You may remember I've mentioned Joy Townsend before. She is a member of ASH's editorial board despite not possessing even the most tenuous grip of basic economics.
BBC: There must be a tipping point where you are forcing poorer people to buy their cigarettes without paying duty.
Joy Townsend: Well, it's very interesting because [...] the tobacco companies always say that. If the tax goes up, this is going to increase smuggling. And they say it, it's one of their many deceits as it's not true.Now, you could believe she is an 'expert' in financial affairs if you like. You know, fiscal pressures on supply and how they affect buying patterns, that sort of thing. In Joy's case, she believes that price rises are irrelevant; smokers will continue to buy from the same sources ... or quit. It's really that story-book simple in her world.
Or, you could trust the Independent's business correspondent, Nick Goodway.
Two distinct messages come out of Imperial Tobacco's latest trading update. The first is that cash-strapped smokers are turning to the black market in numbers probably not seen since the Second World War.Unlike ASH propaganda, trading updates will be pored over by market analysts for whom inaccurate information might mean the difference between millions earned and millions lost - none of that 'peer review' getting your mates to give it the once over crap. Claims from listed companies - quite the opposite of junk stats burbled by unchallenged professional anti-smokers - are tested to destruction for veracity.
According to Imps, the last few weeks have seen the proportion of cigarettes smoked in the UK which have not had any tax or duty charged on them shoot up to 20 per cent from just 16 per cent late last year.
That means the Chancellor, George Osborne, is missing out on one in five fags smoked. The cost to the Treasury is now well above £3bn a year. He should now start worrying about the diminishing returns he is getting, having added an extra 70p on a packet through his last two Budgets.The 16 per cent figure matches that reported by the Sun in October.
And official statistics?
HMRC data shows that tobacco duty raised £9.1bn in 2010, £9.6bn in 2011 and an estimated £9.7bn in 2012. Could 2013 be the first time total tobacco duty raised actually falls?Err, don't those duty receipt figures - considering smoker prevalence has flatlined in those years while tobacco duty has soared like never before - show categorically that illicit trade must have increased as a result? There is, after all, no possible other conclusion even for the likes of Townsend.
In fact, so worried are the government about the increase in illicit trade - which hasn't happened according to tobacco control, remember - that they are setting up an inquiry according to The Times.
A parliamentary committee is to investigate the illicit trade in tobacco for the first time.
The intention of the Home Affairs Select Committee to launch an inquiry into the black market comes as the world’s fourth-largest tobacco company warned yesterday that first-half adjusted operating profit would be dented by “increasing levels of illicit trade” in Europe.Which is kinda funny when you consider this tweet.
UK tobacco tax rises followed by falls in illegal tobacco use. @batpress how can this be true? cancerresearchuk.org/cancer-info/ne…
— Simon Chapman (@SimonChapman6) October 22, 2012
Sadly, economic truth is an uncomfortable concept for tobacco controllers ... I wonder if they still believe in the tooth fairy?
