The government’s tobacco tax will hit the poorest hardest and encourage smuggling, smoking bodies have warned.
Rishi Sunak‘s plan to hike prices by 88p to around £13.60 per pack will blow holes in the wallets of those worst hit by the pandemic, they said.
Smokers’ group Forest blasted the move and claimed it could see a surge in ‘unregulated and counterfeit’ products trafficked into the UK.
The Chancellor’s Budget on Wednesday unveiled the latest tax hike for tobacco, which will see the cheapest cigarette packets rise by 63p to £9.73.
He said duty rates on all tobacco products will increase by the Retail Price Index measure of inflation plus 2 per cent.
Rishi Sunak’s plan to hike prices by 88p to around £13.60 per pack will blow holes in the wallets of those worst hit by the pandemic, smoking bodies have warned (file photo)
The Chancellor’s Budget on Wednesday (pictured) unveiled the latest tax hike for tobacco, which will see the cheapest cigarette packets rise by 63p to £9.73
Simon Clark, director of Forest, told MailOnline: ‘Smokers are sick and tired of being targeted every year with above inflation increases in tobacco duty.
‘The majority of smokers come from poorer backgrounds. Many have suffered financially as a result of the pandemic and should not have to face yet another increase in the cost of tobacco at a time when they can least afford it.’
He added: ‘Increasing the rates of tax on tobacco will inevitably encourage illicit trade which hurts legitimate retailers and puts consumers at even greater risk from unregulated and counterfeit tobacco.’
Tobacco smuggling is an industry worth around £2.2 billion a year, the latest figures show.
HM Revenue & Customs says: ‘the illicit tobacco market in the UK has changed significantly since 2000.
‘Historically it was made up of genuine UK brands of tobacco smuggled from lower-priced EU countries.
‘Currently, it is much more a mix of genuine UK and non-UK brands of cigarettes, hand-rolling tobacco, counterfeits, and increasingly, illicit whites.’
Hand-rolling tobacco has also increased due to the Budget – by RPI plus 6 per cent meaning a 30g bag will now cost over £9.02.
The minimum excise tax will go up by RPI plus 3 per cent. The changes came into effect at 6pm last night.
Ministers hope that the move will reduce the number of people smoking.
Hand-rolling tobacco will increase by RPI plus 6 per cent meaning a 30g bag will now cost over £9.02
But they were panned on social media following the announcement, with one branding the cost ‘ridiculous’.
Others pointed out the price of cigarettes had been hiked while at the same time taxes on some alcoholic drinks such as prosecco and cider were lowered.
Another wrote: ‘So the cost of cigarettes is rising again. Let’s not pretend this is about health.
‘Fact of the matter is even after taking into account how much the NHS spend on smoking related illness and disease the UK government make almost 15 billion pounds each year’.
Amanda Wardlaw added online: ‘Have no idea what price my fags are and am no looking forward to finding out.’
TOM UTLEY: I know few will pity me, but the tax hike on cigarettes has left me fuming (at a cost of £12k a year)
Did you notice a truly extraordinary omission from most of the coverage of Wednesday’s Budget? Well, I found it remarkable, anyway.
In all the thousands of words that I’ve read about Rishi Sunak‘s measures, and the hours of broadcast commentary I’ve listened to and watched, I’ve seen and heard barely a mention of a blistering tax increase that will affect some 7 million Britons — most of them from poorer backgrounds.
I’m thinking of the staggering rise in tobacco duty, which came into force at 6pm on Wednesday, just hours after the Chancellor sat down.
This added no less than 88p to the price of 20 cigarettes — by far the biggest single-day’s rise in my lifetime — pushing the average cost of a legally acquired packet to an almost unbelievable £13.60 (yes, you read that correctly).
The staggering rise in tobacco duty, which came into force at 6pm on Wednesday, just hours after the Chancellor (Pictured) sat down, added no less than 88p to the price of 20 cigarettes
Before I go an inch further, I must declare an interest: throughout my adult life, I’ve been an extremely heavy smoker. Pathetically addicted to tobacco, I can barely think straight without a cigarette in my mouth, let alone answer a letter or write a column.
So weak is my willpower — and here is a shameful confession — that for many years now, I’ve been puffing my way through no fewer than 50 Marlboro Reds every day.
Until this week, I never dared add up exactly how much my disgusting habit was costing me per year, although I knew it must be a king’s ransom. But I was so taken aback by that 88p-a-packet increase that I’ve finally plucked up the courage to do the sums and face the truth. The figures I’ve arrived at horrify me.
