Thursday, 9 February 2012

Sarah Wollaston misled the House

Dick Puddlecote rightly applauds Philip Davies (Con) and Eric Joyce (Lab) for standing up to that appalling Tory paternalist Sarah "let them drink champagne" Wollaston (Doctor's Party) yesterday. Sadly the rest of the MPs demonstrated why the public holds them in such contempt. I considered fisking the whole debate but it is late and it would be exhausting to take on every politician who misled the House. Did I say "misled the House"? That's parliamentary euphemism. They lied. They lied again and again, and if they didn't know they were lying, they're too stupid to be public servants and should be sacked anyway.

Tim Worstall has already picked up on the implicit belief that minimum pricing will raise the dead from their graves. A cretin named Valerie Vaz (whose speech has to be seen to be believed) made the absurd, unsourced claim that "the police ... have to clear up the mess on Saturday evenings at a cost of £13 billion." The bizarre myth that minimum pricing will cost moderate drinkers only £12 a year was repeatedly cited, and when Wollaston took the floor she showed herself to be incapable of understanding the difference between private and public costs, tangible and intangible costs, and internalities and externalities.

Sarah Wollaston (Totnes, Conservative): What about taxpayers? The cost of the epidemic is out of control. It is at least £20 billion...

Really? The actual cost to the taxpayer is "at least £20 billion"? Just to make sure that wasn't a slip of the tongue, let's look at Wollaston's op-ed at Politics Home yesterday...

Mortality is increasing and also the cost to tax payers; at least £20billion.

Yup, that's what she claims and that is what she told the mother of all parliaments. This would be a reference to the British Cabinet Office report of 2003 which found a total social cost of around £18-20 billion.

Of these costs, £4.7 billion were intangible costs (ie. they are hypothetical - they do not need to be paid by anyone, let alone the taxpayer).

A further £5.5 billion were lost productivity costs which, again, do not represent a bill that needs to be paid.

A further £5.1 billion were private costs related to crime which, once again, do not need to be recouped through the tax system, and the author of the report stressed repeatedly that these costs were at the absolute top end of any realistic estimate.

The only costs which can be considered as "to the taxpayer" are £1.7 billion in healthcare and £2.2 billion in crime and punishment, but since the exchequer receives £9 billion a year in alcohol duty, that hardly makes a compelling case for a compensatory sin tax, does it? (Minimum pricing, as currently proposed, would not compensate the treasury in any case.)

...but if we look at the finer details of the impact on productivity, we will see that the evidence given to the Health Committee when it looked at this issue showed that the cost could be as high as £55 billion

This a reference to a report from the National Social Marketing Centre (Lister, 2007) which sadly is not available online, but I have a copy as I requested it last year.

£16.1 billion of these 'costs' are intangible—imaginary evaluations of life years forgone.

£5 billion are private healthcare costs.

£5.8 billion are private costs related to crime.

£8 billion is the amount spent on "misused" alcohol by consumers (yes, the money drinkers spend on drink is counted as a cost to the taxpayer in Wollaston's world).

Your "lost productivity" makes up £7.3 billion, but who pays this? At a push you could say the drinker pays it, but it's really just income forgone so nobody pays it. Certainly, the taxpayer is not left to pick up the bill. Even in the loosest definition, this is a further cost to the drinker, not the state.

This leaves £6.6 billion as a legitimate cost to the taxpayer. That figure is highly inflated for various reasons and does not include any benefits from alcohol, but it still remains lower than the £9 billion received by the treasury in alcohol duty. So even using these highly dubious figures, drinkers are subsidising teetotallers. From a purely economic standpoint, Wollaston should be petitioning for a maximum unit price.

I have much, much more to say on the subject of crooked cost-to-society estimates and will do so in a paper for the ASI in April. Every figure given by politicians and pressure groups which purport to show the cost of obesity, drinking and smoking wrongly portrays intangible private costs as financial public costs and portrays expenditure by consumers as a cost 'to society'. They are riddled with double-counting, they conspicuously fail to include benefits (such as duty paid) and they are designed only for advocacy.

But as bad as they are, none of the researchers who compile them would ever claim that alcohol costs the taxpayer anything close to £20 billion, let alone £55 billion.

And that is just one of the reasons why Sarah Wollaston misled lied to the House on Tuesday.


UPDATE:


Still more ignorant is Kevin Barron, who said in the House last year:

We took evidence that the cost to the NHS could be as high as £55 billion a year.

