Small shop leaders have welcomed a new government inquiry into tobacco smuggling.

The Home Affairs Committee yesterday revealed it was looking at what could and should be done to reduce and disrupt the illicit trade in the UK.

Tobacco smuggling is estimated to cost the UK taxpayer as much as £2bn a year.

The inquiry will look at why the number of arrests, prosecutions and convictions for tobacco smuggling have fallen over the past three years; why Border Force failed to meet its operational targets for tobacco seizure in 2012/2013; and the possible impact of the introduction of plain packaging in Ireland on the quantity and availability of illegal tobacco in the UK.

Keith Vaz MP, chair of the Committee, said: “The UK has one of the highest rates of tobacco duty in the EU, which makes it one of the most lucrative markets for smugglers. The role of Border Force is therefore vital in reducing the supply of illicit tobacco. We will be looking at the scale of the problem and what more can be done to tackle it.”

The National Federation of Retail Newsagents said it was pleased the government had “woken up to the fact that smuggling and counterfeit tobacco is a massive problem”.

“We have been calling for the government to take action for some time so we are pleased to hear that steps are being taken to address this problem and we look forward to sharing our concerns with committee members,” added national president Colin Fletcher.

Association of Convenience Stores CEO James Lowman added: “It is not good enough that the government has missed its own targets for reducing tobacco smuggling this year.”

“It is time for a rethink about the resources available to police and trading standards in prioritising the detection and closing down the criminal operations that blight our communities and damage the livelihoods of legitimate retailers.”

The Committee is now asking for written submissions from interested parties, with a deadline of 29 August.

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