Cross-party parliamentary group calls for higher tobacco tax
An increase in the tax on tobacco is needed to persuade more smokers to give up the habit, the All-Party Parliamentary Group on Smoking and Health has said.
At present, the tax rate is set at 2% above inflation each year, but the cross-party group of Peers and MPs is calling for that to be raised to 5%, which it believes would double the current rate of decline in smoking.
"Smokers don't just die early, they suffer many years of disease and disability before they do, putting pressure not just on the NHS, but additional disability and social care costs and reduced income tax," group chairman Bob Blackman, Conservative MP for Harrow East, said.
"Every pound invested over the next five years could deliver £11 to the public purse."
The group anticipates that an additional £100m would be generated each year from the increased tax, which it said could be spent on anti-smoking schemes.
However, tobacco manufacturers have criticised the idea as being "counterproductive".
The director general of the the Tobacco Manufacturers' Association, Giles Roca, said: "Every time taxation is increased on tobacco it loses the Treasury millions that could have been spent on public services."
He said this is because UK tobacco is the most expensive in Europe, with taxes increased by more than 40% during the past five years, which he said meant that smokers are "increasingly switching to cheaper and often illegal products, which loses the Treasury some £2.6bn each year".
"Rather than imposing yet more tax on a legitimate UK sector, which directly and indirectly supports over 60,000 jobs and generates over £12bn in tax revenue, the UK government would be better served by holding an independent review of tobacco tax policy," he said.