Budget 2014: tobacco duty
Wednesday, March 19, 2014 at 13:13 Currently watching the Budget on TV and following it online.
Commentators seem to be agreed that the cost of cigarettes will rise by 28p for a packet of 20.
The good news is that's less than the 50p (or five per cent) increase ASH were seeking.
Should get confirmation shortly.
In the meantime Forest has three responses waiting to hit the media:
One, our reaction to a large (five per cent) increase.
Two, our reaction to the anticipated increase.
Three, our response to a freeze on tobacco duty.
I was going to draft our response to a £1 reduction in tobacco duty (our preferred option!) but what are the odds?
Update: Tobacco duty to rise by two per cent above inflation (ie as predicted).
NEWS RELEASE Wednesday 19 March 2014
Increase in tobacco duty will hit poor and elderly the hardest, say campaigners
Responding to the increase in tobacco duty (two per cent above inflation), Simon Clark, director of the smokers' group Forest, said:
"Recent history shows that increasing tobacco duty above inflation fuels illicit trade and costs government money.
"The Treasury loses billions of pounds to illicit traders every year. A further increase in duty will merely encourage more people to take advantage of the huge savings available on the black market.
"Law-abiding consumers are being penalised while poor and elderly smokers will be hardest hit."
Update: Budget 2014: Response from Oxfam, CBI, TUC, TaxPayers Alliance and Forest (Politics.co.uk)
The Grocer also quotes Forest: Osborne scraps the alcohol duty escalator.
Update: George Osborne today announced that tobacco duty will continue to rise at two per cent above inflation until the end of the next parliament.
There is no health reason not to, he said.
Brian Monteith disagrees. See Osborne is wrong: there is a health case for abolishing tobacco duty escalator (The Free Society).
Update: Chris Snowdon has written a very good post for the IEA blog, Budget reaction: Drinking, gambling and smoking.
Reader Comments (6)
Man with black market cigs in his bag will be worshiping Osborne as more kids are left with no protection from street sales and snobs in the smokerphobic industry ignore that their demands will see an increase in child smoking not seen since the 1960s. What a bunch of regressives. It's not about health.
Spending money taken in tax on fake charities like ASH should be a criminal offence for politicians. Resignation from politics would be honourable, but there is none.
Only last week 4.5M smuggled cigarettes seized at Port of Felixstowe. Had these cigarettes reached the streets it would have lost the treasury about £600,000.
https://www.gov.uk/government/news/4-5-million-smuggled-cigarettes-seized-at-felixstowe
That's not to mention the massive seizure at the port last year.
http://www.eadt.co.uk/news/felixstowe_huge_tobacco_smuggling_bust_at_port_1_1010705
Now try to tell me ASH that increased taxation does not increase smuggling.
Although I disagree with the principle, simply because it's unfair, with tobacco already being so expensive, isn't putting 28p (or even 50p) onto a packet of cigarettes a bit like adding £50 to the price of a Ferrari??
I'd be interested to know at what point increasing the price of cigarettes stopped being a disincentive to smoking and became instead a disincentive to Governments to discourage it. I'd guess that we probably passed that point some decades ago which is why, when politicians - all oh-so-keen to exhibit their anti-smoking credentials - voted in the smoking ban, they missed the golden opportunity (which would have been seized with great fervour, had they really believed all the anti-smoking rhetoric) to make tobacco completely illegal.
Remember, every penny they steal from us, irritating though it is, makes us just that little bit more essential for their survival. And they know it.
Seems your commentators were incorrect.
24p on 20 fags, 23p on 25g fag tobacco, 13p on pipe.
http://www.hmrc.gov.uk/rates/tobacco-duty.htm
Having wrestled with the decision of whether or not to go to 'man with a bag' for several years now, I've now reached the point where, if I'm to continue to smoke, MWaB it has to be!
If I'm completely honest, I should have made the leap 2 or 3 budgets ago, but I was uneasy about funding criminality and persevered. However, after following the Tobacco Control 'science' it seems I'm funding criminals of one sort or another. I might as well fund the cheapest. :-(
Well done, Gideon, that's £2500+ you've just lost.