Christopher Snowdon's Blog, page 9

The scary logic of the generational tobacco ban

As the second reading of the Tobacco and Vapes Bill approaches today, MPs on both sides of the house will be looking for something to say in their speeches after the obligatory throat-clearing of “I believe in freedom but…”. When it comes to anti-smoking legislation, the welfare of children is the usual excuse, but since the Bill’s flagship policy is a ban on adults buying tobacco products, an appeal to vulnerable minors will not cut it this time. The costs of smoking-related diseases to the NHS have often been cited in the past, but it is easy to demonstrate that the £3.1 billion smoking supposedly costs the NHS is much less than the £11 billion the government raises in tobacco taxes.

What, then, can be used to put a liberal mask on prohibition? The Department of Health and Social Care has prompted MPs with a “factsheet” which claims that smoking “costs the economy and wider society £21.8 billion a year”. Most of this — a whopping £18.3 billion — is due to “lost productivity”. This claim is derived from Action on Smoking and Health (ASH), a pressure group funded by the government, who commissioned Howard Reed of Landman Economics to do some modelling. I have a slight affection for Reed because he co-authored a report with Jonathan Portes that made some predictions about child poverty that were so wrong that I made £1,000 betting against them. 

Reed has been playing Numberwang for ASH for years and every estimate of the “cost of smoking” is higher than the last. In 2019, it was £17 billion. Now, despite smoking rates continuing to fall, it is £21.8 billion. Lost productivity due to unemployment, lower wages and early death are always the biggest component.

ASH have tapped into a rich seam of political concern about economic growth by focusing on these “costs”, but are they really costs? If they are really costs, who pays them? And can nonsmokers expect to benefit financially if smoking somehow disappears? 

Read the rest at The Critic.

A bad time for a bad obesity prediction

All you have to do to produce an obesity forecast that will be published in a medical journal is draw a straight line through the recent past and push it forward a few decades. That is literally all there is to it and it is why such forecasts are very likely to be wrong. 

Sure enough, they are always wrong. According to past predictions, the UK's adult obesity rate should have been 33% in 2012 (it was 25%) and it should be 40% by 2030 (seems unlikely; the figure for 2022 was 29%).

Predictions for the US are even more dramatic. To be fair, obesity is significantly higher there (41%). But the prediction that "by 2048, all American adults would become overweight or obese, while black women will reach that state by 2034" remains as implausible as it did in 2008.

Nevertheless, the media lap these forecasts up and the studies that contain them invariably urge policy-makers to regulate people's diets to avoid these awful outcomes. It's never too late!

The latest effort was published in the Lancet this month. Minor aristocrat and major killjoy Jim Bethell was all over it.

This is very powerful.
Most striking, USA obesity rates are accelerating!
Our current efforts are a total failure.
I’d guess UK data similar. Anyone know for sure?
For sure, to bend the curve we need a new approach. https://t.co/sy5yEwqZ1l

— Lord Bethell (@JimBethell) November 20, 2024

The study reckons that... 

The projected prevalence of overweight and obesity in 2050 is estimated to be 81·1% (77·9–84·5) in adult males and 82·1% (76·7–85·7) in adult females. The prevalence of obesity is projected to increase at a more rapid rate than overweight, and faster among males than females. In males, the percentage change in the prevalence of obesity from 2021 to 2050 is estimated to be 32·8% (15·7–48·0), with a prevalence of 55·3% (47·7–61·8) in 2050. For females, the percentage change in the prevalence of obesity from 2021 to 2050 is estimated to be 28·6% (13·5–39·3), with a prevalence of 58·8% (51·1–64·1) in 2050.

 In West Virginia and Kentucky, the authors reckon at least two-thirds of the adult population will be obese by 2050!    
All this is based on the assumption that "current trends" will continue. But if you've been reading the news recently you may know that current trends have already stopped continuing. As James Burn-Murdoch reported in the FT last month...

Around the world, obesity rates have been stubbornly climbing for decades, if anything accelerating in recent years. But now newly released data finds that the US adult obesity rate fell by around two percentage points between 2020 and 2023. 
What makes this all the more remarkable is the contrast in mechanisms behind the respective declines in smoking and obesity. The former was eventually achieved through decades of campaigning, public health warnings, tax incentives and bans. With obesity, a single pharmaceutical innovation has done what those same methods have repeatedly failed to do.

