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Monday
Nov062017

Tax and tobacco

The Autumn Budget is only two weeks away.

As you probably know the Chancellor has switched the Budget from spring to autumn. It means therefore that taxes on tobacco could rise twice this year.

A couple of weeks ago we published a short document that highlighted the way increases in tobacco duty discriminate unfairly against households on low incomes. (It's not rocket science but it still needs to be pointed out.)

This morning we published the results of a poll conducted last week on another Budget-inspired theme:

The survey, conducted by Populus for Forest, found that 76 per cent of adults think the current level of tax – over 80 per cent on an average packet of cigarettes in the UK – is either about right (44 per cent) or too high (32 per cent). Only 24 per cent (one in four) think it's too low.

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

Simon Clark, director of Forest, said: "Tobacco duty in the UK is exceptionally high compared to most other EU countries.

"Another tax hike will discriminate against the less well off and those who are just about managing.

"It will also encourage more smokers to buy tobacco on the black market because there isn't the stigma associated with other illicit transactions.

"We urge the Chancellor to give smokers a break, take public opinion into account and freeze tobacco duty at the current levels."

In a more pragmatic, less censorious world the government would reduce tobacco duty to a fairer level but it's unrealistic to think the Chancellor will succumb to common sense, hence our call for a tax freeze.

See Tobacco tax: give smokers a break, says Forest.

Inevitably the tobacco control industry takes a very different view and is calling for further tax hikes, but what really sticks in the throat are the crocodile tears concerning their position on illegal tobacco.

Take Fresh (formerly Smokefree North East). According to their website:

Illegal tobacco has helped over half of underage smokers in the North East get hooked on smoking, a new survey released today suggests.

55% of children aged 14 and 15 who smoke say they buy illegal tobacco from sources like "tab houses" and shops - while 73% say they have been offered illegal tobacco.

The figures, from the 2017 North East Illegal Tobacco Survey, are released as Fresh launches the new 'Keep It Out' campaign aimed at helping the public to spot illegal tobacco, report it and to encourage smokers not to buy it.

How hypocritical is that? If it wasn't for punitive taxation on tobacco, a policy Fresh supports, there wouldn't be a thriving black market in tobacco and there would be far less risk of children getting their hands on cigarettes.

But the group isn't content an increase in tobacco duty alone:

Fresh is calling on the Government to introduce a licensing system for tobacco manufacturers and retailers to provide funding for improved enforcement and other measures to reduce smoking prevalence. The measure would be popular in the North East with 76% of adults strongly in favour of businesses needing a valid licence to sell tobacco.

Aside from the fact that the cost of a licensing system would almost certainly be passed on to the consumer (forcing more smokers further into poverty or towards the black market), what could Fresh possibly mean by "other measures"?

My guess is that "other measures" include more funding for parasitic groups like Fresh because that's the Kafkaesque world we live in.

More funding means more campaigns like 'Keep It Out' in which a tobacco control group 'helps' the public "to spot illegal tobacco, report it and encourage smokers not to buy it" while lobbing government to increase taxes that inevitably push consumers towards the black market.

Wilfully ignorant or in denial about the irony of their position, Fresh declares:

As well as helping children to start smoking, people supplying illegal tobacco are often involved in drugs or loan sharking. Buying it means supporting crime and can bring children into contact with criminals.

For crying out loud! Punitive taxation drives illicit trade. How hard is that to understand? If there's a single group that's supporting crime and bringing children into contact with criminals it's tobacco control campaigners and their counter-productive policy on tax.

See Illegal tobacco bought by more than half of teenage smokers (Fresh).

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Reader Comments (7)

We warned them they were taking tobacco sales and sensible restrictions to stop kids smoking from legit and responsible shop keepers and handing our kids over to criminals instead who now control the market but they refused to listen.

They need more money for their own funding and salaries. The children are only useful to them if they can be used to get that money.

