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Currently, smoking is still the main cause of severe disease, premature death and disability in the United Kingdom. It is estimated that in England alone, smoking causes more than 80,000 deaths every year and about 8.5 million people are still smoking today (Department of Health, 2009a). Therefore, reducing the consumption of cigarettes in the UK has been an urgent and crucial action to improve the public health. The UK government has already responded to this in a number of ways.
This report is based on three main economics theories. The first theory is externality which can be divided into two types-positive and negative. Negative externality exists when the decision of an individual exerts adverse impact on the third party (The Free Dictionary, 2010a). The second one is price elasticity of demand, which means according to Anderton (2008), the number that shows the reaction of demand for one good to the change in price. Last, MiMi (2009) defines government intervention as the action taken by the government that affects market operation. Regulation is one kind of government intervention which can be considered as legal restrictions promulgated by government authority (The Free Dictionary, 2010b).
This report has three aims. Firstly, this report will research the three main policies of reducing cigarette consumption that the UK government has implemented. Secondly, it will discuss the policies adopted by the UK government and how effective these policies are. Finally, it will summarize what can be learnt from the assessment, evaluate the findings and put forward some recommendations for future actions that the UK government can take.
The UK government has implemented three main policies to reduce smoking prevalence-prohibition of cigarette advertising, smokefree policy and taxation.
2.1 Prohibition of cigarette advertising
The UK government prohibited most of the tobacco advertising including sponsorship in the first half of 2003. Another regulation also banned 'brandsharing' - 'the promotion of a tobacco product by another product' such as clothes and perfume. In addition, regulations prohibiting tobacco advertising on the internet was also put into practice in September, 2006 (Department of Health, 2009b).
2.2 Smokefree policy
The government has introduced a smokefree policy which restricted smoking in virtually all the public places and workplaces in the UK including all pubs, clubs, membership clubs, cafes and restaurants. This policy came into force at the first day of July in 2007 to prevent citizens in the UK from being exposed to secondhand smoke (Department of Health, 2009c).
The government charged heavy taxes on cigarettes. It is reported by eSchorlarship (n.d) that the UK has the highest level of tobacco tax in the world, accounting for approximately 79% of the cost of cigarettes. Figure 1 clearly shows a connection between cigarette tax and consumption. A steady increase of cigarette price with a continuing decrease in its consumption can be seen during 1970 and 1994 in the UK. BMA (n.d) estimated that in high-income countries such as the UK, a 10% increase of tobacco price resulted in a 4% decline in smoking prevalence and the rate doubled when concerning teenagers.
3.1 Government intervention
3.1.1 Prohibition of cigarette advertising
Investigation made by Department of Health (2009a) showed that the prohibition of cigarette advertising in the UK had played a vital role in reducing cigarette consumption. It would lead to a 2.5% decrease in smoking levels, in long term. Generally, cigarette advertising has a powerful influence on different groups of people. Initially, cigarette advertising often highlights the most striking features of tobacco products, such as masculinity and independence. These characteristics tend to induce non-smokers to try the product and regular smokers to smoke more. In addition, cigarette advertising usually neglects the adverse impacts of smoking while exaggerating its benefits to make it more attractive. For example, smoking produces considerable negative externality to the society by increasing public healthcare and hospital costs of treating smoke related diseases. In the UK, the NHS spends more than ?1.4 billion every year in the treatment of diseases caused by smoking (SHOUXI, 2007). However, the UK cigarette advertising hardly mentions this negative effect of smoking. Instead, it highlights the pleasure that can be obtained from smoking. Consequently, smokers may be further captivated by tobacco products, regardless of the harm they produce. The government has realized that cigarette advertising encourages consumers to purchase cigarettes, increasing cigarette consumption. As a result, it banned both the direct and indirect cigarette advertisements to weaken the external motivation for buying cigarettes, effectively leading to a reduction in cigarette consumption.
3.1.2 Smokefree policy
The introduction of the smokefree policy in the UK generally contributes to a downturn in cigarette consumption. It was responsible for a total decrease of one billion packs of tobacco consumption per year in the UK and more than 400,000 smokers quitted smoking after this policy has implemented for one year (E-Quit Chinese, 2007). This policy in the UK works relatively well owing to several reasons. First of all, it can reduce the opportunity to smoke, especially for those smokers who have a permanent job or usually seek entertainment in public places such as clubs and pubs. Their tobacco addiction may be gradually weakened and some smokers even try to quit smoking because they hardly have chance to smoke in the workplaces or public places in the UK. BMJ (2002) concluded that smoke-free workplaces could lead to 3.1 fewer cigarettes smoked per day by a regular smoker. In addition, this policy can stimulate people's positivity to fight against smoking. Individuals who suffer from passive smoking are now entitled the right to resist smoking in the workplaces or public places, strengthening the effect of this policy. In sum, the smokefree policy in the UK reduces smokers' daily cigarette consumption as it does to the overall cigarette consumption.
There is strong evidence from EScholarship (n.d.) linking increase in price due to taxation to decrease in demand for tobacco products in the UK. The government has been maintaining the highest cigarette taxation rate in the world, 79%, to minimize the numbers of smokers. Figure 2 justified that the price elasticity of demand for cigarette was relatively high which means the UK consumers responded enormously to the change of cigarette price. The consumption of cigarettes dropped sharply from approximately 14,500 to 9,500 packs. This is because when the cigarette price rises due to the increase of the taxation rate, some smokers tend to reduce their tobacco expenditure or even be induced to quit smoking. At the same time, non-smokers are likely to be prevented from starting, in view of the high price of cigarette. Furthermore, this taxation policy is particularly effective for teenagers. They are more sensitive to the price variation because tobacco spending will become an increasingly heavy financial burden for them with the price rise. In the UK, a 10% increase of taxation rate leads to an 8% or more reduction in youth tobacco consumption and the rate is more than twice as adult (BMA, n.d).
3.2 Negative point of the three policies
Though the UK government interventions can effectively reduce cigarette consumption, these policies have some negative points which should be mentioned. To begin with, these three policies may result in serious unemployment problems in certain industries including the tobacco industry and advertising industry. Moreover, an exorbitant tobacco taxation rate results in cigarette smuggling activities due to the attractive high profit. The UK government estimated that 20% of cigarettes consumed in the UK were smuggled (Informaworld, 2002). Because of this, these policies lose their intended effects with an increasing smuggling rate and tobacco black market.
To sum up, the discussion above clearly shows that the UK government's interventions in reducing the consumption of cigarettes are effective. The prohibition of tobacco advertising impairs the external motivation for purchasing cigarette from media; the smokefree policy limits smokers' opportunity to smoke; the increase of the taxation rate results in more cost per cigarette, lessening smokers' overall consumption. The cigarette prevalence has been effectively reduced by executing these three policies together by the UK government. Whereas the government should determine some methods to solve the unemployment, smuggling and black market problems posed by these policies.
Based on the conclusion above, other strategies should be considered to strengthen the effect of these three policies in reducing cigarette consumption. The most radical method that can be adopted is education. Propagandizing the negative influence of smoking in community is necessary, especially to teenagers. Moreover, the taxation rate should be controlled at an optimum level so that cigarette smuggling and black market will not be encouraged. Finally, the government should strengthen the monitoring systems in the UK. For example, it can impose stronger penalties on smoking in public places or workplaces to make sure these policies are strictly implemented.
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- Harlow: Pearson Education
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