Monday, December 07, 2009

Cigarette Taxation: Doing It Wrong

This morning's Metro (p11) has a story with the headline "Children smoke asbestos ciggies". Aside from the recent hysteria over asbestos - it's nasty, that's why we stopped using it three decades ago - this is a rather emblematic failure of government regulation.

The "fake" cigarettes are being sold for 40p/pack - something like what the market would set, as evidenced by the fact that Japan could still sell Mild Sevens for 100 yen/pack a few years ago - yet the UK retail price is around 15x that. Or 20x if, having imposed extra sanctions on retailers, kids are forced to buy from vending machines.

The price of a pack has roughly doubled under Labour, with the inevitable result of creating a black market. Initially this was people bringing a few packs back from France or non-smokers getting duty frees, but the government started cracking down on that smuggling. That raised the stakes, and the immense taxation raised the possible profit margins, which caught the interest of organised criminal gangs. Now we're warned of "tab houses" where cheap unregulated cigarettes are being sold without the state's oversight. Smokers have been driven out of social environments and hence out of scrutiny.

What did you expect would happen?

This is exactly the same mistake that was made with the "war on drugs" and, while I don't support legalisation, I can't see good arguments for punishing addicts. If you want to stop people from smoking, piss off, it's their choice, not yours.

But, if you're really insistent on meddling, first you need to control the supply - not through legislation and force of arms, because that can never work and has never worked, but by licensing, quality control and allowing manufacturers to compete; cut-throat competition will drive down prices and make the margins unattractive to criminals. That mitigates the problems of people selling asbestos as filler material and means you're not punishing addicts for being addicted. Public education on the dangers of smoking - and I don't mean huge labels and shock campaigns - was good, but everyone knows that smoking is bad for you and now such ads provoke contrarian bloody-mindedness. The main plank, of course, needs to be to consider smoking (and, one might argue, drug-taking) as a medical issue and treat it through the NHS.

Give people the means to stop being addicted and they will generally try. Attempt to force them and you will fail miserably. As we've seen and can see now.

- KoW

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