Press briefing: US tobacco settlement – what would it mean for the UK
ASH/ Press releases/
|ASH News Briefing – 18 June 1997
US tobacco settlement – what would it mean for the UK?
There are clear signs that the talks between the American tobacco companies and lawyers representing US states could complete this week. ASH has considered the implications of this massive settlement for the UK. It is still impossible to know when or even whether a final agreement will be reached.
The basis of the settlement. In return from immunity from future litigation by individual States and limits on damages paid to individuals, the tobacco companies will agree to pay approx. $15 billion per year to compensate for health costs, and to fund smoking cessation and prevention programmes. There could be restrictions on advertising and promotion and new warnings and packaging restrictions. In addition the companies would accept FDA regulation of nicotine as an addictive drug. The package would require approval of Congress and a special Act to confer the immunity from litigation. The agreement to pay c. $15 billion per year will affect the companies in a similar way to a tax – price will increase and consumers will pay. Though a large sum, this is approximately the same as the amount raised in tobacco taxation in the UK (c. £10 billion) – a country with about one fifth the population. By comparison with the UK regime, the figures in the settlement look much less dramatic.
Sticking points. The main sticking points have been on the question of limits to punitive damages that courts could award in personal injury cases and on the nature of the regulation of nicotine. We will not know the final resolution of these points unless and until the settlement emerges.
UK view. The US situation is very different to the UK. One key difference is the role of Congress. In the UK all the positive aspects of the settlement can be implemented by a committed Government without giving any immunity from litigation in return. In the US, the Republican Congress is a significant brake on the White House’s ability to take action on tobacco. Thus the settlement, which would probably receive support in Congress if supported by the tobacco companies, is one way of securing controls on tobacco that the US Administration might otherewise find difficult. The new Labour Government has said it will ban tobacco advertising, sponsorship and promotion and that it will develop a comprehensive tobacco control programme in a White paper later this year. It does not need to be granted concessions from tobacco companies to do this. In the UK, the money needed to fund health care and cessation programmes can be raised through tobacco taxation – rather than a direct payment from the companies. The ground-breaking component of the US settlement would be the regulation of nicotine as an addictive drug. ASH believes that the UK should also take this approach – again without giving anything away.
International. perhaps the most serious tobacco problem is the aggressive move of companies from declining markets in North America and W. Europe to new markets in developing countries and Eastern Europe. The settlement will do nothing to relieve this situation. The codes of practice, cessation and prevention funding, and compensation provisions should extend to these newer markets, and to funding the WHO. ASH believes that if the industry submits to restrictions in the US, there is a strong ethical case that it should apply such restrictions overseas.
ASH Director, Clive Bates, said: “The UK situation is quite different from that of the USA. We believe that the progressive tobacco control measures in the settlement can and should be adopted in the UK but without giving away anything in return.”
“The UK Government already has the power to raise taxes and take strong tobacco control measures such as banning tobacco advertising and regulating nicotine. We don’t need a deal. There is no need for anyone here to lose their right to sue the tobacco companies for the injury and death they have caused.”
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