Smokers face 50p rise for packet of cigarettes after duty change

George Osborne stuck to figures announced by his Labour predecessor Alistair Darling in March last year, but announced plans to change the “tobacco duty regime”, stopping companies producing cheaper cigarettes.

The Chancellor said: “It’s clear that the structure of the tobacco duty regime is being exploited to produce cheaper cigarettes so we will change the regime to narrow the differential between these lower-cost brands and the rest, and between cigarettes and hand-rolled tobacco. This will reduce smoking and improve our nation’s health.”

A tax analyst with the Tobacco Manufacturers Association (TMA), Paul Stockall, said the Chancellor’s “differential” changes applied to “proportional and specific excise rates” – equating to an approximate 50p rise on economy cigarettes and 33p on premium packs.

“In terms of a 25-gram pouch of hand-rolling tobacco, that will rise from 60p to about 67p, taking a pouch to about £7.35,” he said.

TMA chief executive Chris Ogden said: “The Irish government recognised that tax increases were driving the illicit trade in tobacco and therefore chose not to raise duties at consecutive Budgets. The Chancellor should be looking to follow their example.”

The smokers’ lobby group Forest criticised the two per cent increase and the Chancellor’s “social engineering” approach to smoking. Director Simon Clark said: “Law-abiding consumers who buy their tobacco in British shops are being penalised unfairly.

“The policy also discriminates against those who can least afford it, especially the elderly and the low paid.”

He added: “The Chancellor said the government’s policy on tobacco will reduce smoking.

“It’s not the Government’s role to force people to quit.

“That is social engineering, which we deplore.”

The chief executive of the Association of Convenience Stores, James Lowman, also hit out saying: “The rise in tobacco duty will drive consumers away from legitimate retailers into a dangerous illegal trade which costs the taxpayer billions every year and already accounts for 20 per cent of all tobacco consumed in the UK.”