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March 03, 2006

Cutting VAT on Condoms

I’m really not sure what effect this will have:

Less VAT is to be levied on condoms and the morning after pill as the Government attempts to reduce the high level of teenage pregnancies and the epidemic of sexually transmitted diseases.

The plan, to be announced in the Budget on March 22, would cut about £4 from the cost of the pill bought off prescription and between 30p and 50p from a packet of three condoms.

Last week ministers were embarrassed when figures showed that attempts to reduce teenage pregnancies by half by 2010 were well behind target. A teenage pregnancy unit had been established and £150 million spent on the campaign.

OK, sure, standard economic stuff, lower the price, more should be sold. But I’m still not sure about it. Given the number of places one can get such things for free I’m not sure that the use or non use of condoms is actually driven by the price. I did like this comment though:

But Jan Barlow, the chief executive of Brook, which provides contraception and health advice to young people said condoms were a necessity not a luxury.

Really? Sex is now a necessity? So when do we get the campaign for it to be assigned on a fair and equitable basis? The re-allocation from those getting to much to those under-provided? Fairness in matters of sexual gratification? When do I get the timeshare with one of Sven’s mistresses?

March 3, 2006 in Taxes | Permalink

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Comments

It's about time. The price of going up has been going up for years.

Posted by: Tim Newman | Mar 3, 2006 9:36:28 AM

[Given the number of places one can get such things for free I’m not sure that the use or non use of condoms is actually driven by the price.]

remember a lot of condoms are sold in vending machines. If you buy a pack of cigarettes from a machine it will usually have 16 fags in it rather than 20 because this is how the manufacturers deal with price increases in the underlying goods when they don't want to change the sticker price from a round number. Something similar presumably happens with condoms, so the price sensitivity might be a lot more than you think if it means that the manufacturers don't have to turn a "packet of three" into a "packet of two".

Posted by: dsquared | Mar 3, 2006 10:49:33 AM

But, Daniel, if, as I suspect, condoms in vending machines are largely used for 'emergency' (ie. must. get. laid. tonight) purposes, then surely having two instead of three shouldn't be that much of a problem?

Posted by: lth | Mar 3, 2006 12:11:49 PM

I am pretty sure that it would reduce the probability that, at any given time, you had a spare one in your pocket. The really frightening thing is that I actually probably remember enough inventory theory to make a model and check this, but I am not quite mad enough to do it.

Tim adds: I’m pretty sure that would depend on the age of the purchaser. As time goes on a packet of three changes from being an evening’s supply to a week’s...and further if those older than I are to be believed.

Posted by: dsquared | Mar 3, 2006 2:05:26 PM

I wonder if there will be an increase in the costs of production to coincide with this tax decrease?

Polly Toynbee might be wrong, but this makes her more right!

Posted by: PostPunkUnkle | Mar 3, 2006 2:36:41 PM

Just noticed something. Jan Barlow said condoms were necessary. She never said sex was necessary. Condoms might be necessary for something else.

Posted by: PostPunkUnkle | Mar 3, 2006 4:16:17 PM

If anything, we know that if you're desperate to get your end away and think you're in with a good chance, then money's no object. ("Another expensive cocktail? Why sure, honeybunch. Have as many as you like").

Posted by: Scott Campbell at Blithering Bunny | Mar 3, 2006 4:57:11 PM