Monday, 30 November 2015

A tax on drinks is just the tip of Wollaston's iceberg

Today is the start of Sugar Awareness Week. If you haven't heard of it before, it's because it has just been invented by those fun-loving people at Action on Sugar (née Action on Salt). Today also sees Jamie Oliver’s delusions of grandeur reach new heights as he releases his 'crisis strategy' for obesity. Not coincidentally, there will also be the release of an anti-sugar film from one of the government's many taxpayer-funded pressure groups, Give Up Loving Pop (GULP - geddit?), and there is the launch of yet another pressure group, the Obesity Stakeholder Group, to agitate for the usual round of bans and taxes.

It is, then, a busy day for the nanny state industry, so much so that one might almost suspect a degree of collusion. This is what happens when the ‘public health’ lobby goes from flying a kite to scenting blood. But these activities are merely the hors d'oeuvres for the big events in the House of Commons: a debate on Jamie Oliver’s sugar tax petition and the release of the findings from the Health Select Committee on Childhood Obesity.

The Health Committee report is the big news, with the BBC reporting that a tax on sugary drinks has been ‘backed by MPs’. And so it has - by seven MPs to be precise. Two Conservative committee members, Andrea Jenkyns and Andrew Percy, have dissented, with the latter calling it ‘patronising nonsense’

If introduced, a 20 per cent tax on soft drinks will redistribute the best part of a billion pounds from disproportionately poor consumers to middle class bureaucrats. For those who have fallen for the bluster about sugar being the new tobacco, it is an obvious place to start, but no amount of sophistry can disguise the fact that it would be a patently regressive stealth tax. The report acknowledges concerns about disproportionately affecting low income families but brushes them aside, saying: 'We do not believe this needs to be the case because zero sugar alternatives are available which would be unaffected.' This would only be true if poor people stopped drinking sugary drinks, but that is not what happens when soft drink taxes are introduced. Sales dip little, if at all. Most people simply pay up.

Even in Mexico, which is the closest thing the anti-sugar brigade have to a success story, sales of sugary drinks are said to have declined by a mere six per cent and, as in every other country that has tried to tax itself slim, there has been no measurable effect on obesity. The committee's report doesn't mention this, nor does it mention Denmark's fat tax which was such a failure the government not only repealed it but also abolished its tax on soft drinks and abandoned its plans for a sugar tax.

Among other omissions, the report also fails to mention the awkward fact that the rise in obesity seen in Britain between 1970 and 2000 coincided with sugar consumption declining by more than a fifth. Such facts should be the bedrock of any serious discussion of obesity, but - to be blunt - Wollaston's hearings were not a serious discussion. I say this as somebody who gave evidence at them. Sitting alongside a spokesman from the food industry and a spokesman from the retail industry, it was clear that I was part of a token trio of opposition to excessive regulation. The other twelve witnesses were very much on the other side of the argument, which is to say that they were on Wollaston's side. They included two leading lights from Action on Sugar, two people from the meddling quango Public Health England, an academic who helped Jamie Oliver make his ridiculous anti-sugar documentary, a Coke-crazed campaigner from the Children's Food Fund who has been helping Jamie Oliver with his new crusade, and Mr Oliver himself. Unsurprisingly, all twelve of them are keen supporters of taxing sugar.

Although the sugar tax has been getting most of the headlines today, it is only one indecent proposal among many. If implemented in full, the committee’s recommendations would represent by far the most draconian state interference perpetrated in the name of combating obesity anywhere in the world. The committee wants to reduce sugar consumption by 50 per cent, such an impractical target as to almost be deranged. Even the folk at Public Health England acknowledge that ‘no assessment has been made of the feasibility’ of reaching it. To put it in context, per capita sugar consumption is down significantly from its 1970s peak. If it were to fall by a further 50 per cent, Britons would be eating barely half as much we did during the Second World War when sugar was tightly rationed.

Clearly, it would take an extraordinarily overbearing state to move consumption anywhere close to this target. Today's report gives the clearest indication yet of what such a state might look like. The committee wants to dictate how much sugar can be used, where it can be sold and how much it can be sold for. It wants an 'outright ban' on confectionery and other disfavoured food products being displayed at the end of supermarket aisles and check-outs. It wants non-food shops, such as WH Smith, to stop offering confectionery at the till. It wants commercials for bacon, cheese and butter to be confined to late night television. It wants the government to regulate the size of food portions in shops and restaurants. In short, it wants the world on a stick.