The tobacco control industry has put our kids in danger. Govt must stop listening to them

Monday, November 6, 2017 at 14:24 | Unregistered CommenterPat Nurse

One of the problems with buying tobacco from dubious sources is that you don't know what you're getting. All you can see are a load of photo-shopped images of medical pornography. At least with a black market supplier there's a good chance of informative packaging. Of course the information might be wrong but then PHE are hardly honest either.

Monday, November 6, 2017 at 17:52 | Unregistered CommenterTony

Exorbitant tobacco taxes punish smokers and drive demand in the illicit market. Tobacco control extremists refuse to recognize this basic economic fact since their enterprise is funded through this extortion. Tobacco control's fraud must be stopped.

Monday, November 6, 2017 at 18:00 | Unregistered CommenterVinny Gracchus

The man [Craig Kelly] leading federal parliament’s investigation into illicit tobacco is a rabid anti-smoker.
“I can’t stand cigarettes,” says Liberal MP Craig Kelly, chairman of the joint committee on law enforcement. “When it comes to fanatical nonsmokers, they could give me a badge.”
“I have grave concerns that we’re trying to attack this issue through taxation,” Kelly says. “Like many things we do in government, the unintended consequences can be worse than the problems we’re trying to overcome.”
The Gillard government introduced plain packaging in 2012 and dramatically escalated tobacco excise, implementing yearly rises of 12.5 per cent each September 1 for the next four years. The Turnbull government extended the annual excise hikes in this year’s budget until 2020.
Despite his concerns, Kelly acknowledges price should still play a role.
“You have to have some price pressure,” he says. “You have to have the strongest possible law enforcement. You’ve got to make lepers of those that smoke… make their lives horrible.”

So Kelly is a rabid antismoker (i.e., prohibitionist) that thinks it's the government's job to turn smokers into "lepers", their lives made horrible by an ever-growing raft of government punitive measures. It's an appalling state of affairs:
http://www.smh.com.au/federal-politics/political-news/people-will-die-due-to-renewables-turnbull-government-mp-craig-kelly-20170712-gxa78z.html

When it comes to tax on tobacco in Australia, it is no small matter. It's not some price pressure. We're well into the realm of insanity. In Australia, politicians of all persuasions have voted unanimously to hike an otherwise $5-6 pack of cigarettes to $25+. By 2020, with further tax hikes each year between now and then, that $5-6 pack will be artificially inflated to $45+, most of the retail price going straight to government. The extent of the extortion.... the robbery... is staggering; it's the stuff of madness.

Tax on tobacco is not rocket science. Inflate the price too high and it becomes de facto prohibition for those of low income. It's an open invitation to an "alternative supply", referred to by the government robbers as "illicit". They were warned time and again years ago of this simplicity, advice that they have long disregarded, hiking tax on tobacco into "twilight zone" levels. And yet here are these top-shelf tossers now contemplating what they are to do about a flourishing "illicit" market.

It is government of the last few years advised by prohibitionist tossers from a variety of "charitable" organizations (e.g., cancer councils) that are singularly, solely to blame for an illicit market in tobacco. Every time there is a seizure of illicit tobacco, the spotlight should go straight onto government and the Public Health unintelligentsia; they created this entirely foreseeable, preventable problem. Who's the biggest criminal getting the largest cut by far from tobacco? It's the government.

It's fully to be expected when prohibitionists are given a red-carpet ride by government. Prohibitionists are not the brightest of people. They are not good at history, or economics, or science, or human nature, least of all their own considerable foibles. Let them loose on a society with government approval and they will make, at the very least, the same disastrous mistakes as their prohibitionist forbears. The only important thing for prohibitionists is prohibition. Nothing else matters. Although they typically wreak havoc, prohibitionists never consider that any prohibitionist conduct ever has any detrimental consequences. When detrimental consequences are undeniable, prohibitionists simply view them as acceptable "collateral damage" or having some other "mystical" source. Look at the article in question. The morons from the cancer council are now claiming (after long denying that an illicit market even existed) that a flourishing illicit market has nothing to do with baseless, punitive taxes that in Australia are eye-wateringly into the stratosphere:

In its submission to the tobacco inquiry, Cancer Council Australia says increasing excise is “the single most effective method available for reducing tobacco consumption, increasing attempts to quit and reducing smoking prevalence, thereby reducing death and disease caused by smoking”.

