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Wednesday
Nov222017

The Budget, then and now

As a small child my heart sank on Budget day.

In those days we had a black and white TV that offered a choice of BBC1 or ITV.

We rarely watched ITV because to do so meant retuning the TV. To do this you had to get up and rotate a plastic dial on the front of the set.

Although this was simple enough there was no guarantee that the quality of the picture would stay the same, so it was best left as it was, permanently tuned to BBC1.

Anyway, I’d come home from school expecting to watch the usual children’s programmes only to find that BBC1 had been commandeered for extensive analysis of the Budget while the shows I wanted to watch had been moved to BBC2, which we didn’t have.

Every year the Budget is a reminder of the disappointment I felt as a child.

Today’s statement is of course the second one this year following Philip Hammond’s decision to move the Budget from March to November.

There has already been one hike on tobacco duty this year (inflation plus two per cent) and today could see another which would allow Britain to leap frog Ireland and reclaim its position as the most expensive country in Europe to buy tobacco.

Some are arguing it would be a third price rise following the EU-inspired ban on ten packs that forced smokers to buy the larger and more expensive packs of 20.

In advance of the new Autumn Budget Forest has been lobbying the Treasury to reject a further tax increase on the not unreasonable grounds that it would unfairly target the less well off, including those who, in the words of Theresa May, are “just about managing”.

A paper published by Forest last month revealed that tobacco duty costs the poorest households 2.3 per cent of their disposable incomes compared to 0.3 per cent in the wealthiest households:

Measuring expenditure on tobacco duty as a percentage of disposable income, in 2015/16 tobacco duty cost the average household in the lowest income bracket almost eight times what it cost the average highest earning household.

Although the average household among middle earners spent 38 per cent more on tobacco duty than the poorest households, as a percentage of disposable income the poorer households were still worse off.

A subsequent poll, commissioned by Forest and conducted by Populus, found that 76 per cent of adults thought the current level of tax (over 80 per cent on an average packet of cigarettes) is either about right (44 per cent) or too high (32 per cent). Only 24 per cent (one in four) thought it was too low.

A huge majority – 68 per cent – also thought that buying illicit tobacco was an "understandable" response to the soaring cost of tobacco purchased legally. Only 22 per cent found it "not understandable".

That’s not to say they condone it but it’s clear that purchasing illicit tobacco doesn't carry the stigma associated with most other offences. As a result many otherwise law-abiding people will happily buy black market tobacco without a care in the world and the evidence that they’re doing that is overwhelming.

According to a recent TMA survey, nearly three-quarters of smokers in the UK have avoided paying tobacco duties, some more regularly than others:

  • 72.5 per cent or around seven million smokers have bought tobacco from sources where UK taxes won’t be paid including illicit tobacco and from abroad
  • 41 per cent of smokers have bought tobacco from illicit tobacco sources
  • Smokers on higher incomes (over £60,000) were as likely to buy illicit as those on low incomes (under £6,000)
  • Smokers are stockpiling cheap or illicit tobacco with 53 per cent of cigarette smokers buying 200 or more when they buy from sources that won’t have paid UK tax.

As a result of its anti-tobacco policies the Treasury forfeits billions of pounds in revenue while the cost of combatting smugglers and criminal gangs continues to rise.

Children, of course, are particularly vulnerable to the sale of illicit tobacco, hence the rank hypocrisy of anti-smoking activists who lobby government to raise taxes further while shedding crocodile tears for children who smoke.

Equally nauseous is their persistent claim that smoking pushes people into poverty, ignoring the fact that a concurrent factor is the punitive level of tobacco duty that unfairly targets those who can least afford it.

(Tobacco control campaigners like to have their cake and eat it. On the one hand they say smoking is seriously addictive, on the other they want to punish smokers who find it hard to quit.)

If anyone is guilty of forcing more smokers into poverty it’s the truly despicable tobacco control industry.

We’ll find out later today whether the government intends to intensify the war on smokers or give them the smallest of breaks, as Forest has been calling for.

Before then, if the Chancellor has any doubts about the wisdom of a further increase in tobacco duty, he should read the tweets below. Nuff said.

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Reader Comments (4)

Yes always best to buy abroad now. Much more choice, no plain packaging, and no bank rolling the disgusting victimisation of smokers. Plus of course a nice holiday.

Wednesday, November 22, 2017 at 12:20 | Unregistered CommenterTimothy Goodacre

The govt knows the less well off are easy to push around and force to crimnal markets which makes the job of criminalising law abiding people with general public consent easier.

Make no mistake. Criminalisation of the consumer is what govt intends.The hate campaign has geared up a lot over the last few years.

Wednesday, November 22, 2017 at 13:17 | Unregistered CommenterPat Nurse

Can you not buy it from a cheaper EU state and have it posted to your UK address?

Wednesday, November 22, 2017 at 19:07 | Unregistered CommenterDr Evil

Raising tobacco taxes to the extremes currently in vogue is an oppressive exercise that benefits organised crime. This regressive taxation punishes smokers (especially those with lower incomes) and stimulates the growth of illicit markets.

The tobacco controllers advocating this must know that organised crime is a significant source of violence and corruption. Indeed many public health researchers view gangs and mafia violence as a public health concern. Obviously they place more value on their ideological aversion to tobacco than public safety and health.

Wednesday, November 22, 2017 at 19:22 | Unregistered CommenterVinny Gracchus

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