Oi! Hammond! No!!!
Friday, October 20, 2017 at 10:01 
I don't need to tell smokers how expensive it is to buy tobacco.
The UK is currently the second most expensive place in Europe to buy cigarettes and hand-rolling tobacco.
Ireland is the most expensive (their recent Budget pushed a pack of 20 cigarettes up to €12) but the UK isn't far behind.
Next month Philip Hammond will present his first Autumn Budget, having switched the Budget from the spring.
At the last Budget in March he announced that duty on tobacco products would increase by two per cent above inflation (the so-called tobacco escalator that was reintroduced by George Osborne in 2010).
As a result a packet of 20 cigarettes went up by 35p and the price of a 30g pack of rolling tobacco (which is now the minimum pouch size) went up by 42p.
At the same time Hammond announced the introduction, from May 20, of a minimum excise duty based on a packet price of £7.35, pushing the minimum price for a packet of 20 cigarettes up to £8.82.
Premium brands meanwhile went up to £10.26 (or more) per pack.
The fear is Hammond will take advantage of the new Autumn Budget to hike tobacco duty for a second time in nine months, which would be almost unprecedented.
Yesterday Forest published two briefing notes. The first highlights 'The effects of tobacco duty on households across the income distribution'. The second notes the 'The impact of using the retail price index in the tobacco duty escalator'.
Neither are what I would call bedtime reading but the press release offers a basic explanation:
Chancellor urged to reject a second tobacco duty increase this year
AUTUMN BUDGET – Campaigners have urged the Chancellor to help consumers who are “just about managing” and reject a second increase in tobacco duty this year.
According to the smokers’ group Forest, tobacco duty costs those with low incomes a far larger proportion of their income than those on higher incomes and further hikes would only exacerbate this unfairness.
Measuring expenditure on tobacco duty as a percentage of disposable income, in 2015/16 tobacco duty cost the average household in the lowest income bracket almost eight times what it cost the average highest earning household.
Although the average household among middle earners spent 38 per cent more on tobacco duty than the poorest households, as a percentage of disposable income the poorer households were still worse off.
Tobacco duty, says Forest, costs the poorest households 2.3 per cent of their disposable incomes compared to 0.3 per cent in the wealthiest households.
Simon Clark, director of Forest, said: “Tobacco duty is a regressive tax because it hurts low income households more than the average household and far more than the wealthiest households.
“In order to help those who, in Theresa May’s words, are ‘just about managing’, we urge the Chancellor to resist the temptation to increase tobacco duty for a second time this year."
Forest also claim the use of a “flawed” measure of inflation has cost smokers an additional £1.35 billion in tobacco duty since 2010.
According to the group, the practise of increasing tobacco duty using the retail price index (RPI) rather than the consumer price index (CPI), which experts believe is a more accurate measurement of inflation, has resulted in smokers being unfairly overtaxed.
The duty escalator, which was reintroduced in 2010, increased the price of tobacco every year by inflation plus two per cent. Inflation, says Forest, was calculated using the RPI not the CPI. This, says the group, has resulted in smokers paying even more duty than they should reasonably have been expected to pay.
Forest estimates that smokers were overtaxed by almost £46 million in 2010/11, rising to £252 million in 2016/17. The forecast for 2017/18 is almost £310 million which means smokers will have been overtaxed by over £1.35 billion since 2010.
Clark added: “Smokers have been punished enough for their habit. Tobacco duty is already scandalously high without the Chancellor using a flawed measure of inflation to extract even more money from the pockets of law-abiding consumers.”
Let's hope the PM and her Chancellor are listening.
Reader Comments (7)
I doubt they are. Smokers are cash cows to be both exploited and excluded by govt which never listens to anything we say.
I know that if I lived in the UK, I'd have made damn sure that I had a contact for black market tobacco. I would have refused to be robbed to the extent that smokers are in UK. It's quite scandalous.
And just so mean spirited. There are a lot of pensioners who fall into the 'poor' bracket, and to try to tax them out of one of their few pleasures in life smacks of sheer spite.
But then 'spite' is something that anti-smokers are very good at. And they are the ones whispering in Hammond's ear.
"Yes, do it, do it. Think of all that lovely money" they are saying. "And think how many thousands of lives you will be saving".
And of course, Hammond will cave in to them, just like they all do, and put the tax up.
The black market is already rubbing its hands with glee. When will the politicians, living as they do in the Westminster bubble, realise that they are simply lining the pockets of criminals every time the tax on tobacco is increased; it beggars belief.
Nisakiman you forget to mention how he will also be urged by those charlatans to " think of the children" even though children don't smoke and smoking is old fashioned. It is spite pure and simple and part of the hate campaign the antis are promoting against older people who refuse to quit.
Excessive tobacco taxes achieve two things: 1) the persecution of smokers; 2) enhanced profits and reach for organized crime...
Reject this regressive taxation. It's time to stop persecuting smokers.
The Office for Budget Responsibilty (OBR) forecast for the next 5 years sees tobacco duty raise £8.7bn now rising to £9bn in two years time and repeating. (This is £4bn more than Vehicle Excise Duty raises.) The increase doesn't suggest an increase in smokers, but an increase in duty because many more smokers will be buying via the black market with not so many stopping. Surely any reasonable government who needs tax and duty receipts to sustain itself would take note of how this draconian attitude is self destroying.
Smokers are voters too.
This will do wonders for the smuggling trade won't it? They never think of reducing the duty and making the difference from increased volume of sales do they? Heavens forfend!