A policy think tank has called for tax on cigarettes to be dramatically raised, bringing the price of a pack of 20 to over £7.
Policy Exchange have published a report saying that the cost to the public of smoking is so great that its far outweighs the tax gains that come from cigarette sales. They estimate that every cigarette smoked costs the taxpayer 6.5 pence.
With the budget being released next week, the group believe that there should be a 5% in cigarette tax included, with additional rises over the next 5 years to ensure that smoking stays ‘revenue neutral’.
The report, written by head of the policy and social care unit Henry Featherstone, concluded that annually smoking costs £13.74 billion, a figure including not only NHS care for smoking related diseases but £2.9m for productivity lost during smoking breaks, £342 million spent on clearing butts, and £507 million dealing with smoking-related fires.
They said that as smoking only brings in £10billion a year, the treasury needs to make up the shortfall by raising taxes to generate over £400m.
Their recommendations would see the cost of a packet of cigarettes increase by 23% after the forthcoming budget, with an ‘escalator’ system creating an increase in cost of £1.29 over the course of the next Parliament.
Mr. Featherstone said that in order to balance income with costs, tax on cigarettes should progressively rise until the full cost to society through smoking is met through taxation.
It’s certainly an interesting proposal, especially since such expensive cigarettes would surely put off most smokers and potential smokers. It would also be worthwhile to apply the same principle to fast food, since the cost of obesity threatens to cripple the NHS in the near future...