Health groups call for tobacco tax escalator to rise to 5% in Budget



Wednesday 13 March 2013

A submission to the Treasury in advance of the Budget by ASH and the UK Centre for Tobacco Control Studies (UKCTCS), endorsed by 87 health organisations, urges the Chancellor to maintain the 5% above inflation tax increase introduced last year and to continue raising the tax at that level between now and 2015. [1] At the same time, the health groups are calling on the Government to implement other measures to reduce smoking such as the introduction of plain, standard tobacco packaging.

Raising the tobacco tax escalator from 2% to 5% above inflation would reduce smoking while at the same time raise much needed revenue.

In addition to the 5% tax rise, ASH and the UKCTCS are urging the Government to implement measures to reduce the risk of smokers downtrading to cheaper brands rather than quitting. [2]

Anna Gilmore, Professor of Public Health at the University of Bath commented:

“Tobacco companies constantly complain about tax rises while at the same time quietly increasing prices and amassing huge profits from the sale of a product that kills half their long-term customers. Setting up a regulatory agency to cap these profits could raise an extra £500 million a year and should be given serious consideration given the current economic climate.”
Deborah Arnott, Chief Executive of ASH said:

“Raising the price of cigarettes through taxation is an effective way of encouraging smokers who are thinking of quitting to make that step. High prices can also deter young people from smoking. Raising tobacco tax also increases Government revenue so it’s a win- win situation with benefits to both the economy and health.”

ENDS
Notes:
[1] The Budget submission to HM Treasury by ASH & UKCTCS has been endorsed by 87 UK health and welfare organisations. Available at: www.ash.org.uk/taxsubmissions

In 2011 the Government made a commitment to a 2% above inflation tax escalator on cigarettes but increased the tax by 5% in real terms in the 2012 budget for that year only.

[2] Measure to reduce down-trading include:
• Ensuring that the specific tax element for cigarettes is the maximum allowed under the revised EU tax directive.
• Setting a minimum excise tax for cigarettes to ensure that tax on all below average price cigarettes is set at the same level as that of average price cigarettes.
• Further reducing the differential between tax levels on handrolled tobacco and that on cigarettes by increasing the tax on HRT by an additional 10%.
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ASH is a health campaigning charity working to reduce the harm caused by tobacco. The UK Centre for Tobacco Control Studies is a network of nine universities in the UK working in the field of tobacco control involved in research, policy development, advocacy, teaching and training.
[3] For further details about standard tobacco packaging, see:
http://www.smokefreeaction.org.uk/plain-packaging.html and how packs are used as advertising tools:
http://www.smokefreeaction.org.uk/files/docs/Packsheet.pdf