Price of packet of cigarettes to rise to £16.78 from 6pm TONIGHT as Rachel Reeves hikes tobacco tax in Budget
THE price of a pack of cigarettes will have risen by 90p after a hike was confirmed in the government’s Autumn Statement.
On Wednesday in the House of Common, Chancellor Rachel Reeves revealed a range of plans relating to tax rises, benefits and pension payments.
The “trick and treat” Halloween package included:
- A freeze to fuel duty for a 15th consecutive year in a win for The Sun’s Keep It Down campaign
- A penny off a pint by cutting draught beer duty, but raising booze taxes on other drinks
- A gloomy forecast of sluggish growth in a blow to Labour’s flagship mission
- A stamp duty rise for second-home buyers of two percentage points
- A pay rise for millions as the minimum wage was increased by £1,400 a year
- A hike to a packet of cigarettes as smoking duties were raised
- A new tax on vapes ahead of the looming ban on disposable e-cigs
- Higher taxes on air passenger duty for private jets that hits the wealthy
- A benefits crackdown with Ms Reeves telling jobless Brits to “get back to work”
- An increase to the state pension of £473 next year through the triple lock
- An inheritance tax raid through freezing the rates people pay
- An increase to the Carer’s Allowance to give cash to 60,000 more carers
The Chancellor said that tobacco duty would increase by the standard Retail Price Index (RPI) – a measure of inflation – plus 2%.
The government used the RPI rate of 3.65%, which is the Office for Budget Responsibility’s forecast for the inflation rate in quarter two of 2025.
It means the cost of a 20 pack will rise by 5.65% – or 90p – at 6pm this evening.
The average price of a 20-pack of cigarettes in September was £15.88, according to the ONS – and it will rise to £16.78 tonight.
The rate of hand-rolling tobacco has also increased by the same RPI rate plus a whopping 12% – 15.65%.
Tobacco duty rates automatically rise each year, but the 15.65% figure is a massive blow to smokers who roll their own cigs.
Campaigners have slammed Ms Reeves’ move, claiming it is “punishing the lower paid”.
Simon Clark, director of the smokers’ lobby group Forest, said: “Increasing the tax on tobacco above inflation will drive even more smokers to the black market, fuelling illicit trade, and hurting legitimate retailers.
“It discriminates against consumers from poorer backgrounds for whom smoking may be one of the few pleasures available to them.
“Instead of punishing the low paid, the government should focus on improving the environmental conditions that drive many people to smoke in the first place.”
Tobacco duty is a tax charged to companies making or importing cigarettes in the UK.
When the tax is raised, the cost is passed on to consumers who have to pay more for tobacco products in the shops.
The price of cigarettes usually increases with inflation each year unless the Chancellor intervenes to freeze the rates.
The previous increase was revealed earlier this year in March, which saw the price of a pack of cigs increase to average of £16.
The former Chancellor Jeremy Hunt introduced a one-off increase of £2 per 100 cigarettes or 50 grams of tobacco.
Previous to this, prices rose in November last year by 7.4% – or £1.08.
This took the price of an average pack of 20 cigarettes to £15.67 from £14.59.
The RPI is a measure of inflation that’s published monthly and is used to measure the change in the cost of retail goods and services.
Taxing tobacco is a huge revenue-raiser for the government, with £10.7billion collected in 2022, which was 1.2% of the total tax taken.
That’s because cigarette levies went by 5.4% in line with the Retail Price Index (RPI), plus an extra minimum of 2% on top which is applied to pre-rolled tobacco products.
The RPI is a measure of inflation that’s published monthly and is used to measure the change in the cost of retail goods and services.
Meanwhile, hand-rolling tobacco went up by 10.1% plus an added 6%.
Rolling tobacco does tend to go up at a faster rate than pre-made cigarettes.
Before that, cigarette prices were increased in the 2021 Budget.
At the time, 88p was added to the most expensive pack – which saw its price go up from £12.73 to just over £13.60.
In 2020, the Chancellor announced an above-inflation tax increase on fags of 2%.
Rishi Sunak intervened and froze rates in his Spring 2022 Budget, when he was Chancellor in Boris Johnson’s cabinet.
Taxing tobacco is a huge revenue-raiser for the government, with £10.7billion collected in 2022, which was 1.2% of the total tax taken.
The Chancellor also revealed that vapes will be banned across the UK within eight months.
The Autumn Statement provides an update on the government’s plans for the economy.
These are issued twice a year, once at the Budget in the spring and once at the Autumn Statement.
WATCH RACHEL REEVES ON NEVER MIND THE BALLOTS
By Ryan Sabey, Deputy Political Editor
RACHEL Reeves will be grilled in a special Budget edition of The Sun’s Never Mind The Ballots show today.
Our Political Editor Harry Cole will put the Chancellor on the spot shortly after she’s finished delivering her crucial address in the House of Commons.
It will be available to watch on thesun.co.uk, YouTube and Sun social channels at 5.30pm.
Topics will include her decision on whether to spare motorists a fuel duty rise, and the expected eye-watering tax rises she will impose.
Since its launch earlier this year, NMTB has cemented its place at the heart of British politics.
During the General Election campaign The Sun was the only print publisher to host back-to-back grillings of Rishi Sunak and Sir Keir Starmer.
Footage from The Election Showdown has been viewed over 15 million times.
NMTB has also featured interviews with ex-PMs Boris Johnson and Liz Truss, as well as senior politicians Nigel Farage, James Cleverly, Wes Streeting, Steve Reed and Bridget Phillipson
Do you have a money problem that needs sorting? Get in touch by emailing money-sm@news.co.uk.
Plus, you can join our Sun Money Chats and Tips Facebook group to share your tips and stories