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Death might not be inevitable in Ed Miliband’s “leader speech”, but taxes might be?



Tobacco use is expected to kill around 5.4 million people worldwide a year.

It is undeniable that the state of the NHS is directly linked to the overall state of the economy. Austerity has posed a challenge to patient safety, though the official line is that “efficiency savings” have not impacted on safety in England. Nonetheless, it is a fact that unsafe levels of staffing have often been at the root of shortfalls in clinical safety.

The “Keogh review” could not have been a clearer example of this.

The public tend to be most concerned about the NHS if there is an identifiable event, such as Mid Staffs, or breaches of the four hour wait.

It is no big secret that Labour intend to make the NHS THE big issue of the general election campaign of 2015. This is despite the Conservatives’ electoral strategy Lynton Crosby not wishing to discuss the NHS.

But like a Marlboro cigarette, the issue of the link between Lynton Crosby, Philip Morris International Inc. (“Philip Morris”) and smoking policy has been a slow burn in the last year or so.

Labour has always wished to paint the picture that the Conservatives do not come with “clean hands” to the discussion of smoking and health.

There has always been the question: are the public aware of the financial problems facing the NHS? And, despite an universal consensus for low taxes, would they wish something to be done in the specific case of the NHS?

A new dawn for NHS campaigners was the relief that the media, who once a upon a time had been respected, were conflating “unsustainable” and “unaffordable” in their discussions of NHS funding. The NHS is, as they will tell you, should be comprehensive, universal, and free at the point of need. It is hard to know precisely where this confusion had arisen from. I remember vividly complaining about this on this SHA blog in October 2013.

In yesterday’s speech, the Shadow Chancellor Ed Balls made the direct link between income from taxes for the Government and the NHS.

“‘Next year, after just five years of David Cameron – with waiting times rising, fewer nurses and a crisis in A&E – we will have to save the NHS from the Tories once again,’ he said. ‘And we will do what it takes.’”.

Also in October 2013, the Local Government Association published a pamphlet entitled, “Changing behaviours in public health – to nudge or to shove?”.

And there is more than a cigarette paper between the two main political parties here on this ssue.

The current government has made exploring the potential of behavioural change a priority. In fact, the coalition agreement itself made direct reference to the issue, stating that the government would be “harnessing the insights from behavioural economics and social psychology”.

But likewise it has also clear that tools available to government include more draconian approaches as shown by the fact that consultations were carried out on plain packaging for cigarettes (a shove) and minimum pricing for alcohol (a smack). However, neither policy has subsequently been introduced.

I, over a year ago, wrote on this blog on the topic of changing behaviour in relation to smoking.

Ed Miliband has been banging on his “cost of living crisis”  drum for some time. And, in fairness to him, it is an issue which resonates with the general public. For socialists, such as Owen Jones, the issue does particularly resonate as an example of how privatised companies with vested interests have protected their profits at the expense of their customers. They are able to do this due to markets, which have not failed from the perspective of the shareholder, but which have clearly failed from the perspective of the end user.

And a noteworthy consideration here is that such providers have been able to rely on robust demand, for example the need to drink water or to make a phone call. Likewise, certain luxury brands have not seen their profit margins dented by the global economic recession.

Indeed, on May 12 2009, it was reported that tobacco use would continue, possibly grow, during recession, according to experts at the time.

Death and taxes may be inevitable according to the famous Benjamin Franklin quote. But Lord Stewart Wood, advisor and friend to Ed Miliband, is known also to be petrified that Labour once again becomes known as THE “tax and spend” party. Whilst Labour might have been flirting with sexier and covert ways of working things to their advantage, such as “predistribution”, an epiphany lightbulb moment came when Labour realised it could get away with taxing entities rather than people, provided that it did not offend the neoliberal virtues of competition and enterprise.

In an economic downturn, products seen as giving comfort in the midst of stress tend to sell very well. In the U.S. and abroad, tobacco is no exception. That’s why taxing a commodity which does not become popular, and which could damage your health, is such an attractive political policy.

“It’s not well understood, but as people lose jobs, the unemployed and others affected by tough economic times may rely on ‘affordable pleasures,'” Eriksen has said.

“The irony is that the more deprived someone is, people will rely on simple pleasures that are unfortunately deadly pleasures.”

Just under a year ago, in October 2013, Ben Page as Chief Executive of Ipsos MORI  presented a talk: “Public opinion: What price the NHS?”.

79% of the general public were reported as opining that the NHS should be protected from cuts (as opposed to other areas such as policing, benefits or schools).

88% of people agreed that the NHS “would face a severe funding problem in the future”.

Lack of resources and investment in the NHS is way above (42%) is way above other factors which could be posited to be “the biggest threat” to the NHS (including, for example, not enough doctors or nurses, or too much management).

