Tobacco duties
In line with the escalator duty, rates on all tobacco products increased by two percent above (RPI) – and on hand rolling tobacco by six per cent above (RPI). All changes took effect on October 27. [1]
- The changes add 54p to the price of a pack of 20 cigarettes, £1.11 to a 30g pack of hand-rolling tobacco, 27p to a 10g pack of cigars, 36p to a 30g pack of pipe tobacco and 13p to tobacco for heating packs.
- The minimum excise tax (MET) on cigarettes and the price at which it applies has been uprated by an additional one per cent to three per cent above (RPI). The new MET will be £6.96 (previously £6.42) for a pack of 20 and will apply to cigarettes sold at or below £10.30 (previously £9.23)
The recent budget [1] was a small step forward on tobacco, but on its own won’t deliver on the government’s commitment to a smoke-free 2030.[2] As the treasury acknowledges, tobacco tax plays a dual role by reducing smoking rates and raising vital revenue for the government. [3] However, tobacco taxes are most effective when underpinned by a comprehensive and funded strategy to reduce smoking prevalence, funding for which has been cut significantly in recent years.
Recently published evidence of a surge of 25 per cent in smoking among young adults since the first lockdown puts this ambition firmly out of reach without tough new measures.[4] Further regulations, as recommended by the APPG on Smoking and Health, must also be considered such as raising the age of sale to 21 [5].
Deborah Arnott, chief executive of ASH, said, ”ASH is pleased to see tobacco taxes go up significantly above inflation. Raising tobacco prices through taxation reduces smoking prevalence, increases tax revenues, and reduces costs to public finances. But on their own tax increases are not enough to deliver the government’s smoke-free 2030 ambition; what’s also needed is a fully funded and ambitious strategy, including stricter and more support for smokers to quit. The Government promised to publish a new Tobacco Control Plan this year, but with only a couple of months to go we’re still waiting.”
See below for evidence of the vital role eliminating smoking will play in levelling up, by reducing pressure on our NHS and social care systems, increasing productivity and reducing inequalities.[6]
Pressure of smoking on health and social care budgets
- Government estimates are that smoking costs the NHS in England £2.6 bn a year in treatment of smoking-related diseases including cancers, cardiovascular and respiratory diseases.
- One in three smokers show signs of poor mental health, and quitting is linked to improvements in wellbeing at least as great as from anti-depressants.
- The cost of social care to local authorities in England due to smoking is estimated to be around £1.19 bn, with £625 million for domiciliary care and £565 million for residential care.
Lost productivity due to smoking
- Lost economic activity due to premature death from smoking in England has been estimated to cost £3bn a year.
- Smokers lose £14.1bn a year from both unemployment (£6.9bn) and reduced earnings (£7.2bn) linked to smoking.
Inequalities and smoking
- 740,000 additional working age adults and 183,000 pensioners live in poverty when the cost of smoking is taken into account.
- 330,000 children are growing up in poverty because their carers smoke.
- 60 per cent of the 500,000 households living in poverty because of the cost of smoking live in the North and Midlands, whilst only 20 per cent are in London and the South East.
- Over £14 billion a year is spent by smokers on tobacco, well over 90 per cent of which goes in taxes and tobacco manufacturers’ profits.
References
[1] Link to the budget documents
[2] Department of Health & Social Care. Advancing our health: prevention in the 2020s – consultation document. Published 22July 2019.
[3] Gov.uk. Policy paper: Consolidation of Rates into Finance Bill 2021 for Tobacco Duty [Internet]. HM Revenue & Customs; 2021 Mar 3 [cited 2021 Sep 30]. Available from: https://www.gov.uk/government/publications/consolidation-of-rates-into-finance-bill-2021-for-tobacco-duty/consolidation-of-rates-into-finance-bill-2021-for-tobacco-duty
[4] Jackson SE, Beard E, Angus C, Field M, Brown J. Moderators of changes in smoking, drinking and quitting behaviour associated with the first COVID-19 lockdown in England.August 2021.
[5] Delivering a Smokefree 2030: The All Party Parliamentary Group on Smoking and Health
recommendations for the Tobacco Control Plan 2021. London: APPG on Smoking and Health. 2021.