A plain pack of lies

BBC News tells us that: “A law introducing plain cigarette packaging in England and Wales could come into force in 2016 after ministers said MPs would be asked to vote on the plan before May's general election.” We really are seeing the thin end of the wedge here as yet another misjudged interference in the free market looks set to take place. The confusion that people like Public Health Minister Jane Ellison harbour is that they only seem to think of smoking in terms of bodily damage. Yes, if you only want to think about smoking in terms of the effects of physical degeneration on body parts, then cigarettes are a terrible thing, and plain packaging can be argued for on those (albeit flimsy) grounds. But only a fool would do that. Jane Ellison is presumably aware that many people still smoke even though they have full knowledge of how bad cigarettes are for them. With this knowledge she ought to have a clue that there is a reason people smoke in spite of knowledge of its degenerative effects – they enjoy doing it. Clearly people who voluntarily hand over money to buy and smoke cigarettes have accounted for cigarettes being bad for your health, but have still concluded that the positive effects of smoking outweigh those negatives. Ben Southwood's blog on smoking is particularly appropriate here.

Contrary to the 'plain packaging' lobby's misapprehension, it is trivially obvious, that smoking is only entirely bad for you if you forget all the reasons that it is good for you. The trouble with going down this road is that if you consider only the costs, then just about everything is bad for you. Take drinking water. By only counting the costs you'd find drinking water is a pretty disagreeable action - it brings about increased urination, it causes time lost in the toilet, it engenders increased chlorine levels in your stomach, and it causes gradual damage to your detrusor muscle in the bladder. Drinking water - one of the most innocuous activities we can undertake - has risks and it has costs, but no one thinks it's bad for you in net terms. Quite the contrary, in places where water is scarce we do all we can to make it plentiful.

Governments interfere too much by focusing only on costs and ignoring benefits. It’s unsurprising that people like Jane Ellison want to trespass into other people’s free choices so much – she’s only aspiring to do what the state does on a frequent basis.  This is the simple and straightforward reason why I'm a libertarian, and why I hold the view that a small government is best. People know how to run their lives better than any government. That's not a blanket truism, but it's true for the vast majority of people, and it's true in the majority of ways that relate to how we live our lives by making cost-benefit analyses and exercise our freedom of choice. Politicians are quick to interfere or ban things that have costs, which often involves failing to appreciate that humans can decide for themselves whether those costs are worth paying.

Because it is impossible for the state to know how much every individual values health, exercise, weight training, smoking, alcohol, and so forth, it is impossible for the government to know better than its citizens what is good for them. A good government would understand this, and seek to minimise its involvement in our lives to enhance our welfare and liberty, as the quality of welfare and the benefits of liberty are synchronised to enable people to voluntarily undertake the activities they prefer.

The last gasp for plain packaging

It's entirely possible to take a number of different views on the merits or not of the plain packaging proposal for cigarettes. An entirely unwarranted intrusion into commercial freedom by the usual prodnoses perhaps, a vital public health policy as some profess to believe. That we tend toward the former view while the prodnoses the latter isn't the point at issue here though. The interesting question is why is there such pressure for the law to be passed immediately?

The government is under fire from politicians on all sides amid fears that legislation forcing tobacco companies to sell cigarettes in plain packs will not be introduced before the general election.

MPs from all three main parties, including the Tory chair of the health select committee, have warned time is running out to introduce a law that would see cigarettes sold in unbranded packs, a measure experts claim would deter young people from smoking. .... In a letter to the health minister Jane Ellison, the Tory chair of the health select committee, Sarah Wollaston, warns “unless the government makes a final decision soon, time will run out for a debate and vote before the election”.

A failure to implement the legislation to introduce what Wollaston describes as “one of the most important public health reforms of the last 20 years” would, she argues, “be an unnecessary and serious setback for public health policy, if the clearly expressed will of parliament were now to be frustrated”.

