Thursday, 18 March 2010

That Policy Exchange Nonsense

This explains a lot. Could the 'something' be a shonky report by HenryFeathers of Policy Exchange?

It's not just the Tory party who have forgotten what being right of centre is all about. It would appear that the Policy Exchange are considering donning a Che Guevara shirt and a CND badge now, too.

The tax on cigarettes should be increased as the burden on the taxpayer is too high, even taking into account revenues from duty, a think tank said.

Research conducted by Policy Exchange found that while tax on tobacco raised £10 billion a year for the Treasury, the annual cost of healthcare and other consequences of smoking totalled £13.74 billion.

That total includes £2.7 billion of NHS care, £2.9 billion lost in productivity during smoking breaks, the £342 million cost of cleaning up butts and £507 million spent putting out fires.

Lost productivity due to the deaths of smokers and passive smoking victims costs £4.8 billion and £2.9 billion is lost in increased absenteeism, their report - Cough Up - concluded.
Like others, I found the most surprising stat to be the relatively small £713m accredited to "the loss of economic output from the deaths of passive smokers". So, on finding the report, I started at that bit.

PE's figure was based on notional deaths of 7,700 'passive smokers' at a cost of £92,500 each! Per year. Quite how they came to the conclusion that each phantom death cost the country that much money, they don't say. But the loss of output arising from the death of smokers (£4.07bn per year) is even more incredible.

In the 35-39 age range, for example, they assessed that the number of employed smokers to have died was 648 in 2008 ... resulting in a loss to the country of £470m ... £725,000 each!

Now, I can imagine they might have a point if they meant this to reflect a lifetime loss, but no. There on page 17 is the breakdown of the £13.74bn per year figure, with the rounded £4.1bn included.

Their sources leave a lot to be desired, too. The fact that they actually annotated to the Jill Pell study on a 17% heart attack reduction in Scotland was rather telling. This was thoroughly debunked on the BBC web-site and dubbed one of the worst junk stats of 2007 by The Times. What's more, being a study, it was merely guesswork before the official figures were available. Of course, once the admissions data was collated, it showed no abnormal decrease at all. Still, they did point to meta-analyses which confirmed Pell's faulty conclusions, but considering one was co-authored by Stanton Glantz, the (arguably insane) US Godfather of hysterical antismoking junk science, one must wonder at the independence of this 'independent report'.

There is a clue in the acknowledgements.

Policy Exchange would like to thank Dr Robert Nash for generously giving his time to help research and write this publication. Without his commitment to reducing tobacco harm this research note would not have been possible.
Quite so. Only a blinkered anti-tobacco stooge could possibly regard Stanton Glantz as anything but a crank. And only someone with such a vested interest would favour the Pell study over actual admissions data, despite the PE report clearly stating:

The huge amount of data collated by the NHS allows costs to be calculated reasonably accurately.
Why not use them, then? And also, if you really must pop over the pond for a study on smoking bans and heart attacks, why not choose the largest one ever undertaken, covering 217,023 heart attack admissions and 2 million heart attack deaths in 468 counties in all 50 states of the USA over an eight-year period?

With such inherent bias in the way Policy Exchange set about this task, and the sources employed (a 60% public approval of increasing tobacco taxation over and above inflation is evidenced by a report written by ASH), it would appear that this was merely an exercise in getting costs above the £10bn duty revenues by any means possible.

Once you realise this, the rest of it is difficult to take seriously and, to be honest, the whole thing reeks of what the PE's charity commission accounts, under restricted funds, describe as 'programme specific' or 'project specific' donations.

Such a hypothesis may explain why, at times, the report resembled an elaborate advert for smoking cessation drug Varenicline.

