Central, Fianna Fail)
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What we are trying to do is improve the health of the nation's citizens. Remarks that do not assist in that regard are not helpful.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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The Deputy should be in the Progressive Democrats. He is quite arrogant and knows everything.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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He will be the next applicant.

Photo of Seán ArdaghSeán Ardagh (Dublin South Central, Fianna Fail)
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We must encourage the social partners to agree that the increase in the price of cigarettes will not be included when wage demands are being made. It is important that this should be done and that the social partners should take this suggestion on board.

This is the first increase of 50 cent in the price of packets of 20 cigarettes. I hope that over the next four years the price will increase by 50 cent each year not to accrue additional revenue for the Government through excise duty, but to ensure a reduction in the number of people who smoke and also to reduce the number of cancers and level of heart disease among citizens. I fully support the increase of 50 cent in the excise duty on packets of 20 cigarettes.

Photo of Pat RabbittePat Rabbitte (Dublin South West, Labour)
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I do not take any great issue with either of these resolutions. The reduction in excise duty in respect of home heating oil is timely, appropriate and necessary. Fuel poverty is a major issue for a good number of families. It is also an issue for some elderly people. As has been remarked, and notwithstanding the apparent volte face by the regulator in respect of gas and electricity prices, the extent of fuel price increases is significant. It is fine to increase the fuel allowance by €4 to €18. That is a welcome development but this remains an issue for many people because only a small number of those affected qualify for fuel allowance. There are many people on low incomes who will not be eligible for the allowance. This reduction in the excise duty on home heating oil is welcome.

I am bound to say that Deputy Ardagh is right regarding the scientific evidence, but the 50 cent increase in the price of cigarettes is hardly immaterial for a senior citizen who has long since become addicted. It will be painful, but on the scientific evidence and given that we want to encourage people to stop and discourage the young from taking up the habit, it is very hard to muster any argument against it.

There used to be debates on the issue in this House, and one could expect Deputies from Dundalk and my own constituency, where Gallaher's, which has now sadly been restructured out of existence, was a good employer, to argue against tax rises. However, it is very hard to say that the Minister is not correct in introducing this disincentive. Medical provision for the cancers that ensue is enormously costly. It carries a terrible price in human health, and if we were successful in dissuading only a small number of young people from embarking on the habit, it would be worthwhile. I therefore have no difficulty in assenting to the two resolutions.

Photo of Michael MulcahyMichael Mulcahy (Dublin South Central, Fianna Fail)
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I too wish to speak on resolution No. 3, which deals with excise duty on cigarettes. As a non-smoker, I am reluctant to enter the debate, since I hate to tell others what they should or should not do. What we are trying to do, if we are honest with ourselves, is execute an instrument of health policy and, to a certain degree, social engineering.

Two valid points have been made in the debate, the first being that we must discourage the young from smoking, to which end we should of course increase excise duty as much as possible. On the other hand, there may be older people, as Deputy Rabbitte has pointed out, who are addicted to cigarettes, meaning that the increase may cause them some hardship. We must examine the issue in terms broader than the excise issue.

I support the 50 cent rise. The Irish Cancer Society had sought a rise of €2, and I would personally have favoured a larger increase in the duty on cigarettes. Many young people nowadays have large disposable incomes, and an extra 50 cent for them might not make a great deal of difference.

Another issue is smuggling, since the more that one increases the price of cigarettes, the greater the temptation to smuggle them into the jurisdiction. The relationship between price increases and smuggling should be examined very carefully. Regarding the CPI, the social partners must be put under a little more pressure. I would like to secure agreement early in 2007 that, by the time of the next budget, cigarettes can be removed from the CPI, with much larger increases in tobacco excise duty.

If one really wishes to stop young people, one should also consider access. Young people can use cigarette vending machines everywhere. With those caveats, I offer my strong support for resolution No. 3.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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I had not planned to speak on resolution No. 3 but changed my mind after hearing the contributions. Even if one increased the price of cigarettes to €10 a packet, a sizeable proportion of the population would not be discouraged. If we are to address the issue, we must engage in new thinking. I know that the former Minister for Health and Children, Deputy Martin, was complimented on introducing the smoking ban, which has undoubtedly reduced the numbers of those who smoke, especially among older people. However, it has encouraged young people to smoke, and statistics show an increase in smoking among that group. One need only visit a night club any weekend of the year to see why. If we are serious, we must admit that putting 50 cent on a packet of cigarettes is not the magic bullet that will solve the problem of smoking. It is about time we got real in that regard.

