Cigarettes may see biggest price rise ever next month

The price of a 20 pack of cigarettes may rise by £1.15 next month as Chancellor Jeremy Hunt is expected to raise tobacco duty, stated a recent report.

Cigarettes levies is expected to go up by 12.7 per cent in line with the Retail Price Index (RPI), plus an extra minimum two per cent on top which is applied to tobacco products, The Sun stated in a report. If this is to go ahead in the Spring Budget, the price of a pack would jump by more than 15 per cent.

The price of a 30g pack of hand-rolling tobacco could go up by £2, which in turn will be the biggest increase in the price of cigarettes in the UK.

Currently, the duty paid on cigarettes is 16.5 per cent of the retail price plus an extra £5.26 on a packet of 20.

Cigarette prices remained untouched in 2022 by then-Chancellor Rishi Sunak. It implies that cigarette prices were increased last in October 2021 when 88p was added to the most expensive pack increasing it from £12.73 to just over £13.60.

Currently, the UK is working toward making the country “smoke-free” by 2030 which would mean that less than five per cent of UK adults would have the habit.

The Action on Smoking and Health (ASH) group has come forward to oppose an increase in this level stating that the “primary purpose” of increasing tax above inflation is to reduce the affordability of tobacco products.

However, the group noted that RPI is “not a good measure of affordability” at the current time when wages are not keeping pace with inflation.

In a statement, ASH said: “A better measure of affordability is average earnings, as is used in Australia and we recommend that the UK switch from using RPI to average weekly earnings increase as the foundation for the tobacco tax escalator.

“The Office for Budget Responsibility (OBR) estimates that average weekly earnings will have grown by 5.4 per cent in the fiscal year 2022-3, and are expected to grow by 4.2 per cent in 2023, while the figures for RPI are 13.0 per cent and 8.3 per cent.”