Varenicline is the most cost-effective treatment option in the NHS Stop Smoking Service. Studies consistently demonstrate it to be superior to any other therapy, but it is only used in 20% of cases. Varenicline should be offered as first line drug treatment for all patients wishing to quit smoking
On page 9, it even commands its own sub-heading and almost the entire page is taken up with boasts about its efficacy, culminating in the recommendation:

The NHS Stop Smoking Service should offer varenicline as first line drug treatment for all patients wishing to quit smoking.
PE is amazed that it is not prescribed more often, stating.

[...] the [NHS] only prescribes varenicline in 20% of cases, since it is often confined to patients who have failed with NRT. There is no good reason why all patients should not be offered it
Well, actually, there is.

Varenicline is more readily known as Champix or Chantix and makers Pfizer have been slapped with the strongest possible warning in the US due to its habit of inspiring people to kill themselves.

Stop-smoking drugs Chantix, Zyban must carry suicide warning

For Chantix, the FDA has received 98 reports of suicides; for Zyban and bupropion, the drug's generic name, 14. There also were 188 reports of attempted suicides by Chantix users, 17 by smokers trying to quit with bupropion. Nicotine-replacement products haven't generated similar reports
Perhaps why it is only prescribed in the most extreme cases, then. And it is certainly a reason why it should not be given out willy-nilly.

Interestingly, considering there are numerous instances of PE, for clarity, explaining their research in layman's terms, it's rather baffling that they didn't feel it worth mentioning the drug by its trade name. Champix or Chantix are not mentioned at all in the document. Disguising the mad uncle in the attic as a kindly maiden aunt, perchance?

I could go on as the whole thing is riddled with one-sided, or pharma biased, conclusions. Oh sod it, I've got nothing better to do at the moment, I will go on.

Page 5 sets out the basis for financial benefits of tobacco tax increases with reference to a 1996 study on price elasticity of demand. Quite irrelevant and out of date considering the large reduction in smoker prevalence since then. As the UK is right on the Pareto 80/20 barrier in 2010, the predicted quit rates are pure fantasy if calculated on 14 year old research.

Page 10 talks of the need for less regulation and more harm reduction, with no mention whatsoever of non-pharma produced e-cigs, for which heavy regulation is imminent despite the huge scope for harm reduction. Hmmm, I wonder why that should be?

Page 13 comes up with a loss of productivity based on the number of smokers in one study, and the time spent on smoking breaks in another ... to produce a monetary figure (£2.9bn) which eclipses the findings of both.

Page 16 concludes that all these smokers giving up, while deletorious to the tobacco industry, will have an impact on the economy of £nil as the money will be spent elsewhere (the economic 'free lunch', benefits without corresponding cost). Conversely, however, the cost of cleaning up cigarette litter is valued at £342m with no reasonable assumption that the streets will still need to be swept anyway (unless there are dedicated fag butt sweepers paid £342m pa that I didn't know about).

It really is quite an appalling mess from Policy Exchange, smells distinctly of obsequious rent-seeking, and author Henry Featherstone should be thoroughly ashamed of himself for producing it.

I'll leave the last word to Mark Wadsworth, who points out another glaring omission in Henry's calculations which renders his entire folly moot.

But a figure that the Righteous are determined to ignore when wailing on about 'the cost of smoking' (to the NHS or the economy or the taxpayer or whomever) is the saving in old age pensions.

In round figures, there are 12 million pensioners, a fifth of whom have smoked. The smokers live an average of 12 years in retirement and the non-smokers live on average 22 years. This averages out at twenty years claiming a pension.

If the smokers lived as long as non-smokers, the total number of smoking pensioners would be 2.4 million pensioners x 22 years/12 years = 4.4 million pensioners, so there'd be 2 million more pensioners.

The total average taxpayer-funded pension is (let's say) £10,000 a year (not just state pension but public sector pensions, other benefits and so on), 2 million x £10,000 = £20 billion, which dwarfs even today's made-up figure of total cost of smoking £13.74 billion, even ignoring £10 billion-plus in VAT and duty on tobacco.
Quite.

Seen your raise, Henry, and raised again. Let's see your financial contortions to beat that.


