Last year, at the Conservative party conference in Manchester, I was a panellist at a fringe meeting organised by the influential Conservative think tank Policy Exchange (see HERE).
My words obviously carried some weight (I'm being sarcastic) because Policy Exchange has today joined ASH in calling for a five per cent increase in tobacco taxation.
In an email to supporters, Neil O'Brien, director of Policy Exchange, writes:
Whilst tax on tobacco contributes £10 billion annually to the Treasury coffers, the true costs to society from smoking are far higher, at £13.74 billion, think thank Policy Exchange’s latest report finds. This cost is made up of the cost of treating smokers on the NHS (£2.7 billion) but also the loss in productivity from smoking breaks (£2.9 billion) and increased absenteeism (£2.5 billion); the cost of cleaning up cigarette butts (£342 million); the cost of fires (£507 million), and also the loss in economic output from the deaths of smokers (£4.1 billion) and passive smokers (£713 million).
The report, Cough Up, calculates that of this £13.74 billion, cigarettes – which comprise 93.3% of the tobacco market - cost us £12.82 billion a year. Currently, a pack of cigarettes costs just £6.13. But this would need to be increased to at least £7.42 for cigarettes to be revenue neutral to society and their true cost reflected by their price.
Henry Featherstone, Head of Policy Exchange’s health and social care unit and author of the report, said:
“Smoking is the single, largest preventable cause of serious ill health and kills tens of thousands of people in England every year. It is a popular myth that smoking is a net contributor to the economy – our research finds that every single cigarette smoked costs the country 6.5 pence. In order to balance income and costs, tobacco duty should be progressively increased until the full societal cost of smoking is met through taxation.
“As a start, the next Budget should increase tobacco duty by 5 per cent – this will reduce tobacco consumption by 2.5 per cent, and provide an additional £400 million for the Treasury. A proportion of this extra revenue should be put towards helping people quit, and in particular reaching hard-to-reach groups like pregnant teenagers. Targeted action like this would help reduce England’s growing health inequalities, whereby those on lower incomes suffer more ill health, which can largely be attributed to smoking.”
In the words of Julian Harris, director of Liberal Vision, "Words fail me."
Click HERE for a full copy of the report. Cough, splutter.
H/T Julian Harris
Rob Lyons has written about a related issue on Spiked! HERE:
"This tax on fizzy drinks stinks: whether it is cigarettes, booze or soda, it’s not the place of the taxman to dissuade us from our enjoyable bad habits."
I couldn't agree more.
20:05 ... Matthew Sinclair of The Taxpayers Alliance sent me THIS link this afternoon but stupidly - although I acknowledged it - I didn't read it because I was busy and I was thought it was a link to the original post on ConservativeHome by Policy Exchange's Henry Featherstone.
Please read it because it is in fact an excellent response to Featherstone's piece. (And how encouraging that a high profile lobby group with a genuine desire for less government has come out fighting on the subject.)
In fact, I'm delighted to see Policy Exchange taking a hammering this evening - on ConservativeHome and elsewhere. Great piece too by Dick Puddlecote. Click HERE.
I wonder if Neil O'Brien, director of Policy Exchange, is aware of the terrible damage a report like this has done to Policy Exchange's reputation in centre right circles. I won't forget it in a hurry, and nor will a lot of other people.
James Delingpole has written this blog post on the Telegraph website: Is Policy Exchange the most loathsome think tank in Britain?
This is fast becoming a public relations disaster ... not just for Policy Exchange but for what Delingpole calls "Cameron’s progressive Conservatives". Hilarious!