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The mother of all government apologies is just around the corner…

…”A health time bomb” is how BBC1′s Panorama described the cigarette counterfeiting crisis facing Britain, in last night’s programme “Smoking and the Bandits“.  The scale of the illicit trade on tobacco is eye-watering – an estimated £4billion in lost tax revenue in the UK every year according to Panorama – though I have seen much bigger figures elsewhere.

The reason why the counterfeit tobacco trade has mushroomed in the UK is obvious… “80% of the cigarette price is tax, making our country the second most expensive place in the world to buy cigarettes“.    And so the proliferation of knock-off cigarettes and rolling tobacco – selling at less than half the price of legitimate tobacco –  has reached epidemic levels. Illicit tobacco is now widely available everywhere…. open air markets, car boot sales, newsagents, pubs, factories and universities up and down the country.

And its not just the lost revenue to the tax man  that should concern us. It’s the fact that the trade is no longer being run by Dell boy down the road with his little white van and entrepreneurial flair. The trade is now run by large well organised international crime gangs using their gargantuan tobacco profits to fund god-knows what else.  One container of illicit goods costing £100,000 returns the gangs a profit of £1million. This is now BIG business for BIG CRIME syndicates. 

And if you don’t care what the gangs do with the money they make, and even less about the loss to the tax coffers, then you might be be concerned by what is actually IN these counterfeit products. A counterfeit pouch of Golden Virginia purchased by the Panorama team had 30 times the levels of lead found in a pouch of legitimate  Virginia – not to mention the humongous levels of cadmium and arsenic found in other fake tobacco examined. This is the “health time bomb” Panorama refer to – let’s not worry about the nicotine right now…….

So how to stop this trade ? Well, the government has already announced an increase in spend for HMRC to stop tax evasion and fraud. How much of the increase will be directed toward stopping illicit tobacco sales is unclear. What ever it is it won’t be enough to catch the veritable tsunami of illicit tobacco that is pouringinto the country (go watch the programme if you doubt me). So the answer to cutting the illicit tobacco trade hardly seems to lie with more HRMC men and their waggy-tail sniffer dogs.

We need a big idea to tackle the illicit tobacco trade – and fast!

One “big idea” staring us all in the face of course is to CUT the duty on legitimate tobacco – to remove the incentive for punters to buy the cheaper  alternatives full of who-knows what heavy metals an poisons. Cutting tobacco tax would almost certainly increase legitimate sales at the expense of  the illegal sales.

Raising tax on tobacco in recent years has, I suggest, not “cut smoking” as the health-fanatics would have us believe. It has driven it underground. Diverting the cash from tax coffers to crime gangs.

Another “big idea” would be for government to liaise with tobacco companies (yes that would involve sitting in the same room) to find ways to make it much more difficult to counterfeit their products (the vast majority of people purchasing the tobacco have no idea it is fake – but assume it has been brought over from elsewhere in Europe) .

So what is the Coalition Government’s big idea?  Oh I know to announce tomorrow (on “No Smoking” Day) the introduction of plain packaging on LEGITIMATE tobacco products. That’ll work (not!).

Criminal gangs must think Christmas has come early. Lets make it 100% easier to sell tax free poison-filled knock-offs and make the cost of the fakery even cheaper – no more complicated forgery to pay for. I can almost hear the whoops of delight from here.

This looks, for all the world, like another government apology in the waiting. What will it be this time… “a misunderstanding”…a “rethink after new evidence came to light”…”a matter of unintended consequences”…

…The best one of course will be the plaintive cry that “we were only trying to save the kids”… Well chaps if you really want to “save the kids” then find a way of stopping the disgusting lead…arsenic..cadmium filled alternatives from wiping out the legitimate stuff that looks like candy by comparison. Because I can tell you that kids are not going to smoke any less as a result of your action tomorrow and if there are two cigarettes that look identical and one is half the price of the other we all know which one the kids are going to buy. ….Oh and if your only answer is that you have “increased funding to HMRC” then you deserve everything that is going to be thrown at you.

Given you seem a bit short on quality PR advise right now let me help..  HOLD OFF … Think long term, not short term. Go for real success, not tomorrow’s headline..Think about what is the effective measure, not what is the easiest measure. Mostly – be very clear of the consequences of what you are about to do… and if you are in any doubt…hit that pause button now.

9 Responses to “The mother of all government apologies is just around the corner…”

  1. neil Says:

    Yes. Dropping the smokers’ tax to a more reasonable level would be a sensible start. Anti-counterfeiting measures, too, would be good. And promotion of the dangers of buying counterfeit cigs. Some tv ads, funded by the baccy companies, perhaps?

    But the government still has to work against the tendency of people to engage in this hideously anti-social practice. Banning smoking in all public places (indoors and out) would, for me, be the next step. The indoor ban has been a great leap forward. It helped me to finally quit, as well as many others I’ve spoken too. I’m sure Liberal Vision will disagree on this point, however!