16 comments:

Chris Oakham said...

Dick, as I posted on Conservative Home I didn't go to the original report from Policy Exchange because I knew it would be a load of shit and raise my blood pressure. You're a brave man.

Yours, Chris Oakham (Cohiba smoker)

Mark Wadsworth said...

Ta for link. I'm amazed you managed to read it in that much detail for the reasons that Chris O outlines.

See also Dave A's calculations in the comments at mine, who reckons smoking brings a net benefit to the taxpayer of about £12 billion (despite he uses a much lower estimate of pension savings than I did).

Anonymous said...

Should someone tell these unintelligent prats that they can't do sums proper...

Dick Puddlecote said...

MW: I had the day off ;-)

Chris Oakham said...

One more thing, Dick, did Policy Exchange include other taxes paid by smokers? I've paid nearly £500K in my 43 years at work - never mind the taxes paid by my business and taxes on things I've bought.

Mind you, none of this will be remember when ASH is as a 'principal stakeholder' in the smoking ban debate is called.

Gordon the Fence Post Tortoise said...

I spotted this away from a computer - inside pages of the dead tree Telegraph - uncritically copy n pasted from whatever media pack the morons pushed out. How many journalists does the Telegraph employ? Sheesh

Dick Puddlecote said...

Chris: No, they merely compared £10bn duty with a plethora of costs.

The drag on tobacco industry profits was explained away as zero with no mention of associated trades. Pensions were ignored, as were all other criteria.

Ways of treating data were shifted from one 'ingredient' to the next, and overstating of death productivity costs were massively overstated.

They had to beat £10bn somehow so anything went.

As I said on Mark W's blog, while reading it, I laughed out loud at one point.

I've been to Policy Exchange events and used to have a respect for them. This can't do anything but make me sceptical of all future reports they produce.

DaveA said...

In Amerca the Federal Aviation Authority has banned the use of Chantix by pilots and air traffic controllers.

"May 23 — Less than 48 hours after FAA learned the anti-smoking medicine Chantix might lead to safety problems, it ordered pilots and air traffic controllers to stop taking it immediately.

The agency took this swift action after a medical safety group, the Institute for Safe Medication Practices, released the results of a study this week that found evidence for the occurrence of seizures, loss of consciousness, heart attacks, vision problems, and various psychiatric instabilities in individuals who use Chantix."

http://www.faa.gov/news/updates/?newsId=56363

handymanphil said...

Excellent destruction of one of the biggest pieces of garbage I've ever had the 'dis-priviledge' to read!
I await Joe Churcher & daily records reply to my blasts (?)

Anonymous said...

The most alarming thing about this is that government swallows this crap and then shits it out legislation to support it all over us.

I'm not kidding, this transcends politics, economics and public health. It's turning into some kind of crackpot religion.

Neal Asher said...

Obviously they feel that's it's better that people kill themselves than smoke evil cigarettes.

Anonymous said...

Have they removed the report? Your link doesn't work.

Dick Puddlecote said...

It should be OK now, Anon. Don't know why it broke, the URL didn't appear to have changed.

Anonymous said...

Trouble is Dick sheeple read this shit in the Mirror and other rags and believe it, there is no recourse in these papers for any denial so once again the cunts at ASH get their own way.

Antisthenes said...

What amazes me is that when it comes to matter that are of no real national importance, smoking, hunting bans etc all the economic statistics are trotted out by the control freak left. And we all know that statistics are not worth Jack shit. However, when important matters of state are discussed and then unilaterally imposed upon us that effect our financial well being there is not a single reference to what statistics tell us about the merit or otherwise of a given decision to be found.

Fausty said...

These smoking stats are beginning to resemble the Warmists' stats.

It seems clear that they were tasked with 'proving' the case that smoking should be taxed more (not eradicated, because that would cost them revenue).

Problem, reaction, solution - very Hegelian.