Policy Exchange: words fail me, too
Thursday, March 18, 2010 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:
Dear Friend
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
Simon Clark
Simon Clark
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.
Simon Clark
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.
Simon Clark
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!
Reader Comments (53)
Remember all the BILLIONS in tobacco tax money that's supposed to pay for the U.S. federal SCHIP bill? Arizona Cancels SCHIP Program for Lack of Funds. That's exactly what will happen if the Obmaa health care bill passes. CANCELLED! Here is the link: http://www.medpagetoday.com/PublicHealthPolicy/PublicHealth/19133
I have read numbers from 40,000 to 400,000 and not one time has there been any proof to back up any number with a unbiased study. Even when Cigarettes were taxed at .30 cents per pack, the smokers were paying more than could be proven to cost for estimated medical cost.
The reason Tobacco Taxes are so popular is because it taxes a minority and will loose less votes, not because it will bring in more revenue. It’s the, Tax someone else vote.
States have been very disappointed. Of the last 40 states to pass a new cigarette tax only 8 saw a rise in revenue and the others saw as much as a 68% drop. With our new Federal tax there is going to be an even a larger drop in revenue. When will these idiots understand they are taxing poor people into quitting with no hope of generating more income. You cannot hope to increase revenue and drive the very thing you are taxing out of business. This is going to cost the Federal and State Governments the Billions they are hoping to get plus Billions less than they are receiving now. Greed and stupidity are not a good mix. One Senator, on the floor of the Senate, said we will need 22 million new smokers to keep the SCHIP program funded. Without new smokers it will fail within 2 to 4 years. Has anyone noticed that smoking has gone from 54% to less than 20.4%? Looks like the smokers will be joined by all the Non-Smokers in paying for this SCHIP program the Anti-Smokers are so proud of. Then you will hear some real bitching. Being open to others being over taxed comes back to bite you and it will. It’s called Socialism and other ism’s we won’t like.
Increasing Taxes has increased smuggling and the poor are the ones who drive this to keep down that cost. There is a loss in taxes in almost every market.
You cannot hope to increase revenue and at the same time drive down the use of that same product. The only income that will increase, is income to Pharmaceuticals from the sale of Smoking Cessation NRT’s. These are the same companies that fund smoking bans and higher taxes world wide, only because they are the ones that PROFIT.
Teen smoking has leveled off to 5% and has stayed at that level for the past ten or more years. Illegal drug sales to teens are at an all time high. If we can’t control illegal sales, what makes anyone think tobacco sales can be controlled? Wishful thinking alone will not work.
If you do the research, you will find that every disease contributed to Tobacco use is caused by infection, virus and the use of diesel and industrial pollutants with particulates much smaller than that of Tobacco. It’s just not profitable to ban those products. Before the introduction of diesel and the industrial revolution, cancer was almost unheard of.
If smoking has dropped from 54% to 20.4% and cancer and all other diseases said to be caused by smoking has increased it most certainly can’t be caused by Tobacco smoke.
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