Simon Clark - Taking Liberties

Forest's response to the increase in tobacco duty announced today by the Chancellor:

INCREASE IN TOBACCO DUTY PENALISES LAW-ABIDING CONSUMERS, SAYS FOREST

The smokers' lobby group Forest has criticised the Chancellor’s decision to increase tobacco duty by two per cent above inflation, arguing that it penalises "law-abiding consumers".

Director Simon Clark said: "Law-abiding consumers who buy their tobacco in British shops are being penalised unfairly.

"The policy also discriminates against those who can least afford it, especially the elderly and the low paid.

"Increasing tobacco duty could cost the government billions of pounds. The people who will benefit most are black marketeers and those who purchase their tobacco abroad."

He added: "The Chancellor said the government's policy on tobacco will reduce smoking. It's not the government's role to force people to stop consuming a legal product. That's social engineering, which we deplore."

Update: Expect an increase of 33-50p on a pack of 20 cigarettes, and around 67p on a 25g pack of hand rolling tobacco.

Update on Wednesday, March 23, 2011 at 14:18 by

Simon Clark

What the Chancellor announced today:

Tobacco duty rates – as announced in the March Budget 2010, tobacco duty rates will increase by 2 per cent above the RPI. Duty on hand rolling tobacco will increase by an additional 10 per cent. These changes will come into effect from 6pm on 23 March 2011. (Finance Bill 2011)

Changes to the tobacco duty regime – the Government is also restructuring cigarette duty to support health objectives. As a result, ad valorem duty on cigarettes will decrease to 16.5 per cent, and specific duty will increase by 25 per cent above the RPI. This will target the duty increase on cheaper cigarettes, adding 50 pence to a packet of economy cigarettes and 33 pence to a packet of premium cigarettes. These changes will come into effect from 6pm on 23 March 2011. (Finance Bill 2011)

Tobacco: tackling fraud – The Government is fully committed to tackling the illicit trade in tobacco to protect public finances and support health objectives. HMRC and the UK Border Agency will be introducing a renewed strategy to tackle this fraud from April 2011.

The Tobacco Manufacturers Association reports that "According to latest data available from HM Revenue & Customs, up to 22% of cigarettes and 61% of handrolling tobacco consumed in 2008/09 avoided UK duty. This equates to a revenue loss to the Treasury of £3.8 billion (£10.4 million per day)."