  I guess this news came out too late for the Lancet to halt publication. Awkward.
  

Burn-Murdoch is confident that weight-loss drugs explain the decline in the USA. I think we need to wait another year or two to be sure. Someone on Twitter mentioned the possibility that the decline is because Covid killed off a disproportionate number of obese Americans. It's an interesting thought. After all, it should have. And yet we saw no reduction in obesity in the UK (the 2022 figure is an all time high) and I don't think any other country has seen a fall in obesity rates. Burn-Murdoch also says that the fall in obesity was largest among the better educated, which fits the drug theory but not the Covid theory.
Let's wait and see.

Not Invented Here (2): alcohol

Doctors have been advising people to have several days without alcohol each week for decades. It is sound advice because, as the British Liver Trust says, ‘it is simple and easy to understand, reduces the overall number of units that you drink each week, helps prevent alcohol dependency and importantly for liver health gives your liver a rest and a chance to rejuvenate.’ In 2011, Ian Gilmore, the chairman of the Alcohol Health Alliance, advised drinkers to have ‘two to three alcohol-free days a week’. In 2012, the House of Commons Science and Technology Committee said that ‘people should be advised to take at least two drink-free days a week’. In 2016, the Chief Medical Officer said that ‘a good way’ for people to reduce their alcohol consumption was to have ‘several drink-free days each week’. None of this was remotely controversial until the alcohol education charity DrinkAware partnered with Public Health England (PHE) in 2018 to launch the ‘Drink Free Days’ campaign. Aimed at drinkers aged between 40 and 64, it advertised on radio and digital platforms and provided an app to help people monitor their alcohol consumption.

You might think that public health groups would be delighted to see a well known charity put its time and money into encouraging drinkers to consume less alcohol. But you would be wrong. DrinkAware is funded by donations from alcohol producers and retailers, and this was enough to make the aforementioned Ian Gilmore resign as co-chair of PHE’s alcohol leadership board and write an article titled ‘Public Health England’s capture by the alcohol industry’. An open letter opposing any collaboration between PHE and Drinkaware was signed by 332 academics, some of whom threatened to stop working with PHE if it did not part ways with the charity. 

Read the rest at the IEA Substack.

Not Invented Here (1): obesity

This month I'll be writing a series of articles about Not Invented Here Syndrome - when institutions reject practical solutions because they weren't part of their plan. The first is about obesity and weight loss drugs. 

The Department of Health and Social Care says that obesity costs the NHS ‘up to £6.5 billion a year’. The health secretary Wes Streeting has claimed that it costs the NHS £11 billion a year. When wider societal costs, including lost productivity, are included, Frontier Economics estimated that obesity cost Britain £58 billion in 2020, and when they made a further estimate to include the cost of people being overweight in 2023, this rose to £98 billion, of which £19.2 billion were direct costs to the NHS.

Obesity is routinely referred to as a ‘crisis’ in the UK and elsewhere. Fifteen million adults (28 per cent) have a body mass index of 30 or more and are therefore classified as obese. The number of obese Britons has been gradually growing for decades and none of the anti-obesity policies enacted so far, such as the sugar tax and traffic light labelling on food, has made any tangible difference. Some countries have gone further. Hungary, for example, has an extensive system of taxes on food that is high in fat, salt or sugar (HFSS). Chile has had mandatory health warnings on HFSS food since 2016 and has banned the use of cartoon mascots such as Tony the Tiger. Both countries have seen obesity rates continue to rise.

Given how seriously public health campaigners take obesity as a health problem, you might think that they would be delighted to find something that makes people lose a great deal of weight in a short space of time. But you would be wrong. A new generation of pharmaceuticals that have been shown in randomised controlled trials to help people lose an average of 15 per cent to 20 per cent of their body weight have been given a cautious welcome at best by those who should be most excited by them.

 Read the rest.

Has vaping backfired? (No)

Has vaping backfired? That is the question asked by Sunday Times journalist Tom Calver yesterday. He claims that rising e-cigarette use has left Britain with more nicotine users than it did when the smoking ban was introduced in 2007 and that nearly 40 per cent of 16-24 year olds are “hooked” on nicotine. This, he says, “might just about be tolerable if cigarette smoking rates were quickly falling. But they are not.” He even claims that there are “some signs that the number of young cigarette smokers is ticking back up again”.

