The evils of Panglossian prohibitionism
Banning the sale of tobacco would increase the black market in cigarettes
While the government conducts an eight week public consultation on Rishi Sunak’s wacky plan to gradually prohibit the sale of tobacco, the Labour MP Kevan Jones has asked a pertinent question in the House of Commons:
To ask the Secretary of State for Health and Social Care, what assessment he has made of the potential impact of Government policies on ending cigarette sales to those born on or after 1 January 2009 on the sale of tobacco products in the black market.
The minister for public health, Neil O’Brien, admitted that: “No assessment has been made.” This seems an oversight given prohibition’s track record of creating black markets. Since the government intends to hand the entire tobacco industry over to criminal gangs sooner or later, it seems worth asking whether this would, on balance, be a good thing.
O’Brien professed to be unconcerned, adding that “History shows whenever we introduce new tobacco control legislation and regulations, illicit tobacco has decreased, due to strong enforcement. Consumption of illegal tobacco has gone from 17 billion cigarettes in 2000/1 to three billion cigarettes in 2022/23.”
History shows nothing of the sort. “New tobacco control legislation” has been more or less continuous under this nominally Conservative government and yet the sale of illicit tobacco has not continually declined. There have been peaks and troughs but the figures have generally moved upwards, with the share of tobacco sold illegally rising from 14 per cent in 2010/11 to 18 per cent in 2021/22. A further 4 per cent is bought legally abroad but has no duty paid on it in Britain.
It is true that the amount of illicit tobacco has dropped in absolute terms but that is mainly due to the number of smokers falling, and the decline has not been as steep as O’Brien’s comparison with 2000/01 suggests. That was the year when the British took full advantage of the EU replacing duty-free shopping with unlimited tax-free shopping and white vans were hurtling back and forth between Dover and Calais loaded with booze and fags. This was later brought under a semblance of control after the European Commission introduced advisory limits (800 cigarettes per person) and Customs impounded thousands of vehicles.
A country where one in five cigarettes is sourced on the black market and a third of rolling tobacco is bought illegally is not a country that can afford to be complacent about the illicit trade — and all these figures are likely to be underestimates, as I argued a few weeks ago.
In any case, what Sunak is proposing is more than just a bit of tobacco control legislation. He is literally going to ban the sale of tobacco, year by year, until no one is allowed to buy it. In the short term, this will create more of a grey market than a black market: older adults will buy tobacco for their slightly younger friends. But in the long run — or sooner if the government bans proxy purchasing (as it has proposed) — the only way millions of people will be able to get hold of cigarettes will be to buy them from illicit sources.
This is hardly a fringe theory
This is hardly a fringe theory. It would not be a black swan event if the prohibition of a popular product led to a certain amount of under-the-counter activity. You may have heard about what happened with alcohol in the USA between 1920 and 1933. You may be familiar with the war on drugs. You may even know what happened when Bhutan banned tobacco (it didn’t go well) or when South Africa temporarily banned cigarettes during the pandemic (ditto). Banning the sale of tobacco without assessing the impact on the black market is like giving car keys to a drunk without assessing the impact on pedestrians.
Neil O’Brien is not an idiot. He has just been told what to say by the idiots at the Department of Health and Social Care. Either way, the idiots are at the wheel and are driving us headlong towards disaster. With their fingers stuck firmly in their ears and their heads filled with Panglossian fantasies, they will not listen to the lessons of economics or history or even basic common sense. What could possibly go wrong?
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