Action on Smoking and Health (ASH) is pleased to see the tax escalator on cigarettes will continue at 2% above inflation (RPI) for the duration of this Parliament. For this year that will mean a 27 pence increase on a pack of 20 cigarettes.
In addition to the tax escalator for all tobacco products there will be a one-off 4% increase for hand rolled tobacco, meaning handrolled tobacco will increase by 6% above RPI. The increase will mean an extra 67 pence on a 30g pouch of tobacco. This is welcome but future budgets need to commit to extending this for the duration of this Parliament.
ASH also welcomes the uprating of minimum excise tax (MET) on cigarettes. The new MET will be £6.10 (previously £5.88) for a pack of 20. [1] [2] Increasing the MET raises the price of the cheapest cigarettes and discourages smokers switching to cheaper brands instead of quitting smoking altogether. This effectively means the lowest price for a pack of 20 cigarettes will be £8.23 from 6pm today.
However, ASH is disappointed that the Chancellor has not increased the annual tobacco tax escalator from 2% to 5% above RPI for factory made and 15% above RPI for handrolled tobacco, as recommended by ASH and the UK Centre for Tobacco and Alcohol Studies in its submission to the Chancellor. Reducing the affordability of tobacco is recognised to be the most effective way of reducing smoking prevalence and the higher the escalator above inflation, the greater the impact it has and the greater the potential to save lives.
Deborah Arnott, Chief Executive of ASH, said: ‘Despite successive years of tax increases, the past failure to close the gap in tax on handrolled tobacco has kept smokers smoking who might otherwise quit. Thousands of smokers have switched to cheaper hand rolled tobacco in recent years. We welcome the Government’s efforts to address this, but it must go beyond a single year.’
ASH is pleased to see the announcement of additional resource for trading standards and HMRC to combat illicit tobacco trade, alongside a commitment to consult on stricter penalties for trading in illicit tobacco. Stronger enforcement measures will ensure these tax rises have most impact. However, with the UK leaving the EU it is time the Government refreshes its illicit tobacco strategy in line with the requirements of the Illicit Trade Protocol which the UK is a Party to.
ASH is also disappointed that the Government has not taken this opportunity to impose a ‘polluter pays’ charge on tobacco companies. This would raise the resource needed to deliver on the Government’s ambition of a smoke-free England by 2030.
The Government said it would consider proposals for a ‘polluter pays’ charge on the industry overseen by the Department of Health and Social Care (DHSC) in a green paper published eight months ago to help deliver the ambition of a Smokefree 2030, and the Budget would have been an ideal opportunity to announce the next steps.
Ms Arnott added: ‘Reducing the affordability of tobacco is a vital measure to tackle smoking but it must be part of a comprehensive strategy to help smokers quit. Tobacco companies are highly profitable, profits made from addicted smokers unable to quit smoking. If the tobacco industry is to continue to be allowed to sell its deadly products it should also be made to pay to help deliver the ambition of a Smokefree 2030.’
ASH and other public health organisations have been calling for a Smokefree 2030 Fund which would collect a fee from the major tobacco manufactures in England. Tobacco transnational Philip Morris International (PMI) recently campaigned for their own version of such a fund showing that the highly profitable industry could afford it. However, PMI’s proposal included giving the tobacco industry influence on how the money would be spent and its products would be regulated.
The Government is to be congratulated for rejecting any such partnership with the industry but should instead put in place a statutory system to require the tobacco industry to fund tobacco control, completely independent from the industry in line with our legal obligations.