I’ve worked out that unless I manage to kick the habit, or cut down radically, Mr Sunak’s tax increase will cost me an extra £803 a year.
This will take my annual expenditure on cigarettes to — wait for it — £12,410. To put that into perspective, it is almost £2,000 more than my entire state pension for 12 months.
So much for the finding by Deloitte, the accountancy firm, that the Budget will leave married pensioners like me a grand total of £11 per year better off! Not if we smoke, it won’t.
Now, I know that very few smokers these days get through quite as many cigarettes as I do (though in my youth, when people were allowed to puff away almost anywhere, all day long, I had colleagues who claimed to get through as many as 100 a day; don’t ask me where they found the time).
I should also make clear that I’m not claiming for one moment to be poor — unlike the majority of smokers, who tend to have low incomes, as studies have consistently shown.
Throughout my adult life, I’ve been an extremely heavy smoker. Pathetically addicted to tobacco, I can barely think straight without a cigarette in my mouth
For the time being at least, while I still write this weekly column, I don’t have to rely solely on my pension to keep body and soul together. If I lost my job, however, I would certainly have to give up smoking tomorrow (though I mustn’t go putting ideas into my employers’ heads).
Indeed, the jaw-dropping price of a packet has set me wondering where on earth so many pensioners and others, much worse off than I, find the money to carry on smoking. Do they all buy their cigarettes from smugglers — as I’m told that many do?
All I can say for certain is that black marketeers will do very nicely indeed from this latest Budget. Nor will I be much surprised if we witness a surge of break-ins at tobacconists. I’d step up security, if I were in their shoes.
Of course, smoking was cripplingly expensive even before Dishi Rishi dropped his 88p bombshell — which, incidentally, he didn’t even think worth mentioning in his statement to the House, choosing to bury it instead in the small print on page 135 of the Treasury’s Red Book, which is always published on Budget day.
The difference is that in the past, Chancellors have always been careful to increase duty only bit by bit, year by year, so as not to shock too many addicts into giving up.
True, they never failed to claim piously that all they cared about was smokers’ health. But their overriding concern, or so it seemed to me, was to keep those lovely revenues pouring in.
Indeed, I remember swearing to myself, back in the 1980s, that I’d give up smoking if the price of a packet ever topped £1. But when it rose by only a little above £1, I thought: ‘Oh well, just a few extra pence won’t make much difference.’ Four decades on, with 20 cigarettes now costing more than £13, I’m still at it.
But in contrast to his predecessors at No 11, Mr Sunak doesn’t appear to care that by hitting us with that 88p increase, all in one go, he risks killing the geese that lay those golden eggs. It seems he really is on a mission to stop the nation from smoking.
But almost more remarkable than that massive extra burden on smokers is how very little attention it has attracted in the media.
I’m old enough to remember a time when a tax increase of only, say, 5p a packet would have featured prominently in all the news bulletins on Budget day. It would also have been splashed all over the front pages of the tabloids the following morning in huge capital letters: ‘CIGS UP 5p!’
Mr Sunak doesn’t appear to care that by hitting us with that 88p increase, all in one go, he risks killing the geese that lay those golden eggs. It seems he really is on a mission to stop the nation from smoking (Stock image)
This week, I heard not a word about the 88p in any of the BBC’s main news reports, though I tuned in to most of them. As for the papers, all those I’ve seen — including this one — tucked the news away on inside pages, as if it was of no special interest.
If you ask me, this reflects a sea-change in society’s attitude to smokers like me, who have become such a despised minority that few care a damn about our woes.
Indeed, I’m already bracing myself for the torrents of abuse I’ll receive over the internet after admitting that I’m a 50-a-day man.
Some will say people like me cost our precious NHS a small fortune (and never mind that I’ve contributed a great deal more to it, and so far used the service a great deal less, than many who attack me).
Ah well, at least they can comfort themselves with the knowledge that I’m likely to save the Department for Work and Pensions a few bob by dying some ten years younger than a non-smoker.
Others will confine themselves to observing that smoking is a repulsive, smelly habit, obnoxious to everyone around me.
To them, I can answer only that I know, I know. I wouldn’t for the world seek to encourage anyone to take it up. Indeed, I wish I never had, in those far-off days of my youth when I thought idiotically that it was sexy and cool. But, reader, I’m weak.
As for Mr Sunak, I have to grudgingly admire his political courage in slapping such a huge tax on 7 million men and women who make up 14 per cent of the electorate.
All I can say is that if anything this side of the grave will succeed in making me kick my revolting habit, this Budget will.
Source: Daily Mail