Considering the entire NHS budget was £106 billion in 2011/12, you'd have to be out of your mind to think that £55 billion was spent on alcohol-related diseases. In fact, the high-end estimate is just £2.7 billion.

The situation is similar to that with tobacco: in the end, no one really knows the cost of the use of these products.

Especially our elected representatives...


PS. Eric Crampton has done some outstanding work picking these cost-of-drinking studies apart. This must-read paper relates to Australia and New Zealand but the dodgy methods are just the same as those used in the UK. (Short version here.)

14 comments:

Mag said...

Re: Tobacco

Chris, we need to understand how we got to this point. The Godber/WHO Blueprint is typically a good starting point.

There was a presentation in the 1980s (see Godber Blueprint) at one of the World Conferences on Smoking & Health concerning the “cost of smoking” to the health system. There don't appear to be any studies to that point. The presenter, who was partial to antismoking, concluded that smokers were not an additional cost. He also pointed out that these sorts of studies are highly arguable in that they rely on so many questionable assumptions. Obviously, the fanatics didn’t receive this presentation too well and simply disregarded it. For decades, they have been proclaiming that smoking/smokers are a burden to the health system, even though study after study over that time indicate that it is not true.

Through this fraudulent claim, the fanatics convinced governments to hike tobacco taxes to “cover” the extra medical services. Governments are only too happy to oblige; it means more money in the coffers. And the fanatics always insist that they should be given a cut of the extra taxes to continue “educating” the public, keeping them in comfortable employment. In the last decade, tobacco taxes have been hiked many times into the realm of compounded extortion. So inflated are the taxes that it’s impossible to hide the charade any longer.

Consider a recent “cost analysis” appearing in an Australian government publication. Net health costs of tobacco-use was estimated at $318,400,000 (p.51). The net revenue from tobacco sales was $6,700,000,000 (p.22). The revenue from tobacco is 21 TIMES the extra cost of treating smokers. Even the extent of this “extra medical cost” is arguable, but we’ll leave that for another time. The difference is obscene. There is not even any subtraction of forgone pensions.
http://www.nationaldrugstrategy.gov.au/internet/drugstrategy/publishing.nsf/Content/34F55AF632F67B70CA2573F60005D42B/$File/mono64.pdf

Mag said...

2
Governments and the fanatics that advised them aren’t going to come out and admit that they’ve severely overcharged smokers to the point of robbery and that the tax on tobacco should be considerably reduced. Given that the fantasy that smokers cost the health system can no longer be maintained, the fanatics do what they do regularly – they change the “argument” (storyline), i.e., shift the goalposts. NOW they argue, smokers [way] more than cover their additional health costs, but there are “other costs”. And the above report concocts around $32,000,000,000 of “other costs”. There isn’t time to consider how all these “other costs” are entirely arguable. However, the absurdity of the claims attracted some rare criticism. Further, these “costs to the State” smack of a socialist framework where individuals are the property of the State, with the expectation of a particular, average “working life” able to be extracted from each individual.
http://www.theage.com.au/national/economists-challenge-healthist-view-of-smoking-alcohol-risks-20111221-1p5nl.html

Shifting the “storyline” or goalposts keeps the ideological fanatics happy (and they usually call for additional funding to help “educate” the public), Gigantic Pharma is happy because it can keep peddling and profiting from its essentially useless NRT wares. And the government is happy because it can claim that it needs to extort even more taxes from smokers. There is now a lucrative antismoker industry that did not exist 30 years ago. From part of the extortionate taxes, it is smokers that are financing a considerable portion of it: They are being forced to pay for their own persecution. It is a very sick, fraud-based, self-serving system. It can well be referred to as racketeering.

Ann W. said...

Although I find most of the information questionable in the study I have shown some quick examples of playing with the numbers.

UPDATE ON SMOKING COSTS TO SOCIETY
Analysis Report Prepared for: Québec Coalition for Tobacco Control January 15th, 2004

2.1. Increased Absenteeism
The average number of sick days for current smokers and former smokers was estimated at 13.5 per year, and 11 for those who never smoked. Therefore, non-smokers were absent 1.8 days less per year than smokers.

2.2. Decreased Productivity
To express this cost on an annual basis, we determined the number of workdays in a year. Since the calendar year consists of 365 days, we excluded 104 days for weekends, 10 for holidays, 15 for vacation days, and 7 for sick days8, thus leaving 229 workdays.

