Budget: tobacco tax policy stalls in shameless but predictable electioneering

Wednesday 07 March 2001

Immediate Wed 7th March 2001


Budget – tobaccotax policy stalls in shameless but predictable electioneering


Asthe Chancellor freezes the real price of 20 cigarettes,  ASH attacked the reversal of tax policy as”shameless electioneering”, which would soon show up in increasedteenage smoking, help to fill the cancer wards and burden the NHS.  Teenage smoking has fallen sharply since1996 as the Chancellor has added over a pound to the price of 20 cigarettes.  Teenage smoking has fallen sharply since1996 when Brown introduced a 5% per year escalator – from 33% among 15 year-oldgirls in 1996 to 25% in 1999 [<ahref=”http: www.ash.org.uk=”” html=”” smuggling=”” tax2001.html#_toc507230487″=””>1].


ASHestimates the failure to introduce the previous policy of a 5% tax rise will,over the long term, mean 1300 more people per year die from a grisly death bycancer, heart disease or respiratory illness caused by smoking – about half thetotal that die each year on the roads.


CliveBates, Director of ASH said:


“The freeze in taxes is basically quite shamelessbut predictable electioneering.  Theyare sacrificing long-term public health policy to short term-electoralcalculation.  It seems like a give-awaybudget for smokers, but the real price will be paid in diseased hearts andcancerous lungs.”


“When cigarette prices go up, people try to quitor, best of all, never start.  Tobaccotax is one of the best health measures and as an alternative to taxing jobs andinvestment, it is good for the economy.  Let’s hope the Chancellor goes back to the policy once theelection is out of the way ”


“If the government wants a fair tobacco tax, thenit is morally obliged to do everything possible to help smokers, especiallythose on low on incomes, to quit smoking. We hoped that the Chancellor would divert just one penny in each poundof tobacco tax directly back to smokers by providing a world-beating servicewithin the NHS for smokers that want to avoid the tax and quit. [one penny inthe pound would generate about £75-80m per year, approx double what iscurrently spent].


ASHcautioned that smuggling could undermine the health gains of tobacco tax ifCustoms do not start to get large-scale smuggling under control.  ASH argued that the idea of cutting taxes toreduce smuggling is based on a misunderstanding of how smuggling reallyworks.  ASH pointed the finger at thetobacco companies themselves:


“The British cigarette companies need to explainwhy they export so many billions of cigarettes to countries in Eastern Europe,the Balkans and Africa where hardly anyone smokes them and the most obviouscustomers are mafia syndicates that will ship them back to the UK illegally.


“Despite what people think, ‘white van man’ is aminor player in cigarette smuggling. Most cigarette smuggling is now done bymafia syndicates and involves millions of cigarettes at a time and avoidance ofall taxes.  A substantial cut in dutymight deter the cross-Channel bootlegger, but will do nothing to stop thelarge-scale smuggler.” [80% of cigarette smuggling is container fraud]


“Spain and Italy have much lower levels of taxthan Britain but high levels of smuggling – the mafia syndicates behindlarge-scale smuggling are not really sensitive to changes in duty they canalways make enough money by avoiding all the tax.  It is only white van man, operating off a much smaller marginthat will feel the pinch of a tax cut.


Contacts:         <spanstyle=’font-family:arial;’>Clive Bates: 020 7739 5902(office) 077 6879 1237 (mobile)  (ISDNavailable)

Amanda Sandford 020 77395902