Fast forward to now, and in a September 2014 report from “The Health Foundation”, entitled “More than money: closing the NHS quality gap”, the authors Richard Taunt, Alecia Lockwood and Natalie Berry considered that the NHS faces a significant financial challenge is well known and much discussed. This ‘financial gap’ has been projected to reach £30bn by 2021. This is due to the disparity between the pressures on the NHS and the projected resources available to it.

In the leader’s speech later today, Ed Miliband is ex[ected to put the nation’s health at the centre of a 10-year plan for Britain’s future on Tuesday, front loading the NHS with funding from a novel windfall tax on the profits of UK tobacco companies and the proceeds of a mansion tax on homes worth more than £2m.

A windfall tax normally has its critics because it’s considered to be a very short term measure that risks really damaging the relationship between government and big businesses.

But here is a windfall tax somewhat like no others – as the demand for cigarettes, despite the threat from e-cigarettes, is largely sustainable, and Labour if it is at any war with business is as at war with big businesses abusing markets.

In his final Labour party conference speech before next year’s general election, Miliband will tell sceptical voters he can bring the country back together and offer six ambitious goals, including changes to the NHS, designed to overcome “the greatest challenges of our age and transform the ethics of how Britain is run” over the next decade.

A mansion tax could raise £1.7bn, and had originally been earmarked by the shadow chancellor, Ed Balls, to fund a 10p starting rate of income tax, but that is now due to be funded by abolishing the marriage tax rate.

The poorest twenty per cent of households in Britain spend an average of £1,286 per year on ‘sin taxes’, including betting taxes, vehicle excise duty, air passenger duty, ‘green taxes’ and duty on tobacco, alcohol and motor fuels. In addition, they also spend £1,165 on VAT.

“Sin taxes” have generally been unwelcome by proponents of the free market, such as the Institute of Economic Affairs (“IEA”). In October 2013, the IEA published a report entitled, “Aggressively Regressive: The ‘sin taxes’ that make the poor poorer”.

In this report, the IEA made their disgust for ‘sin taxes’ clear.

It is said that, despite significantly lower rates of alcohol consumption and car ownership, the poorest income group spends twice as much on sin taxes and VAT than the wealthiest income group as a proportion of their income.

It is possible for the Conservative Party to mount an argument that tax is the single biggest source of expenditure for those who live in poverty, and indeed indirect taxes are a major cause of Britain’s cost of living crisis.

The average smoker from the poorest fifth of households spends between 18 and 22 per cent of their disposable income on cigarettes. The tax on these cigarettes consumes 15 to 17 per cent of their income.

And tobacco remains one of the world’s most profitable industries. Current data suggests that smoking is still a huge part of the global  consumer landscape and that the habit is not going to die out anytime soon.

Philip Morris is currently the leading international tobacco company, with seven of the world’s top 15 international brands, including Marlboro, the number one cigarette brand worldwide. PMI’s products are sold in more than 180 markets.

In 2013, the company held an estimated 15.7% share of the total international cigarette market outside of the U.S., or 28.3% excluding the People’s Republic of China and the U.S.

On Sep 14th 2014, it was announced that the Board of Directors of Philip Morris on the NYSE/Euronext Paris PM), increased the company’s regular quarterly dividend by 6.4% to an annualized rate of $4.00 per share.

But cigarettes contain more than 4000 chemical compounds and at least 400 toxic substances.

Cardiovascular disease (disease of the heart or blood vessels) is the main cause of death due to smoking.

Smokers are more likely to get cancer than non-smokers. This is particularly true of lung cancer, throat cancer and mouth cancer, which rarely affect non-smokers. The link between smoking and lung cancer is clear. Ninety percent of lung cancer cases are due to smoking. If no-one smoked, lung cancer would be a rare diagnosis – only 0.5 per cent of people who’ve never touched a cigarette develop lung cancer.

Other types of cancer that are more common in smokers are bladder cancer, cancer of the oesophagus, cancer of the kidneys
cancer of the pancreas, and ervical cancer.

Chronic obstructive pulmonary disease is a collective term for a group of conditions that block airflow out of the lungs and make breathing more difficult.

So, in a weird way, smoking may come to be saviour of the NHS due to a perversion of market forces. It might be the latest brand of “left populism”, leaving Ed Miliband to want to have another puff. It is hard for the Conservatives to criticise without appearing to come down heavily on the side of tobacco companies such as Philip Morris, but Philip Morris are unlikely to forget this in a hurry if the Labour Party are responsible for denting their profits.

Public health was never a sexy campaigning issue for the Labour Party, despite the best efforts of some, with popular newspapers coming down heavily on the side of the consumer than the “interfering state”. But the whole concept of the ‘responsible state’ has become tarnished with neoliberal governments increasingly outsourcing state functions to companies embroiled in inefficient practices and allegations of fraud practices. A windfall tax on cigarettes, despite giving off an unattractive odour of Labour “going back to its taxing roots”, may be, however, just what the Doctor ordered at this particular time in the history of the service.

And, as all politicians know, you can’t please all of the people all of the time.

After today, Labour might be feeling like (a) whole (person) again.

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