Do higher taxes lead to less smoking and drinking?

Sunday 10 September 2017

A review is to be conducted into whether raising the taxes on tobacco and alcohol translates into lower levels of drinking and smoking in the island.

The Corporate Services Scrutiny Panel are currently laying the foundations for a review into the government’s 2018 Budget, with a particular emphasis on whether increasing impôts duties translate into tangible health benefits.

Taxes on the substances have been consistently rising for a number of years – with the exception of 2017 – leading to higher priced cigarettes and alcohol.

Ministers have continued to justify the move by stating that it will discourage smoking and drinking, of which the island has been criticised in the past, for having among the highest rates in Europe.

Nonetheless, a recent government survey revealed that around one fifth of Jersey’s population are smokers and that the proportion of daily smokers had only reduced “marginally” in the decade since indoor smoking was banned in 2007. 

The survey also revealed that the frequency of islanders drinking alcohol had only changed marginally in the last three years, with a quarter of over 45s drinking alcohol over four times a week.

Impôts on alcohol and tobacco raised more than £58.4million last year alone. The destiny of those revenues, however, was a particular sticking point at a previous Scrutiny hearing.

Pictured: The duties raised nearly £60million last year. (States Accounts/States of Jersey)

Deputy Simon Bree, Vice Chairman of the Corporate Services Panel, grilled the Treasury Minister over whether those profits would be ring-fenced for health problems relating to smoking and drinking.

But the Minister, Senator Alan Maclean, claimed that the Department would not pursue a policy to reserve those proceeds.

The Corporate Services Panel are also due to review Jersey’s External Relations Policy. They will particularly consider the effectiveness of Jersey’s satellite offices in London, Brussels and Caen and whether they are a value-for-money operation.

Deputy John le Fondre, Chairman of the Panel stated: “The preparatory work for the 2018 Budget, picks up on areas that we have previously identified as requiring further work. This review will pull a large amount of evidence together and provide a platform for the Panel’s work on the Budget itself.” 

Deputy Simon Bree added: “With Jersey increasing its presence on the international stage, having an effective external relations policy is more vital than ever before. This piece of work will review both how suitable the Island’s policy is for the current day, as well as how it is applied operationally.”

Next on their agenda, however, will be a quarterly public hearing with the Chief Minister on 15 September. Members of the public are invited to submit their questions by tweeting @Jerseyscrutiny, posting to the States Assembly Facebook page or emailing scrutiny@gov.je. The deadline for receiving questions is 12pm on Thursday 14th September.