The European Court of Justice has decided that Ireland, France and Austria cannot set minimum prices for tobacco products. At the moment tobacco prices in many countries, including the UK, have a great deal of variation. A packet of 20 fags can cost between £4 and £6.50. When governments use taxes to try and discourage smoking for health reason many smokers can absorb the price increase by switching to a cheaper brand, which they do rather than giving up, making the reasoning behind the health tax defunct. The EU, however, argues that binding prices restricted manufacturers’ freedom to set prices, thereby posing a risk to free competition.
Jeff at SNP Tactical Voting notes how this could have a knock on affect on plans for minimum prices for alcohol proposed by the Scottish Government. Although Nicola Sturgeon claims that the decision will not affect the alcohol proposals, like Jeff I'm not convinced.
Another knock on affect could be on National Assembly plans to reduce the use of plastic bags. A number of countries have tried to reduce the use of bags by taxing them. In some US states one has to pay a tax of between 5c and 17c for each bag issued, for example. However, the National Assembly has no tax raising powers so their plastic bag tax plan is in effect a minimum pricing plan where shops will be forced to sell bags at a set price. So the Assembly might have to think again about this policy in light of the EU's ruling.
Just a thought, The Assembly explicitly has no tax raising power, but would local authorities have the power to tax plastic bags?
ReplyDeleteAn interesting thought, Welsh Connection. It would need an LCO in order to enable the Assembly to instruct / encourage councils to raise revenue in this way but it is, in theory, a way of dealing with the problem.
ReplyDeleteTax the plastic bags?? The idea that somehow the bag tax will be "good" for the environment is ludicrous.
ReplyDeleteLook inside the bags, and what is there? Plastic milk bottles, bread in plastic, plastic trays of fruit and veg, plastic-wrapped meat, plastic lids on plastic jars.....plastic bags of frozen food...
There`s ten or twenty times the amount of plastic wrapping going into every shopping bag, but never mind, eh?
Just another daft tax to line the coffers of the state.