My main reason for taking the floor was to speak on the second resolution, regarding excise duty. I welcome the decision, since it will provide some relief to many families under great financial pressure. It will eradicate the laundering of home heating oil across the Border, something extremely welcome in itself. I know that my colleague, Deputy Crawford, has raised the issue numerous times in the House in the context of the chemical residue following cross-Border fuel-laundering.

However, I am disappointed that we are not considering the extension of excise relief on bio-fuels. The Minister must be commended for the incentives put in place for the agriculture sector to grow energy crops. However, there is not much point in doing so if there is no market for them, and the budget does nothing to create such a market. It is disappointing that we did not introduce excise relief across the board for renewable fuels, whether home heating oil or vehicle oil.

I know that the Progressive Democrats closely followed our policy document on renewable energy.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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They are going nuclear.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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However, they failed to achieve anything in the budget when it comes to providing a market for renewable energy.

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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It is the Ringsend nuclear reactor.

Photo of Denis NaughtenDenis Naughten (Longford-Roscommon, Fine Gael)
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It is pointless to hand out grants, which is why the Minister said in his Budget Statement that the incentive would cost the Exchequer only €6 million by 2009. The uptake will not be large, since there is not much point in providing an incentive unless one provides a market to ensure that people can make a return.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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I call Deputy Sargent.

Photo of Michael RingMichael Ring (Mayo, Fine Gael)
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I had indicated that I wished to speak.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Yes, but so did Deputy Sargent before Deputy Ring.

Photo of Michael RingMichael Ring (Mayo, Fine Gael)
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Deputy Sargent has only just entered the Chamber.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Deputy Sargent was here before the Deputy.

Photo of Michael RingMichael Ring (Mayo, Fine Gael)
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No, he was not. He came in after me.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Even if the Deputy raised his hand ahead of him, on the basis of proportionality, he would be entitled to come in. Two members of the Fine Gael Party have spoken and no one from the Green Party.

Photo of Michael RingMichael Ring (Mayo, Fine Gael)
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The same thing happened during last night's Adjournment debate, when there were three. We have had that row before. Let us be fair in the House.

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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In fairness, I am prepared to wait and allow Deputy Ring to speak before me. I have no issue; I passed Deputy Ring on my way back from speaking to the Ceann Comhairle. I am happy to speak, but I will not press my claim.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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I call Deputy Sargent.

8:00 pm

Photo of Trevor SargentTrevor Sargent (Dublin North, Green Party)
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I support resolutions Nos. 2 and 3, which are as interesting for what they fail to say as for what they say. I will highlight one or two aspects that occur to me. It is interesting that we are dealing with the difficulties that arise when there are two Administrations on the island with different views on excise and other charges. That does not only happen regarding home heating oil. The change is valid to alleviate the hardship caused on one side of the Border as it competes with the other.

There have been discussions on this issue, so why must we have this measure when discussions took place between the Departments of Finance and Environment, Heritage and Local Government on other areas? We do not, for example, take account of the fact that the large volume of fuel being bought south of the Border and burned in the North is enough to add €50 million a year to our Kyoto penalties. I wonder about the motivation for this measure and whether it serves only to avoid the elephant in the room. The Minister for Finance referred in his Budget Statement to the provision of €270 million to fund a programme of carbon allowance purchases. This sum of money could be used to provide grants for housing insulation and other measures to save energy, but instead it is being exported from the country.

Other issues come into play in terms of harmonising regulations on either side of the Border. I understand, for example, that it costs the Northern authorities €44 million per annum to manage illegal dumping from the South, which arises because of the differences in refuse charges in the two jurisdictions. It may be time to take a more practical approach to the harmonising of regulations North and South. Perhaps this measure is a signal that this is beginning to happen. I welcome it for that reason but seek clarification as to whether it will lead to a more comprehensive addressing of all these issues North and South.

I welcome the measure relating to tobacco products. It is easy to welcome it because, as a non-smoker, the price increase will not affect me. I meet many smokers who say they would like to give up a habit that is such a waste of money but are unable to do so because they are addicted. Given that a considerable number of elderly people smoke, I wonder whether this measure involves some clever arithmetic in that the increase in the pension, for example, may be offset by the increase in excise duty on tobacco products. There are various ways of looking at this from an economic point of view. Ultimately, however, I support the notion of getting across the message that smoking is bad for one's pocket as well as one's health. That seems to be the thinking behind this measure.

It would be interesting to discover whether this increase is sufficient in the context of the cost to the health service of dealing with the effects of smoking. Has any such figure been calculated? What is the cost to the health service of meeting the needs of those who smoke? The health service needs as many resources as possible and the greatest possible capacity in terms of hospital beds. We must take action where we can reduce the possibility of people requiring hospital treatment.