A failure to introduce the measure would cause tension in the coalition. Lib Dem health minister Norman Lamb said: “This is a landmark public health issue. I want the government to act while we have time before the election. From a Lib Dem perspective, we want this legislation to go through and that’s what we will fight for.”

In April, Ellison confirmed the government’s intention to “proceed as swiftly as possible” on plain packaging, noting evidence that it would “very likely have a positive impact on public health”.In a letter to Ellison, Labour’s shadow health minister, Luciana Berger, called for guarantees that the legislation would get enough parliamentary time to become law. Berger said that if the measure was not voted on before the election “it would be seen as a major victory for the tobacco industry”.

Why the rush? After all, whoever actually wins the next election there will still be a Parliament, one that can and will pass any number of laws.

The answer is contained in this from Chris Snowdon:

Two years on, we now have enough data on tobacco sales and smoking prevalence to say with confidence that plain packaging has had no positive impact.

The reason they're leaping up and down and screaming now, Now! NOW! is that the evidence of the effectiveness of the idea is now coming in. And it simply doesn't work: it does not do what it is claimed it should do. Regardless of what you think about the desirability of curtailing commercial freedom in the cause of reducing smoking rates, plain packaging simply doesn't reduce smoking rates. But there's people emotionally and politically invested in the idea so they insist that this must be imposed before anyone has a chance to actually consider this evidence.

Aren't we all just so ecstatically happy at the way we are governed?

It’s time the government let adults - even the smokers - grow up

While the under-12s and orchestras hit the jackpot in yesterday's Autumn Statement, tobacco companies were subtly thrown under the bus, as the Chancellor quietly committed to a consultation to determine how much more money tobacco companies should be contributing to public services; a pledge Labour has already signed on to as well. Specifically, the consultation will look at the “introduction of a levy on tobacco manufactures and importers,” which could raise taxes on tobacco companies by millions of pounds a year.

From the Independent:

The tobacco industry should pay for the costs it imposes on British society, the Chancellor has said, signalling that the Government will back a levy on tobacco manufacturers and importers.

In a low-key Autumn Statement announcement, George Osborne committed the Government to a consultation on how tobacco companies could make bigger contributions to the public purse.

Specifically he said:

Smoking imposes costs on society, and the Government believes it is therefore fair to ask the tobacco industry to make a greater contribution.

The Government will shortly launch a consultation on introducing a levy on tobacco manufacturers and importers.

My colleague Ben has just recently addressed these ‘costs on society’ the Chancellor references, and debunked a fair few of them. He also pointed out the known, positive effects of nicotine, and reminded us that, despite all the lies perpetuated around smoking and NHS spending, smokers, on average, take up less health expenditure over their lifetime than non-smokers do.

My two-cents goes something like this: What cost on society? Sure, there’s a cost on the smoker, who will deal with the consequences that come from inhaling all sorts of questionable stuff – but adults get to make those personal decisions and take those risks. All choices have a cost, but in the case of cigarettes, the individual bears the brunt of the consequences; not the public at large.

But more powerful than the adults trying to make decisions about their personal lifestyles is the government, which is treating cigarettes the same way children tend to treat stuffed animals – labelling them with human-characteristics; acting as if objects are inherently bound to be good or bad.

And when it comes to cigarettes, the government has deemed them inherently evil. And it’s the tobacco companies, of course, that are proliferating them (remember, public demand matters very little to paternalists), so naturally, they must be taxed to the death.

But you know who’s really going to suffer when push comes to shove and levies are imposed? Low earners – who probably will, but can't afford to, see cigarette prices rise when the levy comes into play. Because, at the end of the day, these levies aren't coming in to save public health; they're there to save vulnerable public budgets. It's time the government came clean on that—childish, indeed.

The plain truth about plain packaging

I suppose you have to try policies out before you conclude whether they've worked or not. But now we've tried out plain packaging and it didn't work according to its own aims, can we maybe give up on it? A new paper from scholars at the RMIT in Melbourne, aptly entitled "The Plain Truth about Plain Packaging: An Econometric Analysis of the Australian 2011 Tobacco Plain Packaging Act", and the first proper study of the scheme, brings the news.

