Habits: Formula One may win tobacco ban exemption

Advertising of cigarettes in Britain is under a twin threat. One is from the planned government White Paper and Bill, the other from a proposed EU directive. If approved by health ministers next month, the directive could ban not just newspaper and magazine adverts but tobacco sponsorship of sports and so-called below-the-line marketing - special offers to cigarette buyers.

The meeting of officials in Brussels yesterday to hammer out the EU directive takes on greater importance because, for the first time, Britain is supporting the measure. Although some countries - notably Germany, which is worried about losing Formula One motor racing, which relies on tobacco sponsorship - are less keen, a directive seems likely.

This has infuriated the tobacco lobby in Britain, which says the directive simply bypasses consultation and parliamentary scrutiny. The Tobacco Manufacturers Association has just sent its submissions on the White Paper - delayed until the New Year - and fears ministers, particularly the public health minister Tessa Jowell, will fail to understand its case.

Some of the TMA's main arguments are well-known: that their industry is worth pounds 10bn a year in tax to the Treasury, that 10,000 UK jobs depend on it, and that it helps the balance of payments by pounds 600m.

But it also points out that a ban on advertising will have two effects, which will both have the reverse effect to what the Government intends - less smoking among the young.

They say the ban will make companies more price-sensitive, reducing the price of cigarettes and making them more accessible for teenagers. The industry believes smuggling of cheaper European cigarettes, already a steady flow, will become a flood - again meaning cheaper cigarettes with no tax benefits to the Treasury.

"Ministers just simply don't get it," said an industry source. "We do at least understand how the cigarette market works and what the likely effects will be." Whatever the merits of its case, its failure to get its message to the Labour Government is almost entirely the industry's fault. A source admitted: "For 18 years we had been living under a comfortable regime with the Conservatives and singularly failed to realise where the next government was coming from. There are very few points of contact now." The fact that industry representatives were not invited to July's tobacco summit merely underlined its isolation.

Belatedly, some companies are trying to bring in new personnel who have closer links or understanding of how Labour works. One of their efforts is to highlight perceived differences between health ministers and Treasury ministers over the loss of potential tobacco revenue; they believe Gordon Brown is becoming concerned at public-spending implications.

They are also targeting the effects on jobs in places such as Bristol, Northern Ireland and the North-east and the potential sporting public backlash if Britain lost its Formula One grand prix, as motor-racing officials are believed to have warned Tony Blair. However, the industry's arguments are still falling to impress ministers. "Our main concern is public health," said a spokesman for the Department of Health. "In every country where advertising has been banned, consumption has gone down."