As if a sugary drinks tax wasn't a big enough kick in the teeth for consumers, the committee also wants to put an end to discounting, price promotions and buy one, get one free (BOGOF) offers. In a weird, pearl-clutching digression about biscuits, the report imagines a scenario in which 'a shopper might normally buy one pack of biscuits a week. When confronted with a “buy 2 for £2” deal they buy two packs instead of one (double their normal quantity). While this extra pack of biscuits might be expected to last two weeks (if still consuming one pack per week), the shopper actually buys a third packet of biscuits during the second week.' The horror! The horror!

It is a sad day for House of Commons stationery when this kind of nonsense is printed on it. As the Middle East descends into chaos and the national debt continues to spiral, there are elected politicians fretting about people eating biscuits. Not just fretting, but demanding action. Admittedly, some of the demands are cloaked in rhetoric about 'voluntary' agreements with industry, but never has the word 'voluntary' been more deserving of ironic speech marks. As the committee explicitly says, such agreements will come with the 'clear proviso that if the industry does not respond comprehensively and swiftly then regulatory action will quickly follow'.

They not only want manufacturers to halve the amount of sugar in their products, but also demand - almost as an aside - that 'the Government should also introduce a parallel programme of reformulation to reduce the overall calorie content of food, including the levels of fats'. If only it was that simple. Why do they think food companies and chefs put salt, fat and sugar in their meals in the first place? For a laugh? To get rid of surplus stock? To annoy Sarah Wollaston? In essence, the committee wants the government to put a gun to the head of food companies to force them to produce products that have no appeal to consumers.

It won't happen - not for a while, anyway. The government, like the Labour party, has never supported sin taxes on food and soft drinks. It will almost certainly thank the committee for its input and duly file the report in the waste paper basket. In response, Wollaston will do what she always does when ministers refuse to be bullied by the 'public health' lobby and accuse the government of bowing to industry. Nevertheless the report will be cited for years to come as an 'official' and 'expert' endorsement of Action on Sugar's outlandish demands. Today’s carefully planned avalanche of agitation will not be for nothing.

Cross-posted at the Spectator.

Friday, 27 November 2015

Something wicked this way comes

A remarkably large number of sugar-related events will be taking place on Monday.

Firstly, Jamie Oliver's sugar tax petition will be debated in parliament.

Secondly, 'Sugar Awareness Week' - an invention of the Action on Sugar cranks - will begin.

Thirdly, the government sock puppet lobbyists Give Up Loving Pop (GULP) will be launching a state-funded anti-sugar film. They've been letting their natural supporters know about it in advance.

Being a 100% state-funded organisation, GULP is naturally lobbying the government for a sugar tax. That's how it works in the sockpuppet state.

Last but by no means least, Sarah Wollaston's Health Committee on Childhood Obesity will be publishing the findings from the sugar-obsessed circus that masqueraded as an evidence-gathering session last month.

Taken together, along with the BBC's dishonest claim that childhood obesity is rising, it looks very much like a co-ordinated campaign to soften us up for something. You don't think, just possibly, that somebody might be about to demand a new tax, do you?

Perish the thought.

Childhood obesity is still falling

The BBC is reporting that 1 in 5 kids are leaving primary school obese (see above). This seems to be an evergreen statistic for their health 'news' (see below, from 2010).

I have no problem with the BBC reporting routine statistics every year but they also claim that child obesity rates are 'on the rise'. This is untrue, as I explain in my Spectator post today.

Do have a read of it.

Thursday, 26 November 2015

Hold on to your meat

Now it's meat-eating that has to be taxed and curtailed. Of course it is. What I find most striking about this article - from the Chatham House think tank - is how the rhetoric could come from any meddling single-issue pressure group in the last twenty years. Powerful industry, lack of awareness, bad for your health, change the default option, need for taxation, government intervention, blah, blah, blah.

Replace meat with tobacco or sugar or alcohol or gambling or fizzy drinks and it makes as much sense. There might as well be computer generated template for this kind of thing. It's not just that these people are evil and deluded, though they are both of those things, but they are so bloody dreary and unimaginative with it.

So why does meat remain off the policy agenda? Fear of backlash from the voting public and from a financially powerful industry has seen governments remain silent on the issue of unhealthy, unsustainable meat consumption. Unwilling to risk accusations of nanny state-ism, they find themselves trapped in a cycle of inertia. The assumption is that calling for dietary change is too politically sensitive, too practically difficult a policy avenue to pursue. But digging a little deeper into public opinion suggests that this assumption is unjustified.