Photo of Michael RingMichael Ring (Mayo, Fine Gael)
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What will the Government do to ensure companies implement the reductions in the price of fuels? In the past, increases in the price of fuel and other commodities were put into effect at midnight on the day of the budget. Such increases are always passed quickly on to the consumer. What action will be taken to ensure these reductions are passed on to consumers tomorrow?

The increase in the price of tobacco products is the meanest attack of all. Having listened to the arguments put forward by previous speakers, I wish to make clear at the outset that I do not smoke and that I hate cigarettes, but I know many people who love them. Smoking is an addiction and for some people, it is their only joy in life. It is their choice to smoke.

Why should we focus only on smokers? What about those who abuse alcohol, some of whom cause havoc on the roads and destroy families? We see the effects of excessive alcohol consumption in every village, town and city at weekends. Why is there no increase in the cost of alcohol products? Why are we punishing the elderly person, for instance, who never goes out to the cinema or anywhere else and whose only indulgence is smoking?

I can give other examples of this hypocrisy. Why does the Government not target those who drink cola? I saw a television programme recently which showed that one can of cola can adversely affect a person's blood sugar and that regular consumption can cause weight gain and other harmful physical effects. A better example relates to the daily and weekly carnage on our roads. Why do we not tax motorists off the road? Why are we attacking only one section of society? The Tánaiste and Minister for Justice, Equality and Law Reform, Deputy McDowell, can laugh since he does not have to pay for fuel. His motoring costs are met by the taxpayer and he has no understanding of what is going on. Neither he nor the Taoiseach has driven a car in the past ten years. The Minister could not tell me the cost of a litre of diesel because his driver fills the ministerial car to bring him into work in the morning and bring him home at night.

I recognise that smoking is bad for one's health and that smokers' lives are shortened by their habit, but the abuse of alcohol is responsible for more deaths than smoking. We are hypocrites in this regard because we are afraid to tackle the vintners and other vested interests. If the Taoiseach goes to Croke Park next Sunday, one of the first signs he will see will tell him that the all-Ireland hurling championship is sponsored by Guinness. The increase of 50 cent in the price of 20 cigarettes will be a hardship for some elderly people. I would like to vote against this motion but I know my party will not take that approach so there is no point in me getting into an argument about it.

Photo of Michael McDowellMichael McDowell (Minister, Department of Justice, Equality and Law Reform; Tánaiste; Dublin South East, Progressive Democrats)
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Deputy Ring used to have an interest in the all-Ireland championship but that is no longer the case.

Photo of Michael RingMichael Ring (Mayo, Fine Gael)
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I have a major interest in it.

Photo of Bertie AhernBertie Ahern (Taoiseach; Dublin Central, Fianna Fail)
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There is no excise duty on electricity and natural gas. Deputy Ó Caoláin made the point that there is no excise duty on kerosene in Northern Ireland. The reduced VAT rate of 13.5% applies to heating fuels. In many other EU member states, the standard VAT rate is applied.

Deputy Ó Caoláin can be assured that the motivation in increasing the excise duty on cigarettes relates to public health and is designed to discourage smoking. Our calculation is that this increase will lead to a 2% decrease in the volume of tobacco consumption based on what would otherwise be the case.

Photo of Caoimhghín Ó CaoláinCaoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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It is not a significant decrease.

Photo of Bertie AhernBertie Ahern (Taoiseach; Dublin Central, Fianna Fail)
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We did not opt for a greater increase in excise duty because such increases have a major impact on the consumer price index. It is for this reason that the Minister for Finance asked the social partners to consider whether tobacco products should be removed from the goods included in the CPI. He has made this point on more than one occasion, as have I. The impact on the CPI of this increase is 1.46%. Statistics prove that an increase in the excise duty on tobacco products leads to a reduction in the numbers who smoke.

Tax will account for 80% of the price of 20 cigarettes, which seems sufficient. If tobacco becomes too expensive, smugglers will take advantage, as happens in many jurisdictions. We must try to strike the correct balance. The Minister did not increase the excise duty on tobacco products for several years. The price of cigarettes in this State is the second highest in the EU, after the United Kingdom. The overall tax take on a packet of 20 cigarettes, including excise duty and VAT, will be €5.50 after this increase. That is fair.

I understand the Minister was not inclined towards this increase but he listened carefully to the public health arguments. A major campaign was conducted by all the interested organisations, including ASH, which always makes its case at this time of year, the Irish Cancer Society and others. Members on all sides of the House were bombarded with representations from these groups. They passionately believe that the tax element is useful in discouraging smokers. Cigarette prices have increased in the past ten years at a significantly higher rate than the increase in the CPI. The tax-inclusive price of a packet of 20 cigarettes has increased by 80% while the CPI has increased by less than 40%.

