Tobacco in the Budget Reply

Along with around 80 other health organisations in the Smoke Free Action Coalition , we called for a substantial rise in tobacco duty in the Budget.

A hike in price can provide the incentive that many smokers need to get them on the path of quitting their deadly habit. With increased costs particularly targeting the young, a tax rise can also help deter children from starting a life-long addiction.

But our demand for a rise of 5% above inflation was not to be.

Chancellor George Osborne announced he was sticking with a planned 2% hike, although he did make one welcome change relating to duty. The 2% annual increase was due to expire next year, but it is now scheduled to continue throughout the next parliament, until 2020, in a bid to improve public health.

That’s good news. But campaigners are still concerned that the small price increase will not be enough to stop smokers switching to hand-rolled tobacco or cheaper brands of cigarettes.

And it may not meet the UK Government’s own ambition to ensure the price of tobacco is sufficiently high to reduce smoking rates. Westminster has missed a chance to give smokers a strong incentive to stop smoking.

Looking behind the headlines to the detail of the Chancellor’s speech, we find a couple of initiatives related to tobacco in the Budget paperwork.

During the summer, the UK Government will consult on whether a minimum excise tax (MET) for tobacco could help improve public health.

That’s a move we’d support and we’d urge the Government to introduce the highest possible MET to reduce the tax differential between premium tobacco product and the cheapest. We need to maximize taxation on lower-than-average-priced cigarettes and set an effective floor below which the total tax burden can’t fall.

Westminster is also going to look at tobacco smuggling and revenue protection. Their plan is to consult in coming months on a range of measures to strengthen their response to illicit tobacco, with a view to new legislation in the 2015 Finance Bill.

We’re all in favour of this move, particularly as the tobacco industry has been peddling scare stories about current levels of illicit product and claiming the introduction of plain, standardised packaging will make things worse.

We’d be delighted to see a debate around illicit and any credible evidence that Big Tobacco has to back its claims that counterfeiters will find plain packs easier to copy.

The most recent evidence from Australia, where standardised packs are already used, found only a negligible impact on illicit. Just four per cent of illegal product recovered by Australian Customs was in counterfeit plain packs.


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