Rise in tobacco tax & Minimum Excise Tax – a significant boost to health

16 March 2016. ASH has warmly welcomed the increases in tobacco tax announced in today’s Budget. The 2% above inflation rise on duty on manufactured cigarettes previously committed to, and the 5% above inflation rise on hand-rolled tobacco will provide a significant boost in the campaign to reduce smoking.  These changes add 21p to a pack of 20 cigarettes and 44p to a 30g pack of HRT.

The additional 3% rise in excise duty on hand-rolled tobacco will help close the price gap between manufactured cigarettes and hand-rolled. This is significant as there has been a rise in the number of smokers switching to hand-rolled tobacco in recent years. [1]

The policy to narrow the price differential between different tobacco products and in particular between manufactured cigarettes and hand-rolled tobacco is one of the key recommendations of ASH and the UK Centre for Tobacco and Alcohol Studies. [2]

ASH also welcomed the Chancellor’s commitment to introduce a minimum excise tax which will help set an effective floor on the price of cigarettes and discourage ‘down-trading’, i.e. smokers switching to cheaper brands instead of quitting smoking. [3]

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. [4]
Deborah Arnott, chief executive of ASH said:

“This is excellent news and we’re delighted the Chancellor has heeded the calls of the health community to further raise tobacco taxes, to reduce the incentive for smokers to downtrade to cheaper products. The new tax structure will increase the effectiveness of taxation and encourage more people to quit. It will also help close the gap in health inequalities.”




Budget 2016

[1] Since 1990 there has been a steady increase in the number of smokers using mainly hand-rolled tobacco. In 1990, 18% of male smokers and 2% of female smokers said they smoked mainly hand-rolled cigarettes but by 2011 this had risen to 40% and 26% respectively. The 2014 Opinions & Lifestyle survey revealed that 39% of male and 28% of female smokers said they smoked hand-rolled cigarettes.

[2] A submission to the Treasury in advance of the Budget by ASH and the UK Centre for Tobacco Control Studies (UKCTCS), had recommended the introduction of a tobacco levy; a minimum consumption tax; and for corporation tax on tobacco manufacturers to be set at 28%, amongst other policies.

[3] The Government launched a public consultation on a minimum excise tax for tobacco in October 2014.  See the ASH and UKCTAS response to consultation on a Minimum Excise Tax

[4] 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+).]