Deputy Ring put forward the side of the argument on this issue that is no longer easy to make. There was a time, as Deputy Rabbitte said, when this issue was always the subject of lively debate in this House. There are arguments on both sides but we all agree on the health aspect of it. Fiscal policy is part of the overall health strategy aimed at discouraging smoking.

There are elements other than increased pricing in the health strategy. These include increasing controls on the sale of cigarettes; more prominent health warnings on packets; a prohibition on tobacco advertising and sponsorship of events, including GAA events; a restriction on smoking in public areas and workplaces; and health education programmes as well as actions by health professionals. Increases in tobacco duty have been introduced to ensure tax policy plays a central part in the overall strategy. After today's increase, the price of a packet of 20 cigarettes will be €7.05.

Deputy Mulcahy can be assured rigorous efforts are made to combat tobacco smuggling. This is evidenced from the growing number of seizures and prosecutions made as a result of these efforts. In 2006, until 24 November, 14,044 seizures were made, yielding 46 million cigarettes with a retail value of €14.6 million. That shows the extent of smuggling. Of that figure, 11,974 were made from postal consignments and 1,907 were made in airport seizures, giving a combined retail value of €8.3 million. Seizures at sea ports numbered 163 with a retail value of €6.3 million. To date, 120 prosecutions have been instituted, resulting in fines of €52,675.

Several Members spoke of striking a balance between taxes and price. If the tax was increased by 90%, it would be a huge encouragement to the smuggling brigade. The actual tobacco content and the excise content per thousand cigarettes for the UK is €239.16 while Ireland's is slightly lower at €214.04. Next in the table is France with a much lower figure of €160. In Eastern Europe, Latvia stands at €15.60, Lithuania, €21.90 and Estonia, €33.87. There is an enormous divergence between their figures and ours. One can see the incentive for smuggling as there are large amounts of money involved.

We must hope the other campaigns, such as health promotion, will convince people that smoking is dangerous and is a killer. Large numbers of young people still take up smoking. Price is an important issue and hopefully today's increase will have some impact on young people smoking. A recent survey conducted by the Office of Tobacco Control for the 12 month-period until June 2006 showed a decrease in smoking. Some 24% of the population now smokes compared to 27% three years ago and 31% eight years ago. That is a fair reduction. The same survey gave a breakdown of smokers by age group: 18% of 15 to 18-year-olds; 33% of 19 to 35-year-olds, the dominant group; 22% of 36 to 70-year-olds; and 11% of people over 70 years of age smoke. Deputy Ring can say to his friends who smoke that if they want to reach 70 years of age and over, not smoking will increase their chances. Like all of us, he will want to keep his friends as long as he can.

Photo of Michael RingMichael Ring (Mayo, Fine Gael)
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I know a 90-year-old lady who smokes 40 fags a day and she claims she was never as healthy.

Photo of Bertie AhernBertie Ahern (Taoiseach; Dublin Central, Fianna Fail)
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I thank Members for their support on both resolutions.

Photo of Caoimhghín Ó CaoláinCaoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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On the 2% figure given by the Taoiseach, what does it actually represent? Does it represent the daily smoker who instead of 50-a-day will smoke 49 a day or one fewer cigarette a week? The impact is not as great as one would have wished. For a 50 cent increase in the price and a 2% adjustment in the expected turnover in cigarette and other tobacco sales, it does not seem to be an encouraging return. Other measures must be adopted to ensure the message gets across.

Photo of Bertie AhernBertie Ahern (Taoiseach; Dublin Central, Fianna Fail)
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That is the calculation. A figure of 2% would make a difference. However, it cannot be taken in isolation. This must be brought in with other health promotion elements. The 2% figure will mean 100 million fewer cigarettes being smoked which shows how many cigarettes are smoked every day.

Photo of Emmet StaggEmmet Stagg (Kildare North, Labour)
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Having some knowledge of this subject, I can assure the Taoiseach there is no question of somebody giving up one cigarette a week. However, it will be a good result if 2.5% of smokers give up. I wish I was one of that 2.5%.

Photo of Bertie AhernBertie Ahern (Taoiseach; Dublin Central, Fianna Fail)
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It will be successful if there is a 2% drop in cigarette consumption. Some 100 million cigarettes fewer being smoked is not an insignificant amount. While the yield from excise is large, a greater amount of money goes to the health budget for smoking-related illnesses. The statistics show that the predominant cause of ailments such as heart disease is smoking. Deputy Ring has a point that alcohol and narcotics are damaging but smoking is killing people in large numbers. Sometimes fiscal policy can be used to change such situations. I thank the House for its support for the two resolutions.

Financial Resolution No. 2 agreed to.