Read the rest at The Critic.

Rachel Reeves' taxes on working people

 

Not entirely unpredictably, taxes and spending are set to go through the roof after Labour's first budget since 2010. Having promised not to tax working people, Rachel Reeves announced tax rises for smokers and drinkers, announced a new vape tax and increased the sugar tax. Details below from the Red Book.

 Alcohol duty will rise in line with the RPI from February 2025 and it was implied that this would be an annual thing. Draft beer duty will be cut by 1.7%, which apparently amounts to a penny off a pint. I will be personally making sure that the IEA's local in Westminster has cut the price of a pint of Paulaner from £7.55 to £7.54. 
While the draft beer duty cut will be barely be felt by drinkers, the vape tax will cost vapers around £300 a year. And yet the beer duty cut will cost the government £100 million a year while the vape tax will only bring in £15 million. Is it really worth it? My comment on behalf of the IEA: 

"A wealth of economic evidence shows that taxing e-cigarettes leads to more people smoking. Taxing vape juice shows that the government is not serious about its 'smokefree' ambitions.  “Reeves says that yet another 'one-off' tax hike on tobacco will dissuade vapers from switching back to smoking, but with 26% of the cigarette market already in the hands of organised crime, the legal price of cigarettes is irrelevant to a growing number of smokers. Tobacco duty revenue has fallen by £1.5 billion in the last two years and it will go on falling, despite the tax rate rising, because smokers feel no moral duty to buy legal cigarettes and give money to politicians who so obviously hold them in contempt.  “Cutting draft beer relief so that a pint in a pub is 1p cheaper doesn't come close to compensating from this tax raid. Drink 600 pints and get one pint free? It is a cheap gimmick."

Sin taxes and the Laffer Curve

It's the Budget tomorrow. Either Rachel Reeves has being engaging in some epic expectation management or if it is going to be the mother of all tax grabs. In expectation of the latter, every killjoy pressure group in the land has been lobbying for taxes on activities of which they disapprove. 

I wrote about this for The Spectator last week, but it is worth underlining how unwilling smokers and drinkers are to be squeezed any further. Between 2021/22 and 2023/24, the smoking rate fell by 10% but the number of legal cigarettes sold fell by 31%. The shortfall has obviously been taken up by the black market and the government is receiving much less tobacco duty revenue as a result.

UK tobacco duty revenue (HMRC)

2020/21: £9,964 million

2021/22: £10,278 million

2022/23: £10,004 million

2023/24: £8,804 million

 From an all-time high of £10.3 billion two years ago, revenues have fallen by £1.5 billion in just two years. Dig deep, nonsmokers!

Alcohol duty revenues tell a similar story. They had already begun to decline by August 2023 when the government introduced a 'simplified' new alcohol duty system which led to some serious price hikes for some drinks. This came alongside a large rise in alcohol duty overall, which rose in line with the Retail Price Index. As with tobacco duty, alcohol duty was bringing in record amounts in 2021/22, but despite significantly higher taxes, revenues are now lower.

Wine duty revenue (HMRC)

2020/21: £4,659 million

2021/22: £4,734 million

2022/23: £4,391 million

2023/24: £4,611 million

Spirits duty duty revenue (HMRC)

2020/21: £4,115 million

2021/22: £4,401 million

2022/23: £4,136 million

2023/24: £4,137 million

 Revenues from beer and cider duties have fallen too. All these figures are in nominal terms. Adjusted for inflation, tobacco duty revenue has fallen by £3.6 billion (-29%) since 2021/22 and alcohol duty revenue has fallen by £1.9 billion (-13%). By raising taxes, the government has created a blackhole of £5.5 billion, helped close more pubs and pushed even more smokers to the illicit market. Way to go!
As for the idea of doubling gaming duty to 41%, as being pushed by the Social Market Foundation, it would wipe out much of the legal market by demanding companies hand over much more than they make in profit. That might be a feature rather than a bug as far as anti-gambling groups are concerned, but it is not what Rachel Reeves wants. As I said to the Telegraph recently.... 

