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Tobacco Companies Plan To Sue Future Labour Government for £11bn

Major tobacco companies may sue a future Labour government for £11bn if Shadow Health Secretary Andy Burnham pushes ahead with his plan for plain packets for cigarettes. Under the scheme, brand names would be removed from packets, which companies argue represents theft of intellectual property.

Mr Burnham claimed he wants to make children born in 2015 the first “smoke-free generation” by introducing plain packaging laws, similar to those already in place in Australia. The Labour front bencher accused the tobacco industry of employing “increasingly sophisticated methods” to recruit young people as smokers, and said children needed “better protection” from them.

Under the European Tobacco Directive, the British government does have the right to bring in plain packaging after March 2016 but the Convention on Human Rights also protects intellectual property rights. This means that any removal of the brands would have to be properly compensated. A report by the French bank BNP Paribas has suggested the industry should seek up to £11bn in compensation.

One industry insider told Brietbart London: “There is no way tobacco companies are going to allow Andy Burnham to take their brands away from them without proper compensation.  Australians have already done this and it hasn’t cut smoking. Its pushed people from premium cigarettes to buying larger numbers of cheaper alternatives. That has cost companies a lot of money whilst also increasing the number of cigarettes smoked.”

Kate Andrews, communications manager at the Adam Smith Institute agreed, telling City AM: “Meddling in people’s lifestyle choices can backfire: in Australia, the only country to have tried plain cigarette packaging, household expenditure on tobacco has actually increased, and there is mounting evidence that smokers have turned to even more harmful black market products.”

In addition to the £11bn the industry may take through legal action, BNP Paribas also estimate the Exchequer could lose £2bn in tax as smokers switch to foreign cigarettes, which would still be branded.

The plain packs feature blood curdling pictures of diseases that can result from smoking (pictured). The images are designed to discourage consumers from wanting to buy them, but in Australia that has encouraged smokers to seek out foreign and counterfeit alternatives that still have branded packaging.

Last year Priti Patel led a group of 50 Conservative MPs opposed to plain packaging. At the time she told the Daily Mail: “It is completely mad. Plain packaging is a blunt instrument which will have a disproportionate impact on independent retailers. All this will do is that it will boost the number of illicit cigarettes, meaning it will actually be easier for children to purchase them.”

Andy Burnham made the announcement today as part of his new policy designed to make the nation healthier.

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