Minimum Excise Tax on tobacco will provide a significant boost to health
ASH has welcomed the Government’s commitment to publish draft legislation on a Minimum Excise Tax (MET) on cigarettes and to require the licensing of tobacco manufacturing equipment. The licensing plans were announced in today’s Autumn Statement while the commitment to draft legislation on the MET was made in response to a parliamentary question. 
ASH and the UK Centre for Tobacco and Alcohol Studies (UKCTAS) had also called for the licensing of retailers to support better enforcement of the age of sale law and to help reduce the illicit sale of tobacco.  The commitment to require the licensing of tobacco manufacturing equipment is a step in the right direction. This will ensure that relevant machinery does not enter the illicit production market, particularly in the form of second hand or reconditioned equipment, and will help the UK meet its requirements under the Illicit Trade Protocol and Framework Convention on Tobacco Control.
The MET will provide a significant boost to health by encouraging smokers to quit smoking instead of switching to cheaper brands. The Minimum Excise Tax will set an effective floor on the tax on cigarettes thereby raising the price of the cheapest cigarettes and reducing the price difference between the highest and lowest priced brands. This in turn should discourage ‘down-trading’, i.e. smokers switching to cheaper brands instead of quitting smoking.
Contrary to reports by the tobacco industry,  there is no evidence to support the contention that the measure will lead to an increase in the illicit trade. Since 2000 tobacco taxes have risen year on year while the illicit share of the cigarette market has halved due to the Government’s effective anti-smuggling strategy. 
The policy to narrow the tax differential between tobacco products was one of the key recommendations of ASH and the UK Centre for Tobacco and Alcohol Studies (UKCTAS).  However, the health groups would have preferred a Minimum Consumption Tax which would include VAT and would therefore apply to hand-rolled as well as manufactured cigarettes.
ASH research shows there is public support for tobacco tax increases but the public want to see the money raised to reduce smoking. In 2015, 63% of adults said they would support putting an additional 25p on a packet of cigarettes if the money was used to help smokers quit and discourage young people from starting to smoke. 
Deborah Arnott, chief executive of ASH said:
“We are pleased the Chancellor has heeded the calls of the health community to further raise tobacco taxes on the cheapest cigarettes, to reduce the incentive for smokers to downtrade to cheaper products.”
The Finance Bill 2017 will be published on 5th December 2016.
 PQ Minimum Excise Tax HC Deb, 21 November 2016, cW
 HMT Autumn Statement 2016.
 See for example:
Tackling Illicit Tobacco: From Leaf to Light HMRC & Border Force, 2015
 ASH/YouGov Smokefree GB survey, 2015. Total sample size was 12055 adults. Fieldwork was undertaken between 26th February to 12th March 2015 . The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).]