The price of cigarettes is set to rise after Rachel Reeves confirmed a hike in Tobacco Duty in the Autumn Budget.
Tobacco duty is a tax charged to companies making or importing cigarettes in the UK. When this is raised, the cost is filtered down onto consumers, who then have to pay more for the products in shops. There are currently 6.6million people who have the habit in the UK.
Reeves says the government will renew the tobacco duty escalator at Retail Price Index (RPI) plus 2% for the remainder of parliament and will increase duty by 10% on hand-rolled tobacco from today at 6pm. As of September 2024, the average packet of 20 king side cigarettes in the UK stood at £15.85.
Vaping was also targeted in Labour's budget as figures from The Lancet Public Health journal found that a quarter of 11 to 15-year-olds in England have used e-cigarettes and one million people in England now vape despite never having been regular smokers. The Chancellor has also announced a “flat rate duty” on vaping liquid from October 2026 which will add £2.20 per 10ml of vaping liquid and will add a equivelent one-off increase in tobacco duty to maintain the incentive for smokers to give up smoking.
The amount of duty paid on cigarettes usually increases with inflation each year and the increase seen in the Budget today was expected by many in the industry. Both the former Tory and the Labour government both push that price rises will lead to less than 5% of the population being smokers by 2030, which will then class the UK as being "smoke free".
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However, some are not happy about the rise. Simon Clark, director of the smokers’ lobby group Forest, said increasing tax on tobacco above inflation would "drive even more smokers to the black market, fuelling illicit trade, and hurting legitimate retailers." He also noted that it discriminates against those from poorer backgrounds. He said: "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.”
Responding to the Chancellor’s plan on introducing a flat-rate duty on vaping liquid, he added: "If the government’s aim is to reduce the number of smokers, increasing the cost of the most successful smoking cessation aid is a really stupid thing to do. A better solution to the issue of children vaping is not to penalise adults who are trying to quit smoking but to prosecute and punish those who sell vapes to anyone under 18.”
Smokers witnessed two tax rises in 2023, which took the average price of a packet of 20 cigarettes up to £15.67. In their final spring statement, the former Tory government announced a one-off rise to Tobacco Duty in the Spring Budget; however, this was set to be introduced in October 2026. This was to coincide with a new tax on vaping. The goal of this was to always make smoking the "most expensive" option.
The price of cigarettes has skyrocketed over the last decade. According to Office of Budget Responsibility (OBR) a packet of 20 king-size filter cigarettes cost an average of £8.06. That’s an 86% increase in a decade and would cost the average smoker an extra £1,310 a year.
Taxing tobacco has always been a big revenue raiser for the UK Government. However, it is estimated that duties from tobacco will fall over the coming years. The OBR say takings could drop from £ 9.4billion last year to £8.4bn between 2026 and 2027.