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Smokers frantically stocked up yesterday in a rush to buy cigarettes before 6pm last night, when the Chancellor’s plans to increase the duty on tobacco products above the rate of inflation caused the prices to rise considerably.
The cost of an average packet of 20 cigarettes will increase by 37p, as the new budget doubles the combined tax hit of the last two budgets. In the coming days, this measure is set to be followed by the controversial plan to create minimum prices for alcohol.
The Chancellor of the Exchequer, George Osborne, has justified this ‘sin tax’ rise by suggesting that it will reduce the number of smokers, which will limit the vast amount of premature deaths and diseases which are linked to smoking.
Health campaigners and charities such as Action on Smoking and Health (Ash) are delighted by the news, as they believe that increasing the price of cigarettes is the only way to dissuade young people from starting to smoke at a young age.
Opposition to this measure is also widespread, with many smokers taking to Twitter to vent their anger. The hashtag #fags was trending all over the UK yesterday with many people surprised by the ‘Big Government’-style measure implemented by a Conservative Chancellor, whose party campaigned partly on the basis of reducing the state’s intrusion into private life and increasing personal responsibility.
Another health-driven taxation idea was reported last year when David Cameron backed the idea of a ‘fat tax’, which would increase the cost of food high in saturated fat. This measure was largely opposed by the public because of its ‘nanny state’ principles, in direct contradiction of the government’s ‘nudge’ theory, which should inform and educate people into making healthier choices, rather than legislating them into it.
The tax revenues from tobacco before yesterday’s increase added £11bn to the treasury’s coffers every year – about a third of the cost of running UK hospitals – and the figure will be increased by approximately £70m after the first year of the tax hike. This astronomical sum has yet to have found its purpose, but will hopefully be put to good use, by subsidizing fresh food or increasing the public’s awareness of healthy lifestyle choices.
The cost of cigarettes in the UK was already twice the price of Spain’s and quadruple that of Poland’s and tobacco manufacturers warn that the new tax levels will only serve to increase the counterfeit and smuggling of illegal cigarettes into the country, which is becoming a serious issue as the illicit trade in rolling tobacco accounts for about half the UK market and costs the HMRC £880m pounds a year.