The Chancellor Jeremy Hunt’s spring statement of the budget for 2024 has left tobacco prices and excise, fuel duty and alcohol duty unaffected until October 2026, freezing those prices until and beyond the next general election that is planned for this year, while by October 2026 a vaping levy and excise in vaping products will have been introduced, that will be added to VAT that is the only way in which vaping products are currently taxed. The Chancellor announced that a one-off price increase on tobacco will occur in 2026 and will be left unaffected from inflation freezing its price until then.
While tobacco prices remain unaffected from inflation, so will the rate of inflation maintain its figure being left unaffected from already exorbitant tobacco prices. The rate of inflation was affected by high tobacco prices last December in 2023 when it rose to 4% from 3.9% owing exclusively to tobacco and alcohol prices, while it was being anticipated that it would drop. The Chancellor has successfully ensured that tobacco prices will not once more drive inflation higher in the mid-term.
FOREST director and chairman Simon Clark has not welcomed the news of the introduction of excise on vaping products happening in 2026 which will increase their price, by calling the idea ‘stupid’ and ‘short-sighted’. The leader of the smokers’ rights group disagreed with introducing excise duty on vaping products as he said that “If the government is serious about advocating vaping as a substantially less harmful alternative to smoking, a levy on vaping products sends completely the wrong message to consumers. Vaping products are already subject to VAT. Imposing excise duty as well is a stupid, short-sighted and potentially counter-productive measure that could deter many existing smokers from switching to a reduced risk product that has helped millions of smokers to quit”.
However, his reaction on freezing the price of tobacco products until the October of 2026 and increasing it then with a one-off was more modest but still not welcoming the freeze, Simon Clark commented that “Above inflation increases in the cost of tobacco disproportionately punish those on lower incomes. Further tax hikes will drive even more smokers to the black market, taking money from legitimate retailers and putting it into the hands of criminal gangs.” for maintaining his opposition to what could be the case after October 2026.
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