Ronald Coase famously argued that if you tortured the data long enough they would confess. In this paper we have tortured the data, but there has been no confession. At best, we can determine the plain packaging policy introduced in December 2012 has not reduced household expenditure of tobacco once we control for price effects, or the long-term decline of tobacco expenditure, or even the latent attributes of the data.

To the contrary, we are able to find a suggestion that household expenditure of tobacco has, ceteris paribus, increased. In our forecasting exercise the actual data come close to breaking through the 80 per cent confidence interval. While we do not want to over-emphasise these results, we do conclude that any evidence to suggest that the plain packaging policy has reduced household expenditure on tobacco is simply lacking.

Of course, the ASI had already been suggesting this is the result we would find based on simpler analyses; and don't forget that it is not a costless policy. If smokers derive extra pleasure when they smoke from getting their cigarettes from attractive branded packets then this is a benefit of branded packets, not a cost. And note that underage or young smokers, typically short of cash, tend to smoke cheaper cigarettes—Richmonds and Mayfair were my friends' choices when they were 14.

Funnily enough, this paper's release coincides with new evidence from the Office for National Statistics that e-cigs do not bring non-smokers into the tobacco fold.

E-cigarettes are almost exclusively used by smokers and ex-smokers. Almost none of those who had never smoked cigarettes were e-cigarette users.

Not really a surprise. But then even if e-cig users did include some who had never smoked before, this doesn't imply that they moved from (safe) e-cigs to (dangerous) cigarettes. What's more e-cigs have a number of benefits, that I tried to sum up when the EU tobacco directive came up in April, as part of a case that the anti-smoking crackdown has gone too far.

1.  Nicotine has many substantial positive effects

2. Smokers overestimate the dangers of smoking

3. Passive smoking may not be dangerous (at least to women)

4. Smoking is social, enjoyable, creates identity and meaning, and relieves boredom

5. Lifetime health expenditure is lowest for smokers

(If I was writing today I might add 6. Smoking substantially reduces Parkinson's Disease risk, especially if you do it lots and don't stop and this is true for other diseases as well).

The point is not that we should all start smoking, although there is actually a good case that nicotine is a nootropic—see the first link above—it is more that smoking has substantial benefits to the individual (as well as the noted health costs), and relatively low net costs to society, especially when you factor in the huge amount smokers pay through tobacco taxes. When we turn 'smoking' into 'smoking e-cigs' the costs evaporate, probably entirely, and the benefits remain.

Cracking down on traditional tobacco may have gone too far—but cracking down on ecigs is crazy.

Why we should cut alcohol and tobacco taxes and why we can’t

The socioeconomic profile of drinkers and smokers across countries are similar. Smoking and drinking is more prevalent amongst the less fortunate, the disadvantaged and the uneducated. In the UK, it is no different. Hiscock, Bauld, Amos & Platt (2012) found that smoking rates were four times higher amongst the disadvantaged versus the more affluent (60.7% versus 15.3% - the factors that determined disadvantage included unemployment, income, housing tenure, car availability, lone parenting and an index of multiple deprivation). Fone, Farewell, White, Lyons & Dunstan (2013) found that “respondents in the most deprived neighbourhoods were more likely to binge drink than in the least deprived (adjusted estimates: 17.5% versus 10.6%...)”. Clearly, the incidence of these taxes falls disproportionately on the disadvantaged.

People often smoke and drink for pleasure; this means that these taxes stifle those with fewer resources from attaining pleasure. Conversely, affluent people generally have less trouble substituting consumption goods or in quitting substance use altogether. This prevention of stress alleviation and pleasure attainment will be reflected in sub-potential labour productivity.

The Biopsychosocial model of health suggests that any biological health benefits could be offset by the emotional and financial strain that these taxes induce. The situation is worse for those who are both addicted and poor since they substitute consumption even less than their poor, non-addicted counterparts (thereby reducing their consumption of other important goods). This simultaneously deprives their dependents (quite often children).

