ASH welcomes cigarette tax hike

Wednesday 02 July 1997
ASH/ Press releases/
ASH Budget News Release – 2nd July 1997

ASH Welcomes Cigarette Tax Hike

Chancellor Gordon Brown has signalled that tax will be a central plank of the Government’s tobacco control strategy. A rise in tax of 19 pence on a packet of 20 will encourage people to cut down, quit or never start smoking. We estimate this increase will lead to a reduction in smoking of 2.2 billion cigarettes per year. In the long run this reduction in consumption is likely to save 3,500 lives per year. Despite reduced consumption, the tax take will continue to increase. For 1995/6 tobacco VAT and excise duty was £9,001 million [1]. ASH estimates that the tobacco tax increase will add £690 million to Treasury revenues.

“The higher taxes on cigarettes will save 3,500 lives per year and reduce sickness due to smoking – we warmly welcome the increases.” said Clive Bates, Director of ASH – Action on Smoking and Health.

Tobacco tax more than pays for NHS health costs associated with smoking. However, tobacco tax is not there only to recover the costs of smoking. It has always been better to raise tax from harmful and unproductive activities like smoking, rather than from the wages from work or profits from investment.

“High tobacco taxes are good for health and good for the economy” said Bates, “and, as far as cigarettes are concerned, the budget is good politics”.

The last tax rise was in the November 1996 budget. On July 14th the Government will hold an expert seminar on tobacco control policy and this will lead to a White Paper in the Autumn. One session at this meeting will deal with taxation policy.

“ASH hopes that year-on-year price rises above the rate of inflation will be adopted as a central plank of the Government’s new tobacco policy.” said Bates.

Note [1]: Dawn Primarolo Parliamentary Answer to Kevin Barron MP, 1st July 1997.


For more information contact:

Clive Bates, Director (020) 7739 5902
Amanda Sandford, Communications Director (020) 7739 5902