Rachel Reeves tax means product ‘dearer than frankincense and myrrh’ | Politics | News | EUROtoday

Rachel Reeves may very well be giving a “Christmas gift to the black market” with new taxes that can make tobacco pricier than frankincense and myrrh subsequent yr, a Conservative MP has stated. A brand new £2.20 obligation tax on each 50g of rolling tobacco on prime of a predicted 2% rise in RPI will make it dearer than each of the biblical Christmas items, in line with estimates.

The tax on rolling tobacco will are available on October 1, 2026, and would imply Britain has the most costly tobacco in Europe. The transfer has come below fireplace for concentrating on cigarette producers instead of the UK’s black marketplace for tobacco. Labour estimates that the brand new tax will usher in £595million between 2026 and 2031. However, in line with a 2025 report by KPMG, the Treasury misplaced £3.15billion in tax income due to unlawful tobacco consumption final yr.

Jack Rankin, Conservative MP for Windsor, slammed Reeves’ determination. He stated: “When rolling tobacco ends up costing more than frankincense, you know the Chancellor has lost the plot. This isn’t a public health strategy – it’s a Christmas gift to the black market.”

Labour’s new obligation tax alongside the RPI rise will imply {that a} 50g pouch of Amber Leaf will price Brits £1.06 per gram – dearer than the 83p equal for Frankinsense. Rolling tobacco might additionally outprice myrrh, which prices £1.12 per gram, by 2028, when a gram of tobacco will set you again £1.16.

“Ordinary shopkeepers are being undercut, the Treasury is haemorrhaging income, and legal networks are laughing all the way in which to the financial institution,” Rankin added.

Criminal gangs dodging obligation tax promote cigarettes for as little as £5, 3 times cheaper than a authorized pack. Almost half of cigarettes offered within the UK final yr had been unlawful, in line with IPSOS.

This yr the Treasury misplaced an extra £1.4billion in tobacco tax as individuals ditched official outlets for affordable items offered by illicit sellers.

Tobacco smuggling within the UK usually entails worldwide organised crime teams. Illicet tobacco and cigarettes, made for cheaper overseas, are smuggled accross the border and offered by gangs in outlets throughout the UK. They undercut trustworthy native companies, can drive an increase in crime, and rip-off the taxpayer by dodging obligation charges.