In 2002 anti-smoking campaigners argued that cigarettes are more affordable than they were 40 years ago. It may be true that many people are better off - which means that the cost of tobacco is a smaller percentage of their overall expenditure - but to use that argument to justify a further increase in tobacco taxation is obscene.
After all, it is difficult to see how much further tobacco taxation can be increased. British smokers (well, those who buy their tobacco in the UK) already pay more tax than anyone else and the taxes on hand-rolling tobacco are the highest in the European Union. Under the present Government, the price of a typical pack of 20 cigarettes has risen from £3.12 to around £4.50 since 1997.
Incredibly, tax currently accounts for as much as 89 percent of the cost of a packet of 20 cigarettes. Any higher and tobacco will be little more than a nationalised product with all profits going to the state!
High taxation on tobacco hits the elderly and the less well-off the hardest. It also encourages smuggling, black markets and criminality which in turn increases overall consumption because of the sheer volume of cheap tobacco that is available throughout the country.
Additional cost
According to recent estimates, one third of cigarettes smoked in Britain avoid UK taxes. Official figures show a revenue loss of £3.5 billion due to tobacco smuggling in 2000/1, a figure that doesn't include the additional cost to the taxpayer of more Customs officials and special equipment to deter or root out the smugglers. This is money that could otherwise be used to improve public services.
Worse, the Government's policy of high taxation on tobacco has encouraged a whole new criminal class including (according to our own research) otherwise law-abiding people, among them students and old age pensioners, who frequently travel to the continent to buy cheap tobacco which they then sell (illegally) to their family and friends.
We don't condone this practice, which is highly detrimental to many people including the small shopkeeper and specialist tobacconist, but it is easy to see why people on low incomes and state pensions see tobacco as a viable source of additional pocket money.
Social engineering
The usual justification for increasing tobacco taxation is that it will encourage some people to quit smoking and thereby 'improve the health of the nation'. In our opinion, a society that uses taxation as a form of social engineering is not a healthy one.
It is also hypocritical because it ignores the fact that through taxation smokers make a major contribution (over £7 billion) to the economic health of the nation, far in excess of the cost (estimated to be £1.5 billion) of treating so-called 'smoking-related diseases' on the NHS.
In 2001 and 2002, when the then Chancellor Gordon Brown increased the price of a packet of 20 cigarettes by just 6p (in line with inflation), he appeared to accept some of these arguments. We would like to think that his successor, Alastair Darling, will have the courage to go further and reduce tobacco taxation.
Yes, he will be criticised by anti-smoking campaigners, but he will also be applauded as the Chancellor who put practicality over dogma and by doing so reduced smuggling, discouraged criminality and - most important - maximised the overall revenue available to the public purse.