  2. Kelly Says:

    Neil… not quite as hideously anti social than telling people what to do eh? I expect you have some habits that would be considered antisocial!

    Do you know how many old people are now sitting at home lonely with no social life because smoking has been banned in their local pubs, clubs and bingo halls?

    I expect that’s killed more of them off than the smoking has!

    If I choose to smoke, it’s entirely up to me, so get off your high horse.

    What an authoritarian chump you are!


  3. neil Says:

    “I expect you have some habits that would be considered antisocial!”

    Nope! I had one anti-social habit and I gave it up.

    The fact is, now when I’m in a taxi or a public building I no longer have to breath someone else’s second hand smoke. And I don’t need to describe how disgusting that is because anyone reading this already knows. Unfortunately, I still have to breath that it when I’m walking down the street, standing at a bus stop, etc. In time, the government will do the right thing and ban this archaic nonsense.

    And by the way, if you are going to describe telling people what to do as hideously anti social, maybe you should not then proceed to… tell someone what to do!


  4. Chris Says:

    We could really do with a ban on government agencies putting out totally made up figures as fact. That ‘estimated £4 billion’ is completely and utterly plucked out of the air. It’s a guess, produced by a bunch of people who want their budget increased so more of them can spend more time pointlessly hassling tourists.


  5. Neil - not the same one are Says:

    “…….Taxi or Public building…”
    Fair enough but two BIG BUTS
    Firstly Public buildings are those owned/built by the Public. Pubs, clubs, cafes, bingo halls etc are not public buildings: They are buildings where the public, at the discretion of the proprietor, welcomed. No one should assume they have greater rights than the owner.
    Secondly, there is an ancient technology called ventilation involving something as simple as opening windows or, in the 21st Century, various air conditioning devices that remove even the most minute traces of contaminates. Your exaggerated description of breathing of smoke when walking down the street appears rather selective since there are many other very serious pollutants that should be of greater concern.
    Oh yes, many more smokers actually smoke in the well ventilated open air simply because they have been forced out of the private environments where many previously engaged in the activity you find so objectionable.

    Chris —- when it comes to “….people who want their budget increased so more of them can spend more time pointlessly hassling….” we should look no further than ‘control’ advocates who, especially in the case of tobacco, openly declare that only their own ‘control’ colleagues should have any input in discussions, science, studies or statistics!


  6. Ed Joyce Says:

    The problem faced by the cigarette companies is that it is critical for them that the smuggled tobacco channel sells their goods. If you look at the situation in Canada in the early 1990′s RJR smuggled cigarettes via Canada and Imperial were forced to follow.

    Competition forces the tobacco companies to break the law. Also the duty never paid channel reduces cost and pushes up demand.

    One possible way forward would be to look at the sales channels used by illegal providers and liberalise these to place competition in them. An example would be to increase the threshold for VAT for those selling cigarettes on a small scale basis through legitimate channels. This would place competition into the channels dominated by illegal sellers. Certainly intervening to set up competition to beat the illegal channels is the way forward. This might increase the flow of information about illegal activity. Clearly there could be issues with this but the current system is not perfect either.

    Ed


  7. Angela Harbutt Says:

    Neil
    I find screaming kids running about willy-nilly in the park making all that noise fairly anti-social – should we ban them ? I am not against people having them you understand – just asking they dont inflict their noise on me. And its not just parks -children can be so anti-social say in supermarkets, trains, buses and planes. Of course some parents actually have control of their kids -and are considerate to those around them – but stuff that – we should ban them all and the considerate ones will just have to suffer like the rest of them..

    I also find garlic breath particularly anti-social – maybe we could have breath-police on the streets issuing on the spot fines for those emitting above permissable levels of garlic-breath.

    Now I think about it people who insist on playing music on their ipods and mobile phones are really anti-social. We should not ban the sale of the devices – but how about a ban on them in all “pulic” places.

    Oh and now i got going what about chewing gum ? People who insist on dropping gum on the pavement or worse still on bus seats need to be stopped. I have had three skirts and a rather lovely pair of trousers ruined that way. I can only suggest an outright ban on all gum just to be on the safe side.

    I could continue with my list of anti-social practices that I might wish to see banned or otherwise limited – where as actually what might be nice was a bit more consideration from everyone to those around us – and a lot more tolerance from everyone else. After all what is your lovely little treasure – and their cries of delight and whoops of joy utterly delightful – may well be my nightmare.


  8. Mr A Says:

    Well said Angela! Both the post above and the original blog posting.


  9. Dan Falchikov Says:

    Interesting article. I didn’t see the programme, but it sounds very much like a copy of a BBC Scotland investigation earlier this year, which I blogged about here:
    http://livingonwords.blogspot.com/2011/01/time-to-cut-tax-on-fags-and-possibly.html


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