Double dipping: In 2.1 Increased Absenteeism it states that smokers take 13.5 sick days per year but in 2.2 they are only credited with 7 sick days, a difference of 6.5 days or 6.5 extra cigarettes breaks @15 minutes equals 1.625 hours per year x 1,609,944 males @ $19.62 per hour equals $51,329,039.58. For the 1,294,160 females x 1.625 hrs per year x $15.98 per hour equals $33,606,099.80. Therefore the cost of $2,992,330,295 in decreased productivity is overstated by $84,935,139


2.3. Increased Life Insurance Premiums

Cost of increased life insurance premiums per smoker $86.97 times the 2,904,104 employees who smoke total cost 250 million dollars

“According to Statistics Canada, over the course of the survey period (1999 to 2005), the number of workplaces providing non-wage benefits rose by over six percent, giving almost three-quarters of all Canadian workers (74 percent) access to at least one non-wage benefit. Health benefits plans are the most common type of non-wage benefit in Canada. Fifty-nine percent of workers have life and disability insurance, 56 percent have dental plans and 51 percent have supplemental medical insurance”.

So if only 59% of workers have life and disability the excess premium of $86.97 should only have been charged for 1,713,421 employees for a total 149 million making their figure overstated by a hundred million.

And my favourite footnote of this study

(20) Taxes paid on tobacco manufacturers’ profits and their employees’ revenues were voluntarily excluded from our analysis, since the tobacco industry’s profits would have been transferred to other sectors in the absence of this industry. Similarly, tobacco workers would

Ann W. said...

Sorry cut this off from the first post.

Similarly, tobacco workers would have worked in other sectors, and we have no reason to think that they would not have paid equivalent taxes.

Michael J. McFadden said...

So, out of the 20 billion total, about 5 billion were "lost productivity costs" : "intangible—imaginary evaluations of life years forgone."

Given the general political leanings of many of the smoke banners here in the US (and in the UK as well?) it would be interesting to apply this same analysis to the cost of abortions.

Just think of all the productive labor that is being robbed from the coffers of The State by all those bloody little fetuses (feti?) that never get to go on and spend 40 or 50 years digging gold up out of the mines for the benefit of the state treasuries!

Taxpayers should be OUTRAGED! (And, as anyone from the 60s/70s knows, Birth Control Is A Communist Plot!)

- MJM

Simon Cooke said...

I picked apart Sarah Wollaston's mortality statistics too!

http://theviewfromcullingworth.blogspot.com/2012/02/is-sarah-wollaston-telling-porkies-or.html

Anonymous said...

Slim truth in fat figures

Michael West
November 23, 2011 - 11:39AM.



A leading actuary has lampooned health lobby figures on the costs of smoking and obesity as being extravagantly inflated and based on suspect methodology.

“The numbers are all over the place,” writes Geoff Dunsford in the September edition of Actuary Australia. And they are “big numbers” – the implication being that they are too big.

“Obesity costs $58.2 billion,” he exclaims, “that’s around twice the cost of age pensions!”

http://www.smh.com.au/business/slim-truth-in-fat-figures-20111123-1ntr5.html#ixzz1eWya8CpQ

Mag said...

These “analyses” are typically based on the delinquent assumption of underlying causation for a single phenomenon (e.g., smoking).

This also applies to the supposed “cost to employers”. For example, the “cost of smoking breaks” is based solely on an “average number of smoking breaks x time”. This approach assumes that all other employees – indoors – are always at “full production”. This is simply not true:

Concerning smoking bans in the workplace, a considerable amount of time, and accepted as an aspect of workplace life, is wasted by all employees. The antismoking claim that "smoker-costs need to include breaks at work for smoking" is never challenged. The position assumes that nonsmokers are comparatively always fully working. However, there are many examples of significant time wasted by all workers (see links following). In other words, smoke-breaks are offset against other forms of time-wasting (non-productivity) by nonsmokers. There is no evidence that smoking breaks add to “time wasted” generally. Smoke breaks might even involve work-related information. There is also the reasonable requirement of anyone taking a short break every hour from sitting in front of a computer, for example. Also, there are instances where smokers, unreasonably, already make up the time for smoke breaks, voluntarily or otherwise, at their workplace. Smoking breaks provide no information on actual productivity.

Add w’s to tensor.com/news/wasting-time-at-work

Mag said...

