Background Note
4.Smoking kills half of all long-term users and is the biggest single cause of inequalities in death rates between rich and poor in the UK. Successive Governments have followed a policy of using tax to maintain the high price of tobacco and help reduce smoking, especially among the young.
5.Research has consistently shown that the price of cigarettes affects demand.
6.This section increases excise duty on all tobacco products by 1 per cent in real terms, thereby helping to provide a further deterrent to smoking, as well as maintaining a contribution to government revenues.
7.The duty increase, together with consequential VAT, will increase the price of a typical packet of 20 cigarettes by 15p, a pack of 5 small cigars by 6p, a 25 gram pack of hand-rolling tobacco by 15p and a 25 gram pack of pipe tobacco by 9p.
8.The estimated revenue yield from these changes is £35 million.