During 2017, tobacco tax has already risen on three separate occasions and with the Autumn Budget coming up on the 22nd November, excise duty could be hiked again which could potentially take the average price of premium cigarettes in the UK to more than £10 for a packet of 20.
The UK government has certainly been busy trying to reduce smoking rates: the tobacco control plan, published in July; considerable legislation, implemented in May and the increasing endorsement of e-cigarettes. It is safe to say that the hard work is paying off as smoking prevalence has declined rapidly in the UK over the past 5 years and recent data shows that the UK currently has the second lowest smoking rates in Europe.
Are these tax hikes necessary?
Of course tax hikes do help to reduce smoking rates but a fourth increase in less than a year could be seen by many as a little excessive. While this extra tax will both deter smokers from buying cigarettes and provide NHS funding to help treat smoking related illnesses, these high prices could lead to an increase in black market sales of tobacco.
The average price of a 20 pack of premium cigarettes in the UK currently stands at £9.91. This is the highest in Europe, followed by Ireland at £9.15. After Ireland, France is next with a 20 pack costing considerably less at £5.67 while in Bulgaria, the average cost is just £2.32. It is therefore no wonder that people buy cigarettes abroad and sell them on for a fraction of the UK price and still manage to make a tidy profit.
Tobacco companies are worried about the potential tax increase and the Tobacco Manufacturers association has said:
“We are calling on the Government not to raise excise duties again at the Budget on 22 November.
“A second increase will not deliver additional revenues, but simply drive the illegal market.”
Will Hill, a spokesperson for British American Tobacco, UK said:
“While we understand the Government wants to address the public health impact of tobacco, we believe focusing on more pragmatic approaches such as increasing focus on promoting the use of e-cigarettes would have a greater impact than simply hiking up prices.”
If tax prices are hiked even further on Wednesday, Britain could be the most expensive place to smoke in the world. Do you think this tobacco tax increase should occur in the autumn budget or should more focus be put on tobacco harm reduction and in particular e-cigarettes?