A primary concern is that the increase in smoking and drinking will cause several negative externalities (especially in the form of increased healthcare costs). One should consider that, if a drinker or a smoker is aware of the threat of liver failure or lung cancer and yet they choose to ignore it, it is ultimately their choice, their body and their health. A certain degree of respect must be afforded to choice especially since we cannot fully empathise with others.

However, one’s disregard for one’s own health often incurs costs for taxpayers whilst, personally, there are negligible financial costs. In this sense, many may feel disinclined to take care of their health as they might have if treatments weren’t free. So whilst the NHS is still around in its current form, it makes (some, albeit limited) sense to heavily tax alcohol and tobacco. Alternatively, a healthcare system that is at least partially privatised (e.g healthcare vouchers) would enable lower taxation of the disadvantaged and impoverished.

Yes, the public health people are lying to us again

It would be useful if they could manage to keep their stories straight:

A landmark report by Public Health England (PHE) says lack of exercise is as dangerous as smoking - directly contributing to one in six deaths.

Officials warned that the UK population is now 20 per cent less active than it was in the 1960s, with half of women and one third of men damaging their health through lack of physical activity.

Given that weight is a straight function of calories consumed to calories expended we've the cause of our obesity epidemic right there. Calories consumed have fallen in that timescale but calories expended has fallen faster. We can thus junk 90% of the current public health programs over addictive sugar, trans-fats and all the rest as simply being nonsense. This part of the public health sector has told us what is really happening.

But it is, of course, worse than that. Our public health people do not seem to understand the economics, nor even the accounting, of public health:

Officials say that without major changes in the way people live their lives, the welfare state in Britain could collapse under the burden of self-inflicted diseases, which are fuelled by obesity, alcohol and smoking.

This simply isn't true. As we've pointed out many a time in these pages, fatties, boozers and puffers save the welfare system money.

Yes, there are public costs associated with the treatments for the diseases all three bring on. But in terms of medical care those costs are lower than the public costs of treating someone who does not die early. There are thus savings in public costs if someone pops an artery in their 60s rather than needing, a little later, a decade's worth of Alzheimer's treatment. When we include things like pensions savings the numbers are even starker. From the point of view of the finances of the welfare state we should be encouraging everyone to stuff themselves and to puff away and imbibe as they do so.

On the other hand of course there are substantial private costs to such early deaths: so we don't in fact go around doing that but just, if we've any liberality left at all, tell people so that they are informed of those costs: the benefits they already know of as it is pleasurable to eat, drink and smoke.

This does not mean therefore that there should be no information campaigns, no attempts to inform people that their health should be better if they stagger up off the couch for a walk for 30 minutes a day. That's all just fine. But what it does mean is that none of these campaigns or actions can be justified by reference to the costs to the welfare state or the public purse. It just ain't true that fatty, puffing boozers impose costs upon said welfare state: thus reducing the number of fatty, puffing boozers isn't going to save that welfare state any money.

On Ed Miliband's new tax on tobacco profits

Ed Miliband has decided that there should be higher taxes on the profits of cigarette companies. The argument being that smoking costs the NHS money and that thus some cash should come from the one activity to cover the other. However, that activity of smoking already more than covers the public costs associated with it. As is helpfully pointed out here:

Estimates for the amount spent on tobacco in the UK in 2011 range from £15.3bn to £18.3bn. The cost of smoking to the NHS is put at between £2.7bn and £5.2bn.

The Treasury earned £9.5bn in revenue from tobacco duties in the financial year 2011-12.

When even The Guardian is pointing out the mathematical difficulties with a Labour Party leader's promises then it would be fair to say that it's not really going to fly, wouldn't it?

And that is rather the point about smoking. The activity is already sufficiently taxed that it pays for all of the public costs associated with it and more (and that's to ignore the fact that shorter lifespans as a result save the NHS money). There are substantial private costs of course: but public taxation isn't the correct way to deal with such private costs either.