Budget response: Government commitment to annual tobacco tax rise welcomed though it falls short of optimum increase

Wednesday 19 March 2014

The extension of the 2% above inflation annual tobacco tax rise for the whole of the next parliament announced today in the Budget has been welcomed by ASH and other health organisations. [1] However it falls short of the 5% rise demanded by the health campaigners who are concerned that the small price increase will not be enough to stop smokers switching to hand-rolled tobacco or cheaper brands of cigarettes. In particular the health groups are disappointed that there has been no attempt to narrow the gap in price between manufactured cigarettes and hand-rolled tobacco [2]

Deborah Arnott, Chief Executive of ASH said:

“While we are pleased that the Chancellor has made a commitment to extend the annual 2% above inflation tax rise on tobacco he has missed an opportunity to give smokers a strong incentive to stop smoking. Although some people will cut down or quit, there is a real risk that many smokers will simply switch to cheaper brands or hand-rolled tobacco.”


[1] A submission (pdf) to the Treasury in advance of the Budget by ASH and the UK Centre for Tobacco Control Studies (UKCTCS), endorsed by 80 health organisations, had urged the Chancellor to increase the tobacco tax escalator to 5% above inflation in order to reduce smoking while at the same time raise much needed revenue.

[2] In the Tobacco Control Plan for England, the government pledged to “follow a policy of using tax to maintain the high price of tobacco products at levels that have an impact on smoking prevalence”. (p24)