Up even more

Smokers Hit by Budget Tax Hikes

The cost of a packet of 20 cigarettes is set to rise by 19 pence, with levies on tobacco going up as from December 1.

The increase, announced by the Chancellor in his budget, was hailed as "courageous" by health campaigners. But it was immediately condemned by the pro-cigarette lobby.

ASH, the Action on Smoking and Health, said they estimated the price increase would lead to a reduction in smoking of 2.2 billion cigarettes a year and net the Treasury an extra £690 million.

"The higher taxes on cigarettes will save 3,500 lives per year and reduce sickness due to smoking. We warmly welcome the increase," said ASH director, Clive Bates.

But the Fair Cigarette Tax Campaign said the hike meant tax on cigarettes was now 80% on a typical pack of £2.63. "This will simply add to the misery of pensioners and smokers on lower incomes who are least able to afford it," said a spokesman Eddie Cassidy.

The Tobacco Alliance, representing 26,000 independent cigarette retailers said the hike was "like winning Wimbledon" for smugglers, inviting contraband which would damage their lawful trade.

Cost of a pint up

As for drinkers, Gordon Brown announced that duties on alcohol would rise but by the rate of inflation only.

This will add 19p to a bottle of spirits, 1p to a pint of beer, 4p to a bottle of table wine and 1p to higher strength alcohol, including alcopops, from January next year.

But Mr Brown added that he would be conducting a thorough review of levels of all tobacco and alcohol duties.

The drinks industry said the review of duties in the sector was well overdue, but questioned why the Chancellor had pre-empted its findings by deciding to raise duties next year anyway.

Industry insiders had been braced for a much higher duty on the flavoured alcohol drinks which have sparked concerns that they are being targeted at under-age drinkers.