Packets of cigarettes are set for ‘biggest price rise ever’ next month

Packets of cigarettes will see the ‘biggest price rise ever’ next month, with costs expected to increase by 12.7%.

The move comes after Chancellor of the Exchequer Jeremy Hunt said he wants to raise tobacco duty in line with inflation in next month’s budget on March 15th. Due to inflation being at its highest rate in years, many smokers had hoped the Chancellor would put a hold on the hike.

If you were planning on giving up this expensive vice, whether that be to improve your health or your purse, now might just be the right time. For those who wish to be free to choose to continue with their habit, it looks like you will be paying out more.

Smokers will see a packet of 20 go up by £1.15, meaning they will have a tobacco tax of at least 2% and levies of 12.7 %. As reported by the MailOnline, cigarettes make 1.2% of all tax revenue, which equates to almost £11 million in taxes.

The government is trying to discourage new people taking up the habit and ultimately hoping that the number of smokers in the UK will continue to fall to less than 5% of the population by the end of the decade.

The news might not come as a surprise to many because they are such a big money maker for the government through taxation, and they usually go up to meet inflation. 

As reported in The Mirror, The Action on Smoking and Health (ASH) group has come forward to oppose the level of increase, stating that the ‘primary purpose’ of increasing tax above inflation is to reduce the affordability of tobacco products. The group pointed out that RPI is ‘not a good measure of affordability’ at the current time when peoples’ wages are not inline with inflation.

In a statement, ASH said: “A better measure of affordability is average earnings, as is used in Australia and we recommend that the UK switch from using RPI to average weekly earnings increase as the foundation for the tobacco tax escalator.

“The Office for Budget Responsibility (OBR) estimates that average weekly earnings will have grown by 5.4% in the fiscal year 2022-3, and are expected to grow by 4.2% in 2023, while the figures for RPI are 13.0% and 8.3%.”

In the Spring Statement last year, then-Chancellor Rishi Sunak announced that cigarette prices were not going to rise as part of his budget. This meant that the last time cigarette prices were increased was in October 2021 when 88p was added to the most expensive pack increasing it from £12.73 to just over £13.60.

Over the last couple of decades, the government has actively worked to prevent more smokers with the introduction of several new laws, such as smoking no longer being allowed in ‘enclosed’ or ‘substantially enclosed’ public places and workplaces, and health warnings having to be displayed on packets.

Currently, the UK is working toward making the country ‘smoke-free’ by 2030 which would mean that less than 5% of UK adults would partake in the habit.

The Spring Budget is set for March 15th 2023 and currently, it is expected that the Chancellor has planned a ‘slimmed down’ budget with no immediate tax cuts.