Of course, government policies to shift meat-eating habits will not be easy. Low public awareness of the climate impact of livestock production presents a significant obstacle in the near term: campaigns that throw light on the complex and unfamiliar notion of livestock emissions cannot hope to carry the impact needed to overcome the influence of individual preference and habit, cultural customs and industry ‘nudges’ telling us to eat more meat. But there exist other levers on which governments may pull to begin a shift in attitudes and behaviour, not least the health implications of excessive meat-eating.

Policies will need to span the whole range of intervention. Soft measures to raise awareness and encourage behaviour change – through adjustments to public procurement standards, for example, and vegetarian default options in school and hospital canteens – will need to be accompanied by more interventionist measures such as taxation and subsidy reform.

But the political space is there. Public disengagement with the diet-climate relationship is not the result of active resistance; rather, it is the product of a lack of awareness that has been sustained through government inaction. Were governments to signal the urgent need for change and to initiate a public debate around the need for dietary change, this disengagement would likely dissipate.

Meat Control should not be dismissed as too laughable to happen. If the vegetarians, climate warriors and public health mob get together they would become the ultimate screeching pressure group.

Wednesday, 25 November 2015

Redefining freedom

I wrote a post for the Spectator yesterday about how the public health racket tries to redefine freedom. It was inspired by an Australian lobby group claiming that true freedom meant being ‘free from the fear that our children will be harassed by cigarette and alcohol advertising’.

It is a sure sign that a person is against freedom when they start trying to redefine it. Even politicians who espouse explicitly anti-liberal and anti-individualistic philosophies feel obliged to pay lip service to freedom from time to time. In The Doctrine of Fascism, for example, Mussolini wrote: ‘In our state the individual is not deprived of freedom. In fact, he has greater liberty than an isolated man, because the state protects him and he is part of the state.’

In this view, safety and freedom become one and the same, with true freedom coming from the state shielding its citizens from themselves. In Orwell’s Animal Farm, Squealer assures the animals that Napoleon ‘would be only too happy to let you make your decisions for yourselves. But sometimes you might make the wrong decisions, comrades, and then where should we be?’

I have mentioned before the Senate inquiry into the nanny state that is currently underway in Australia. If it does nothing else, it will at least start a dialogue about what it means to be free in a country where paternalism has been on steroids in recent years. Nobody wishes to be seen as being against freedom and yet the ‘public health’ lobby has an endless list of taxes, prohibitions and restrictions which implicitly assume that there is too much of it. The answer, as ever, is to redefine what liberty means.

Do read the rest...

Tuesday, 24 November 2015

Final thoughts on the Licensing Act

November 2005

November 2015. Plus ca change.

I've written a post for the IEA lifestyle blog about what happened after England and Wales relaxed their licensing laws ten years ago to the day. Go read that if you haven't already read Drinking, Fast and Slow.

I have one final observation to make, which is that the story of the last decade has posed a problem for the orthodoxies of the temperance/public health lobby. At the centre of their belief system is the Whole Population Approach (or Total Consumption Model) which says that reducing overall alcohol consumption invariably reduces alcohol-related health and social problems, even though those problems are caused by heavy and binge drinkers rather than the population as a whole. The theory, which was popularised by Geoffrey Rose, holds that the whole population changes its behaviour in tandem, so if moderate drinkers reduce their consumption, so will heavy consumers.

Because they are not targeting heavy consumers specifically, this means that any method of reducing per capita alcohol consumption should be effective. The three pillars of the 'public health' approach to alcohol are therefore remarkably similar to those of gospel temperance - ban advertising, restrict availability and increase price.

The fact that the increased availability that came with the Licensing Act coincided with a 20 per cent decline in alcohol consumption is therefore an inconvenient piece of information. Largely as a result of the British experience and other inconsistencies, even the WHO now accepts that the evidence linking availability to consumption is mixed.

Faced with this paradox, the pretend public health lobby could do what they often do and produce some black-is-white research claiming that all sorts of health and social problems related to alcohol are getting worse - indeed, the Institute of Alcohol Studies recently had a bash at doing this - but it would break their golden rule to admit that alcohol-related problems can increase while per capita consumption declines.

More suited to their hypothesis is the fact that alcohol-related violence and drink driving have declined while per capita consumption has declined. But it is clear that both of these trends began when alcohol consumption was rising between 1995 and 2004. Awkward.

