Monday, 1 February 2010

The Mask Slips (Follow The Money)


OK, we've established that it's not about health, and noted the clinking of champagne glasses as sales bonuses come flooding in for ASH and Pfizer et al.

So, is there anything in it for Andy Burnham and the Labour administration? Why, of course there is.

Immediate investment in extra overseas officers to stop 200 million illicit cigarettes entering the UK every year.

My, my, wouldn't that be expensive in a recession? You know, with all the cuts that will have to be made?

Of course not, the funds were prepared last year and, as such, it has been well and truly costed already.

When VAT was temporarily reduced in December 2008, tobacco and alcohol excise duties were increased to compensate, leaving prices broadly unchanged. However, when VAT returns to 17.5%, there will not be a compensatory reduction in excise duty. Therefore, the raising of VAT from 1 January will have a unique impact on the tobacco and alcohol sectors. It will lead to increases of between 13-18 pence on a pack of cigarettes, representing the largest single tax increase since March 2000, when smuggling was at its peak.

So the best way to tackle the increased attraction of smuggling, created by the exchequor, is to employ a few people to stop it ... from the super profits gained by Darling's quiet little exemption in 2008.

Will the wages paid out account fully for the huge windfall from this accounting subterfuge? Well, considering the extra VAT take is probably in the region of £40m per year (based on an a real terms increase of 2.17% on £1.8bn, and that's just the tobacco take), no they won't.

And the best thing is that many of those officers won't be needed for too long anyway, as the WHO are already in the process of stopping the only good thing about the bloody EU, the booze and fag cruise.

Great little scam, and bloody good for increasing the state payroll (and with it potential Labour voters) whilst simultaneously shrugging shoulders and pocketing the cash when the WHO and EU wade in and dull our lives further.

Still not about health, then.