Consider absenteeism and health insurance. Smoking is more highly, although not highly, correlated with absenteeism and higher health insurance. Smoking itself may be correlated with far more relevant factors, e.g., alcohol consumption, single parents looking after sick children. Also, nonsmokers may have a tendency to return to work too soon following illness compared to smokers as a group, i.e., irresponsible. There are a variety of ways of interpreting the available, very-limited information. The problem is that very few factors other than smoking are ever explored; smoking status is very easy – too easy - information to acquire. Unfortunately, an antismoking document will erroneously assume that, due to positive correlation, smoking, singularly, “causes” the correlated absenteeism and higher health insurance.

Consider an example from Rampant Antismoking Signifies Grave Danger”. Oaks (2001) notes that some auto insurance companies charge higher rates for smokers than nonsmokers. This has nothing to do with smoking, per se. The rationalization is that a higher proportion of smokers are drinkers, and drinking and driving are more highly associated with accidents. Since the insurance companies do not have data on alcohol consumption, they charge all smokers higher premiums in attempting to tap into the correlation with higher alcohol consumption. It is just one instance where smokers as a group are being discriminated against, i.e., “shafted”, because smoking status, as opposed to other information, is too easy to acquire.

While there is an attempt to quantify intangibles such as the “cost” to families of “premature” mortality of a smoker – where smoking is assumed to be the singular cause of such mortality, these “cost documents” never factor the utility of smoking to smokers over their lives, and therefore extended to their families. Further, the “cost” to families of “premature” mortality may better be interpreted as the cost of Tobacco Control telling a family that someone’s mortality was singularly caused by smoking, i.e., inflammatory propaganda.

It is quite clear that these more recent “cost documents” are superficial, antismoking in disposition, are a cover for earlier extortionate taxes based on unfounded “extra” health-care costs, and pave the way for further extortionate taxes.

Nowhere in any of these “quantifications” is the cost to society of Tobacco Control activity considered. For example, direct economic consequences such as pub closures and extortionate taxes. The cost of encouraging a contraband market through extortionate taxes. What are the costs of denormalizing/stigmatizing/alienating a significant portion of the adult population? What are the costs of promoting irrational fear and hatred, discord, social division, and supremacism? How does one even begin to address such costs? What is the cost to society of the bastardization of science? What are the multi-dimensional costs of the medicalization of everyday life, of imposing physicalism – a dangerous philosophy - as the de facto definition of health?

Jonathan Bagley said...

Yesterday I emailed Sarah Wollaston regarding the £12 myth. I included the following calculation:

"21 units at 50p minus 21 units at 33p (£3.49 Valdepenas from Lidl - very drinkable) is £3.78 per week, or £196.56 a year - rather more than £12!

I may be fortunate in having sourced a decent table wine for £3.49, but people of moderate means generally spend no more than £3.99. This still works out at £131 a year; again, rather more than £12."

I received a prompt reply including:

"The stats are taken from the Sheffield university study commissioned by the DOH and furthermore your own stats are at the upper limit of weekly consumption plus the cheapest wine.

Does £4.50 for a bottle of wine really sound too much to pay?"

Yes, it does. Why would I be pleased to spend an extra £180 a year unnecessarily? The reference to £4.50 (which is more than the less well off would generally pay) suggests that the Sheffield study was talking about a 45p minimum, rather than a 50p - I can't remember. Hopefully Dr Wollaston has received several similar emails including similar calculations.

Anonymous said...

It begins to become apparent that the nazis are taking any medical condition known to man and blaming it on whatever product or fictional malady they deem appropriate. As is the case with smoking,second hand smoke,drinking,obesity etc.....

Anonymous said...

Chris,

Very slightly off topic perhaps but just wondered if you'd seen Glantz's latest venture into economics:
http://www.sciencedaily.com/releases/2012/02/120206174211.htm

Tony

Snowdon said...

Tony,

Indeed I have. I looked at the 'study', which is so uninformative that it's impossible to check very much of it. He does seem to accept that 10,000 jobs will go, but he thinks that's OK because it will create 12,000 jobs in tobacco control!

CJS

An said...

You can read The Mechanic’s latest rant here:
http://tobacco.ucsf.edu/bbc-lobbying-weaken-welsh-smokefree-regulations-yes-real

The spittle is really projecting from The Mechanic’s fanatic-fuelled chops, even firing up the flaring nostrils.