“Cancer Council Australia is not aware of any evidence suggesting that increases in excise in Australia have led to an increase in the size of Australia’s illicit tobacco market.”

This is standard distancing crap from the creators of problems. There is no reasoning with this inanity. Yet it's such agenda-driven bunkum that's driving public policy and laws in Australia. The collusion between the rabid fanaticism of prohibitionism and greedy government has produced a dangerous stupidity, something entirely predictable.

Tuesday, November 7, 2017 at 1:20 | Unregistered CommenterAppleby

Mention must also be made that the prohibitionist pressure, including eye-watering taxes on tobacco, comes predominantly from the unelected, unaccountable UN agency, the World Health Organization, e.g.,
https://www.theguardian.com/world/2017/jul/12/nations-that-cannot-fight-tobacco-industry-should-raise-taxes-says-who

There is a string of unelected, unaccountable organizations and individuals (billionaires such as Bloomberg and Gates) that are pushing prohibition. See comments by "Some History" here:
http://catallaxyfiles.com/2016/02/26/what-is-it-with-government-and-dodgy-regressions/comment-page-1/#comment-1958462

These are responsible for a flourishing contraband trade in tobacco and the leperization of smokers. These prohibitionist miscreants typically disavow any responsibility for their dastardly handiwork. As can now be seen in their addressing of the "illicit" trade which they created, they now call for more enforcement. Their derangement pushes a nastier and nastier line until ordinary citizens are made criminals and with associated escalating punishments. It's all terribly sick and predictable, yet, here we are.

Tuesday, November 7, 2017 at 1:42 | Unregistered CommenterAppleby

Extremely well expressed and demonstrably accurate Mr Clark. "Punitive taxation drives illicit trade" - utterly correct, as does the unimaginative prohibitionist health cultist mindset, which seems to have infected the globe.

The Australian situation, as meticulously described above in the comments by Appleby, is beyond belief, with smoking banned almost everywhere, and taxes approaching the obscene level of $1000AUD (582GBP) per kilogram.

I too noted the rabid unbalanced anti smoker comments attributed to member of the Australian Parliament the rather obese Craig Kelly. Wait for the Mac Attack tax Craig old matey, you will be one of the first targets, for your non government sanctioned high fat diet low exercise lifestyle. The floggings will continue until morale improves.

I wrote to the parliamentary committee on law enforcement, currently inquiring into "illicit" tobacco, stating the views expressed by Mr Kelly call into question his objectivity, and ability to act impartially in representing all constituents. I suggested Mr Kelly should be recused from his committee position for advocating hatred of and discrimination against smokers (treat them like lepers - try substituting any other minority and prepare for immediate public execution by the perpetually offended).

I also pointed out that the increasing duty NOT paid tobacco market in Australia is solely a problem of the government's own making, from hyper regulation imposing smoking "cures", lobbied for repeatedly with money stolen from smokers by the monomaniac gloomy apostles of Wowserism.

The committee secretary sent a nice letter in fetching parliamentary livery acknowledging receipt, yet I predict Kelly and similar unsophisticated virtue signalling blowhards will propose more of the same (plain packs which are far from plain vehicles for social engineering propaganda, higher taxes and more bans, more funds for "illicit" tobacco enforcement, and of course for those of pure intent and impeccable moral rectitude like ASH and WHO - they merely want to "help" wayward smokers). 😐

Tuesday, November 7, 2017 at 10:20 | Unregistered CommenterMark Jarratt, Canberra, Australia

Always best if you can to buy abroad. Don't pay stupid UK taxes and fund the likes of ASH et al. Also you get a nice holiday too even if its only a mini break !

Tuesday, November 7, 2017 at 11:30 | Unregistered CommenterTimothy Goodacre

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