These days, when one looks back at the stratospheric rates of income tax levied in the 1970s it’s commonplace to sympathise with those who sought to avoid such punitive taxation. If you were subject to such rates then you’d do your best to limit your exposure to them wouldn’t you? Of course you would.
Something similar may now be said about the levels of tax imposed upon alcohol and tobacco. More than 75% of the cost of a packet of cigarettes goes to the Treasury. It’s hard to think of many other products punished so severely.
And we all know, I think, that tobacco taxes are going to increase regardless of this election’s outcome. It’s for our own, and the country’s, good you understand and anyway won’t you please think of the poor beleaguered suffering children?
Nevertheless, it’s a bit of a surprise to see a supposedly right-of-centre think tank calling for ever more punitive rates of taxation to be levied upon the country’s long-suffering (in terms of tax, not their habit) tobacco enthusiasts. But this is what Policy Exchange have duly done.
Oddly – by which I mean not at all oddly – their proposal for a 5% increase in the cost of a packet of cigarettes is pretty much identical to recent proposals from the buggers at ASH. Then again, Henry Featherstone, author of the PE "report" seems to be in cahoots with ASH if his attendance at their events and agreement with their views is anything to go by. It’s like asking a PETA sympathiser to write an "independent" report into beef consumption and then asking us to take their findings seriously. (Since at least some of PE’s figures appear to be based upon ASH’s "research" this analogy is entirely valid.)
Policy Exchange claim that while tobacco receipts contribute £10bn a year to the Treasry every cigarette smoked in Britain actually costs the state 6.5p. That is, the "true" cost of smoking is £13.74bn. Even a cursory examination of their claims reveals, however, that these figures might as well have been scribbled on the back of, well, a fag packet.
Smoking breaks, for instance, apparently account for £2.9bn a year in lost productivity – a number that, quite plainly, is plucked out of anorexic air. The logic of this, mind you, is that, were one to believe the numbers, there’d be a £2.9bn increase in productivity if smoking were no longer prohibited in work places.
But let’s take it a little further: how much do loo breaks "cost" the "country" each year? Plenty I guess and perhaps something more than £10bn a year? The obvious solution is to make the wearing of adult nappies mandatory in the workplace. Think of the productivity gains, not to mention the stimulus to the adult nappy manufacturing and distribution business. Everyone wins!
Happily Dick Puddlecote has saved me the trouble of going through this nonsense in too much detail:
Like others, I found the most surprising stat to be the relatively small £713m accredited to "the loss of economic output from the deaths of passive smokers". So, on finding the report, I started at that bit.
PE’s figure was based on notional deaths of 7,700 ‘passive smokers’ at a cost of £92,500 each! Per year. Quite how they came to the conclusion that each phantom death cost the country that much money, they don’t say. But the loss of output arising from the death of smokers (£4.07bn per year) is even more incredible.
In the 35-39 age range, for example, they assessed that the number of employed smokers to have died was 648 in 2008 … resulting in a loss to the country of £470m … £725,000 each!
Now, I can imagine they might have a point if they meant this to reflect a lifetime loss, but no. There on page 17 is the breakdown of the £13.74bn per year figure, with the rounded £4.1bn included.
I recommend his entire post, not least because of the evidence he brings showing that PE could seem to be close to shilling for a particular anti-smoking drug and the fact that much of it appears to be based upon "evidence" that has already been discredited or that should have been so dismissed.
Needless to say, Policy Exchange never consider the fiscal benefits of smoking – some of which are laid out by Mark Wandsworth here – not least in terms of dying younger and foregoing pension entitlements. Then there’s the fact that most smoking-related deaths are, to be brutal, cost-effective deaths. There’s not much that can be done and few expensive procedures or miracle drugs that can help you. A rational (in economic terms) government would encourage smoking.
And nor, of course, do our pals at Policy Exchange put any monetary number on the value of the enjoyment smoking brings or of the boost in productivity and creativity and so on this could bring. Following their methodological example, however, I’ll estimate that at another £10bn a year.
Featherstone says he would have "no problem" with taking money from ASH. Which is fine and his prerogative (though one wonders whether he’d be happy to take tobacco money?). But he then claims:
Let’s be clear: I think a campaign which aims to reduce the number of pointless, needless, deaths is a good thing rather than a bad thing. It means thousands more families don’t have their loved ones snatched away in the middle of their lives. Perhaps you disagree that it is a good cause. If so, why?
Because I don’t believe that a tobacco-related death is any more "pointless" or "needless" than any other death and because I believe that people should have the freedom to make their own choices free, generally speaking, from government-sponsored coercion and because I can’t stand the use of the mawkish term "loved ones" and because, actually, most of those people who die tobacco-related deaths don’t do so aged between 35 and 55 but perish at an age our great-grandfathers would have found miraculous and because, well, I think this whole report is utterly bogus and, as James Delingpole says, the sort of thing that one would expect to be producd by some ghastly Big-Nanny-Big-Bully-Quango.
Long-time readers and friends know that I have an interest here – having been Lady Nicotine’s companion for most of my life – but smokers should be proud not cowed for their contributions to this country, even if the Treasury’s actions make it entirely reasonable to seek (legally of course!) one’s supply of tobacco from other, less barabarous, jurisdictions.
So, yes, smokers are patriots. To hell with Tea Parties; what we need are Tobacco Parties.
UPDATE: Chris Snowden – whose book you should buy – chimes in and I recommend you read what he has to say too. See also Angela Harbutt at Liberal Vision and an excellent post from Mark Littlewood at the IEA. As he says, this is real road to serfdom stuff.
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