Labour warned it could spell death of the corner shop with new controversial bill

Labour has been accused of delivering the "nail in the coffin" for local shops with a crackdown on tobacco and vape sales. The Tobacco and Vapes Bill aims powers to introduce a licensing scheme for the retail sale of tobacco, vapes and nicotine products in England, Wales and Northern Ireland.

Any scheme would likely require an initial application cost, as well as an annual charge, similar to alcohol licensing, as well as staff and enforcement schemes. Some fear such charges and costs could spell disaster for already struggling local corner shops. The Treasury is already facing a £2.6 billion black hole from revenue from tobacco sales as increasing enforcement around the habit has led to a growth in illicit sales. Official figures show that at least 14.5% of the market is now taken up by illegal sales.

And it's law-abiding corner shops and council tax paying residents who could be paying out for the new Labour Bill as new research has found more than 20 local authorities with the highest levels of illicit tobacco use have made no plans on how to resource, fund, or staff the new licensing system when it comes into force.

Freedom of Information (FOI) requests were sent to 60 councils to assess their readiness for the changes, which will require local government to issue licences to tobacco sellers like alcohol vendors across the UK for the first time.

However, 55% failed to respond, while many that did admitted they lack readily available enforcement data. The councils targeted were selected due to known illicit tobacco problems, with documented seizures and prosecutions.

Of the 27 councils that responded with answers, 92% said they had not begun preparing for the imminent licensing system, which will require all tobacco sellers to register under a regime similar to alcohol licensing.

Only one council was able to provide their budget for alcohol licensing, and none, at the time of asking, have set aside a dedicated budget for enforcing the new tobacco licensing regime.

Andrew Boff, Conservative Londonwide Assembly Member, said increased licensing has already been shown to affect business badly and more legislation to pay for could be the "nail in the coffin" for local shops.

He told Express.co.uk: "Recently we've seen licensing schemes for private landlords and the result has been a massive drop in private landlords, because it's no longer worthwhile for some of them to do business. Another licensing scheme which has quite clearly not been thought out is just going to be a death knell for a lot of businesses.

"It will be another thing small businesses will have to pay out for, the local authorities have to enforce it, and that is more money on the council tax to do that. It's indicated from the research this is going to be an additional cost for most local authorities.

"The costs on small businesses are going to be appalling, and these people operate on very small margins.

"Once again the Government is rushing through legislation without thinking of what the impact is going to be on small businesses, Councils and consumers just to earn a health brownie point.

"Their focus should be on irresponsible vendors who are selling this drug to children or those pedalling counterfeit cigarettes, not on penalising honest traders.

"Local authorities need funding for these new responsibilities and without it will only boost the black market in tobacco. We know that tobacco use was naturally declining amongst the general population and has been for years.

"But as a result of Government meddling, a flourishing black market has sprung up that has no qualms about how it makes money, reversing the public health effort that has been made.

"I urge the Government to pause implementation of the bill, scrap the plans to ban disposable vapes and perhaps follow New Zealand's example of helping people to quit by making available Vape Starter kits to smokers. That would help more people to give up smoking than any nanny state regulation."

Dr Christopher Snowdon, Head of Lifestyle Economics at the Institute of Economic Affairs, told Express.co.uk any increased costs incurred for local businesses "could be the death of the law-abiding corner shop".

"The government is driving millions of people towards the black market and leaving local councils to pick up the pieces.

"The tsunami of illicit sales caused by excessive tobacco duty will grow even bigger in June when disposable vapes are banned. No amount of enforcement can put this genie back in the bottle.

"High taxes and over-regulation have led to a black market with no regulation and low prices."

The new research also found that only seven councils (less than a quarter of respondents) could provide an estimate of their annual spending on tackling illegal tobacco over the past five years, often bundling figures with alcohol enforcement.

Eight councils—including Lambeth, Hammersmith & Fulham, the City of London, Waltham Forest, Bournemouth, Coventry, Wolverhampton, and Liverpool—reported spending nothing on illicit tobacco enforcement in the last five years.

The median annual spend among councils was just £28,350—less than the cost of employing a single full-time enforcement officer.

Of the 60 councils approached, only Glasgow, Wolverhampton, and Camden indicated that any preparation was underway for the new licensing regime.

Greenwich Council’s response highlighted the potential scale of the challenge, reading: "There are an extensive number of businesses engaged in the retail sale of vapes and tobacco products. This is currently far greater in number than premises licenced to sell alcohol."

Brent Council saw a dramatic drop in tobacco inspections, from 60 in 2022 to just 4 in 2023, despite rising concerns about illicit sales, and Liverpool City Council, despite seizing hundreds of thousands of illicit cigarettes over five years, reported zero prosecutions during that time.

The City of London made no seizures, imposed no fines, and conducted no investigations into illicit tobacco over the past five years.

In their response, Nottingham City Council highlighted ongoing uncertainty about the Bill, stating: "We do not yet know the number of premises that will require licensing, the specific requirements, the costs involved, or whether funding will be provided. Until we have this information, we cannot forecast the cost or plan implementation."

The bill, in its current form, allows licensing authorities to impose fees for granting a licence, raising concerns that the cost of the new licensing regime could be passed on to small businesses.

Under HMRC's Track and Trace (T&T) legislation, all businesses involved in the manufacture, distribution, or retail of tobacco must be registered. Those who fail to comply face a range of sanctions, including fines of up to £10,000 and the potential revocation of their business registration.

This comes as local authorities face mounting financial strain. Research suggests nearly a quarter of councils in England are in severe financial difficulty, with a 22.2% real terms cut in core spending power since 2010/11. A Local Government Association survey last autumn found that one in four councils expects to apply for emergency government bailout agreements to stave off bankruptcy in the next two years.

The Ministry of Housing, Communities and Local Government has been approached for comment.

Cllr David Fothergill, Chairman of the Local Government Association’s Community Wellbeing Board, said they supported the Bill.

He said: “Local government has led the way tackling the harms caused by smoking, whether that is calling for a ban on smoking in public places or funding smoking cessation services.

“We fully support the Tobacco and Vapes Bill, which is a progressive piece of legislation that will reduce smoking and rates of smoking-related disease.

“Ahead of the tobacco licensing scheme being introduced beyond January 2027, the Government should be clear on what additional funding is set to be made available to Trading Standards departments to enforce these important regulations.

“The success of this legislation will be dependent upon the ability to enforce it, and it is therefore crucial that councils receive adequate funding and resources to be able to do this.”