Equally awkward is the effect of price. Alcohol became more affordable between 2004 and 2009 but then became less affordable as a result of falling real incomes and the alcohol duty escalator. And yet alcohol consumption fell at roughly the same rate in both periods. Temperance dogma says it should have risen and then fallen.

And then there are health outcomes. Alcohol-related hospital admissions have continued to rise, albeit at a slower pace than prior to 2005. Incidence of liver cirrhosis is still rising. They could claim that these increases are the result of the Licensing Act, but, again, they would have to explain why the fall in per capita consumption hasn't led to a decline in admissions.

Finally, there is alcohol-related mortality which has neither risen nor fallen since 2005. According to the Total Consumption Model, the kind of sharp decline in consumption seen in Britain in the last decade should have reduced mortality. Talk of a 'lag effect' is starting to sound a little desperate now that a decade has passed since consumption peaked. As Holmes et al. showed in 2012, the time lag between consumption falling and health outcomes improving is not supposed to take this long; much of it should be immediate.

In short, 'public health' dogma dictates that the Licensing Act should have led to more alcohol being consumed, more alcohol-related deaths and more alcohol-related crime. In fact, it has been associated with less alcohol being consumed, fewer alcohol-related crimes and the same number of alcohol-related deaths.

Time for a rethink?

Monday, 23 November 2015

Understanding the tobacco tax gap

HMRC published their latest estimates of the tobacco tax gap last month. This is the amount of tobacco smoked in Britain that is counterfeit or contraband.

The methodology of the tobacco tax gap is pretty crude. It amounts to this:

The estimate of the illicit market for tobacco is produced using a top-down methodology; that is total consumption is estimated, from which legitimate consumption is subtracted, the remainder being the illicit market.

In other words, they estimate how many smokers there are and multiply it by the estimate of how many cigarettes they each smoke. They then subtract the number of recorded sales - plus an estimate of how much is bought legally abroad - from the total and the figure that emerges is the amount of non-duty paid tobacco.

It's a cheap way of doing it (the better way - collecting discarded cigarette packs - is left to the tobacco industry) and it has been coming to increasingly unbelievable conclusions. The latest edition finds no increase in non-duty paid cigarettes in 2014/15 and a slight decline in non-duty paid rolling tobacco.

Since 2006/07, HMRC thinks the picture looks like this (albeit with wide confidence intervals)...

This suggests that the illicit trade is bigger than it was five years ago but smaller than it was before that. But is this realistic? HMRC's tobacco bulletin shows that there was a 28 per cent decline in (duty paid) cigarette sales between 2010/11 and 2014/15 (from 45.7 billion sticks to 32.7 billion sticks). That is a massive decline over a four year period. During the same period, (duty paid) rolling tobacco sales rose by only a little - from 6.2 to 6.7 million kilograms, the equivalent of half a billion sticks.

So we have legal cigarette sales falling by more than a quarter in the course of four years. What happened to smoking prevalence in that time? We don't have data for 2014/15 yet, but the ONS says that...

'Nearly one in five adults (19 per cent) aged 16 and over were smokers in 2013, a rate that although slightly less than 2012, has remained largely unchanged in recent years'

The smoking rate was 20 per cent in 2010. By 2013, it had dropped to 19 per cent. In other words, it fell by five per cent (in relative terms). If you factor in population growth, the number of smokers has declined by even less than five per cent. And yet cigarette sales fell by 21 per cent. A slight anomaly, no?

Given that legal cigarette sales have been falling at a far faster rate than has the smoking rate, how have HMRC avoided the obvious conclusion that more tobacco is being sold on the black market?

I wish I could answer that question. HMRC publish a methodological annex and I challenge anyone to read it without concluding that the whole thing is basically guesswork. A great deal depends on HMRC's assumptions, but these are rarely spelt out. As far as I can see, there are only two possibilities that could help explain why legal cigarette sales are plummeting while the smoking rate is not...

1. Smokers are smoking far fewer cigarettes
2. Smokers are buying more cigarettes on the black market

I haven't seen any evidence that smokers are smoking fewer cigarettes than they did five years ago - though they may be - and it is far from clear that HMRC have seen any such evidence either. They say they use data from the Opinions and Lifestyle Survey to estimate how many cigarettes smokers consume but I can't see any such estimate in it.

So, it's over to you, faithful reader. The number of smokers has barely dropped since 2008 and yet the number of cigarettes sold legally has dropped precipitously and the black market is - supposedly- roughly the same size. How do we square this circle?