ASH’s ten Budget commandments

On Friday The Sun asked Forest to comment on whether the cost of tobacco is likely to go up again following the Budget on March 3.

The honest answer is we don’t know but our hope is that having hiked tobacco duty twice last year - once in March and again, very discreetly, in November - the Chancellor will postpone any further increase until later in the year at least.

You can read The Sun’s report, with a quote from me, here. The full unedited comment read:

“Common sense suggests this is no time for yet another increase in the cost of tobacco. 

“A further rise, following two tax hikes last year, would be another kick in the teeth for consumers who buy their tobacco from legitimate retailers.

“Tobacco taxes are already at punitive levels in the UK. Increasing tobacco duty again would discriminate against the less well-off at a time many people are already struggling.

“It would also fuel illicit trade which is costing the government billions of pounds in lost revenue every year."

According to a report in the Express yesterday that figure is a staggering £47 billion since 2000 so to those who say a further tax hike is inevitable given the state of the nation’s finances, think again.

Punitive taxation fuels illicit trade and the only winners are the criminal and sometimes terrorist gangs that take advantage of the sky high price of tobacco sold legitimately.

Meanwhile it’s worth reading ASH’s pre-Budget submission - a joint effort with the tortuously named SPECTRUM (Shaping Public hEalTh polices To RedUce inequalities and harM).

Here are the ten commandments (sorry, recommendations) put to government. They begin in familiar territory by asking the Chancellor to:

• Raise the annual tobacco tax escalator from 2% above inflation to 5% above RPI for all products except handrolled tobacco (HRT).

• Increase the annual escalator for HRT to 15% above RPI until the tax paid per stick containing the typical weight of tobacco used, is equivalent to that on factory made cigarettes.

• Apply the Bank Corporation Tax Surcharge to tobacco manufacturers, thereby imposing an additional 8% corporation tax surcharge on profits.

• Require tobacco manufacturers to pay a windfall tax, in light of the abnormal profits made over many years, and the small amounts of corporation tax paid thereon.

• Remove the right for tobacco manufacturers to offset marketing costs against corporation tax (including those defined as Corporate Social Responsibility).

The last three of those recommendations would appear to be an issue for the tobacco industry alone but don’t be fooled. Any additional financial burden on the companies will almost certainly be passed on to the consumer.

Meanwhile another proposed cost to the industry is the suggestion that:

• The Government should establish a ‘polluter pays’ Smokefree 2030 Fund, administered by the Department for Health and Social Care (DHSC), to raise at least £300 million a year to fund the recurring costs of tobacco control at national, regional and local levels. Devolved nations should also be given the opportunity to opt-in to the Fund.

What ASH/SPECTRUM don’t spell out is who might benefit from the proposed fund.

Recurring costs of tobacco control at national, regional and local levels? What can that possibly mean?

Sounds to me like a projected windfall for ASH, ASH Scotland, ASH Wales, Fresh North East and the entire tobacco control industry. Or am I just being cynical?

But that’s not all:

• The public health budget should be increased by £1.2bn to reverse the cuts that have taken place since 2015/16, and increased by £2.6bn to provide additional investment in the most deprived areas where there is greatest need. The Government should commit to ensuring that public health funding keeps pace with NHS funding increases in future.

And if such domestic largesse isn’t enough, globally:

• The UK should extend and renew its funding for the FCTC 2030 project for a further five years from 2021/22 onwards and continue to encourage other governments to join in funding the programme.

To all this you can add Brexit which is seen as an opportunity to strengthen tobacco tax rules by:

• revising the definition of cigarillos so they are in the same tax bracket and are regulated in the same way as factory-made cigarettes, and

• reducing duty free allowances on HRT to be equivalent to that for manufactured cigarettes

ASH/SPECTRUM also want the Government to consult on eliminating all duty-free tobacco allowances.

That’s a pretty comprehensive list and whatever the Chancellor’s response (I suspect he will ignore most of them) it’s a useful insight into what ASH and their public health buddies hope to achieve over the next few years.

It also highlights what we’ve known for a long time. The tobacco control industry never rests. It is always looking for the ‘next logical step’.

Nothing new there, of course. More interesting perhaps is ASH’s partnership with SPECTRUM, a body we can expect to be increasingly visible - and influential - post Covid.

If the public health industry doesn’t try to seize even more power over our lives I’ll be very surprised.

When that happens these ten Budget commandments will look like chicken feed.

But more on that another time.