Budget 2024: Smokers to Face Tax Hike as Price of Cigarettes Set to Rise Again
Smokers in Scotland are bracing themselves for a tax hike as Chancellor Rachel Reeves confirmed that the price of cigarettes will increase in the upcoming Budget. Reeves announced the rise in Tobacco Duty to Members of Parliament, outlining the UK Government’s tax and spending plans. This move is expected to impact around 680,000 Scottish smokers and comes amidst plans by both Labour and the SNP to create a “smoke-free” generation.
Tobacco Duty, a tax imposed on companies manufacturing or importing cigarettes in the UK, ultimately influences prices for consumers in stores. Reeves revealed that the government will implement a 2% increase in the tax on cigarettes, along with inflation, for the remainder of the parliament. Additionally, there will be a 10% hike in duty on hand-rolled tobacco starting from 6 pm today. As of September 2024, the average cost of a pack of 20 king-size cigarettes in the UK was £15.85.
In a bid to discourage smoking further, the Chancellor also introduced a “flat rate duty” on vaping liquid effective from October 2026, which will add £2.20 per 10ml of e-liquid. Moreover, there will be a one-off additional increase in tobacco duty at the same time to encourage smokers to transition away from cigarettes. Typically, duty on cigarettes increases at least in line with inflation annually. The aim is to reduce the smoking population to less than 5% by 2030, thereby achieving a “smoke-free” status for the UK.
The Scottish Government shares the goal of creating a “tobacco-free generation,” with future plans to potentially prohibit individuals born after 2009 from purchasing tobacco or cigarettes. Nationally, smokers experienced two tax hikes in 2023, leading to an average price of £15.67 for a pack of 20 cigarettes. Over the past decade, cigarette prices have surged due to duty increases, rising by 86% since 2014 when a pack cost £8.06. This escalation has resulted in an additional annual cost of £1310 for the average smoker.
The intention behind these policies is to reduce the number of smokers, especially in Scotland where smoking-related issues still cause nearly 9000 deaths and 90,000 hospital admissions annually, adding strain to the healthcare system. Simon Clark from the smokers’ advocacy group, Forest, expressed concerns that hiking tobacco tax above inflation could encourage more individuals to turn to the black market for cigarettes, adversely affecting legal retailers. He argued that such measures disproportionately impact those from lower-income backgrounds, emphasising the need to address the underlying reasons that drive people to smoke.
Insights and Summary:
The announcement of a tax hike on cigarettes in the Budget of 2024 is set to have a significant impact on smokers in Scotland, adding to the ongoing efforts to reduce smoking rates and create a healthier, smoke-free environment. The increase in Tobacco Duty reflects the government’s commitment to tackling smoking-related health issues and driving positive behavioural change. However, concerns have been raised regarding the potential consequences of such tax hikes, particularly in terms of exacerbating health inequalities and encouraging illicit trade in tobacco products. The implementation of additional measures targeting vaping and long-term plans for a tobacco-free generation signal a comprehensive approach to public health and tobacco control strategies. As these changes take effect, it will be crucial to monitor their impact on smoking prevalence, public health outcomes, and societal attitudes towards smoking.