Osborne poised to sign up to Miliband's tobacco levy

Fancy a fag? Levy could be passd on to consumers if it passes consultation
Fancy a fag? Levy could be passd on to consumers if it passes consultation
Ian Dunt By

Buried in the small print of today's autumn statement is a firm sign George Osborne is prepared to back Ed Miliband's call for a levy on tobacco.

Tucked away is a promise of a consultation on "the introduction of a levy on tobacco manufacturers and importers".

It seems the Tory chancellor is willing to accept Labour's demand for the levy, which the opposition wants to finance a £2.5 billion cash injection into the NHS. Coincidentally, the chancellor also envisions a similar boost in spending – this time of £2 billion – for the health service.

Quite where that money is intended to come from is not really clear. Osborne committed to using fines from the banks that broke foreign exchange market rules for a £1 billion fund for advanced care in GPs' practices, but that is said to be "building" on the initial investment, which suggests it's a separate funding plan.


I've asked the Treasury for details but they haven't gotten back to us yet. However, the line suggests a growing cross-party consensus on a tobacco levy in addition to the de-facto yearly increase in tobacco taxes which are announced like clockwork during the Budget.

Once levies like this are set up they becoming costing mechanisms for all sorts of things. It's like a bankers' bonus tax – it's considered such a clear-cut case of taking from the naughty to give to the saintly that no politician can resist it.

Interesting, Osborne did not mention this in his speech. He would probably have been drowned out by the Labour MPs jeering at him for aping their leader.

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