“If Rachel Reeves thinks there is easy money to be had by squeezing drinkers and smokers, she will learn the hard way that higher taxes do not always produce more revenue. 

“Tobacco duty revenue has fallen by £1.5bn in the last two years as smokers turn to the black market. Tax revenue from wine and spirits has fallen by hundreds of millions.

“Britain is not a low tax country with plenty of money to spare. We have some of the highest taxes on alcohol and tobacco in Europe and people have had enough.”

 

Farewell, disposable vapes

Part of me wishes that disposable vapes had never been invented. Until they arrived, it seemed like the battle for tobacco harm reduction in Britain had been won. The kind of people who want to ban everything wanted to ban e-cigarettes, but most people could see that they were a relatively harmless substitute for cigarettes and were helping to drive down smoking rates.

Then along came the Elf bars and Geek bars and the mood began to sour. Whether it was because of the price or the colours or because it was simply a fad, they became somewhat popular with teenagers, just as Juul had become popular with high school students in the USA a few years earlier.

 

Read the rest at the Spectator.

Will the tobacco turf wars come to Britain?

The old adage that there is no smoke without fire has taken on a sinister meaning in Australia after a series of arson attacks on tobacconists. The word “series” barely does it justice. “Endless succession” is closer to the mark. When a shop selling illegal tobacco was firebombed in Adelaide last Tuesday, it was the 16th such incident in South Australia and the 130th nationwide since the “tobacco turf wars” began last year. It was followed by another firebombing in Adelaide on Saturday, an arson attack on a gym in Melbourne on Sunday, two tobacconists set ablaze in Melbourne on Tuesday and a smoke shop in New South Wales being ram-raided and blown up yesterday. 

With drive-by shootings and murders in broad daylight, Australia’s black market in tobacco and vapes should be a cautionary tale, but it has received little attention in the Northern hemisphere. The root of the problem is obvious. Australia has the highest tobacco taxes in the world and has banned e-cigarettes entirely. The market for both products is now largely in the hands of criminal gangs who encourage shopkeepers to sell their products by telling them to “earn or burn”. 

One of the more peculiar elements of “public health” ideology is the belief that taxes and regulation do not fuel the illicit trade, but when your nightly news bulletins start to resemble something from Judge Dredd, that becomes difficult to sustain. Even the Australian Broadcasting Corporation (ABC), which makes the BBC look like GB News, has had to acknowledge that “excessively high” cigarette taxes are responsible for the self-described “world leader in tobacco control” becoming a basket case.

 

Read the rest at The Critic.

Looting

Ahead of the Budget on 30 October, Rachel Reeves is being bombarded by lobbyists urging her to loot their enemies. The New Economics Foundation wants a ‘jet-setter tax’ on frequent fliers of €100 per flight. Action on Smoking and Health wants a levy on tobacco companies. Greenpeace reckons it can raise at least £26 billion a year by levying a wealth tax on the ‘super-rich’. An assortment of think tanks and pressure groups linked to the Labour donor Derek Webb think they can squeeze another £3 billion out of the gambling industry by doubling gaming and betting duties. Meanwhile in Scotland, the neo-temperance lobby are demanding a ‘levy’ on alcohol retailers who, they claim, are getting rich off the back of minimum pricing (a policy that only exists because they lobbied for it). 

The appeal of these taxes lies in the old adage ‘Don’t tax you, don’t tax me, tax that fellow behind the tree’. They will, supposedly, only affect faceless corporations and ‘those with the broadest shoulders’, and who cares about them? Alas, it is more complicated than that and the Labour party is starting to realise that if there were billions of pounds lying on the pavement, the last government would have picked them up. Putting VAT on school fees and taxing non-doms were the closest thing Labour had to a magic money tree before the election, but it is now widely recognised that they will raise little if any revenue and the overall impact on the public finances could well be negative. 

It is a reminder that before you hike up taxes, you should give a little thought to the unintended consequences, and yet the wider economic consequences of windfall taxes on industries that have not been the beneficiary of any obvious windfall are rarely considered. It is probably fair to say that the New Economics Foundation does not have the best interests of either the airline industry or business travellers at heart. For anti-alcohol, anti-gambling and anti-smoking groups, creating unemployment in the industries they attack is not so much an unintended consequence as the whole point. 

Read the rest at the Spectator.