The government is missing an important opportunity to cut deaths from smoking, says a committee of MPs who are calling for a cut in the tax on e-cigarettes. They are also urging the government to allow more advertising and to rethink the ban on vaping on buses, trains and in other public places.

A hard-hitting report from the all-party select committee on science and technology says the risk to smokers who continue with their habit far outweighs the uncertainty around the possible harms of vaping. Public Health England has said e-cigarettes are 95% safer than smoking.

“The blunt fact is that 79,000 people in England still die of smoking every year, which is sort of unconscionable, particularly when we know there is the means by which we can reduce the death toll,” Sir Norman Lamb, the committee’s chair, told the Guardian.

The report follows the publication of NHS figures showing the number of people engaging with stop smoking services has fallen by 11%, the sixth consecutive year there has been a drop. The Local Government Association, whose members have responsibility for the services, and the campaigning group Ash (Action on Smoking and Health), say local authorities are not being adequately funded.

The MPs’ report says it is thought that 2.9 million people in the UK are using e-cigarettes to try to stop smoking and “tens of thousands” are successfully quitting each year thanks to vaping.

Lamb, a former social care minister, said he had a particular interest in helping people with mental health issues, whose smoking rates, at about 40%, were higher than the rest of the population.

“It is really shocking that a third of mental health trusts within our NHS ban e-cigarettes,” he said. “When people are patients, it is a golden opportunity to influence behaviour, yet our NHS is failing to follow the evidence.”

‘E-cigarettes are less harmful than conventional cigarettes, but current policy and regulations do not reflect this,’ says Norman Lamb, the chair of the committee on science and technology. Photograph: Linda Nylind/The Guardian

The report acknowledges that not enough is known about the possible harms and calls for more research into e-cigarettes and the “heat-not-burn” tobacco products that are becoming available.

But it dismisses concerns, which have been very vocal in the US, that children will try e-cigarettes, get hooked on nicotine and start to smoke. The US has also seen an outcry over Juul, an ultra-cool brand of e-cigarette that looks like a flash drive and has taken off among schoolchildren. It is now on sale in the UK.

The argument that e-cigarettes are a gateway to smoking “just doesn’t hold water”, said Lamb. Children try them, “but the numbers that continue are tiny”.

The committee is pressing the government to relax the regulations around e-cigarettes, which in many respects are controlled like ordinary cigarettes.

Juul e-cigarettes, which have caused an outcry in the US and are now on sale in the UK. Photograph: PR

“Smoking remains a national health crisis and the government should be considering innovative ways of reducing the smoking rate,” said Lamb in a statement. “E-cigarettes are less harmful than conventional cigarettes, but current policy and regulations do not sufficiently reflect this and businesses, transport providers and public places should stop viewing conventional and e-cigarettes as one and the same. There is no public health rationale for doing so.”

The report calls for the government and the medicines and healthcare products regulatory agency to work with the industry on ways to streamline the process for e-cigarettes to obtain a medical licence so they can be prescribed on the NHS.

It wants to see the rules lifted on the tank size of devices. “The limit on the strength of refills makes some users have to puff harder to get the nicotine they seek and may put some heavy smokers off persisting with them,” says the report.

While Lamb points out that he was a Remainer, he says that Brexit offers an opportunity for the UK to make its own rules on e-cigarettes and not be bound by EU regulations. He wants a review of the ban on “snus”, oral tobacco wads that are banned across Europe with the exception of Sweden, where they are made and where only 5% of people smoke.

“While the report may be seen by some as radical in recommending action to facilitate the use of e-cigarettes, from the point of view of a scientist working in the field it is a welcome and common sense translation of the evidence base into a programme of action. I hope it will have a major impact on the evolution of policy,” said Prof Robert West, the director of tobacco studies at UCL.

Daniel Pryor, of the Adam Smith Institute, said the report was “fantastic news for public health and consumer choice”. Permitting advertising to consumers was an important proposal. “The majority of UK smokers don’t know that e-cigarettes are significantly safer than smoking, and this situation is getting worse,” he said. “Taxing e-cigs and heat-not-burn products based on their relative risk would be a smart move, but contrasts with worrying rumours of a proposed vaping tax from the Treasury.”