Public demand Chancellor puts up tobacco tax in Budget

Sunday 04 March 2007

ASH News release:  Embargo: 0.01 Sunday 4 March 2007  


Public demand Chancellor puts up tobacco tax in Budget

In a letter to the Treasury, endorsed by 21 health organisations across the United Kingdom [1], ASH urges the Chancellor to increase tobacco taxation by 19 pence a packet in advance of the introduction of smokefree legislation in England, Wales and Northern Ireland. There is public support for an increase of this amount in tobacco tax, even amongst smokers, if the price increases are used to help stop young people take up smoking and smokers quit. [2] Raising the price of tobacco is a well-established means of cutting consumption and combined with the smoking ban will further reduce smoking rates. [3]


Jean King, Director of Tobacco Control at Cancer Research UK, said:


“This is a one off opportunity to slash smoking rates. In Ireland they increased tobacco tax well above inflation just before smokefree legislation was introduced and smoking rates dropped 2.5% in the year after its introduction. It’s six years now since we’ve had an increase in tobacco taxes above inflation and as a result cigarettes are much more affordable now than they were in the 1960s. An above inflation increase would be popular with the public and a major step forward for public health.”


Health organisations also want more action to stop smuggling. Just this week Romania and Bulgaria – the two newest members of the European Union – have joined the European Community and other Member States in signing a landmark Agreement with Philip Morris International to curb tobacco smuggling in Europe.  This now leaves the UK as the only EU Member State not to have signed the Agreement. [4]


Deborah Arnott, Director of the health campaigning charity ASH, said:


“Although progress has been made to curb smuggling, more needs to be done. The Government has admitted in evidence to the National Audit Office that by not signing the Philip Morris Agreement it has lost hundreds of thousands of pounds each year it could have gained from Philip Morris each time its product was seized by Customs. There’s nothing to be lost in signing, why are we the only Member State left out in the cold?”




Notes and links:

[1] Budget 2007: Tobacco tax submission on behalf of ASH and 19 other UK health organisations

[2] West R (2006) Public support for a tobacco levy. There is widespread support in England for the idea of putting 20p on a packet of cigarettes with the funds being used exclusively to fund tobacco control; 78% of the adult population is in favour of the idea including 54% of those in Social Grade E (‘unemployed, on state benefit and lowest grade workers’) who had smoked in the past year and 52% of these who were smoking at the time of the survey.

[3] According to Government estimates around 700,000 people are expected to stop smoking as a result of the indoor smoking ban.  Studies show that a 10% rise in the price of cigarettes results in a 4% fall in consumption.

[4] The agreement between Philip Morris and the European Union arose out of litigation brought by the European Commission against the tobacco company for smuggling offences. In 2004, PMI announced that it would pay the EU a billion dollars in a deal which requires the company to make seizure payments if its cigarettes are smuggled into Europe. Originally 10 Member States signed up to the Agreement: in return legal action against PMI was dropped.  Now 26 countries have signed, leaving the UK as the only Member State not to have signed the Agreement.

[5] The Government’s proposals to tackle smuggling are contained in the report: New Responses to New Challenges: Reinforcing the Tackling Tobacco Smuggling Strategy.  HM Treasury and HM Revenue & Customs, March 2006.



Contact: Deborah Arnott  020 7739 5902 (w) 079 7693 5987 (m) ISDN available


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