Rachel Reeves tax means product ‘more expensive than frankincense and myrrh’ | Politics | News
Rachel Reeves could give “a Christmas gift to the black market” next year with new taxes that will make tobacco more expensive than frankincense and myrrh, a Conservative MP has said. A predicted 2% rise in the RPI, along with a new tariff of £2.20 on every 50 grams of rolling tobacco, will make tobacco more expensive than both biblical Christmas gifts, according to forecasts.
The tax on rolling tobacco will come on October 1, 2026, meaning the UK has the most expensive tobacco in Europe. The move came under criticism for targeting cigarette manufacturers rather than Britain’s tobacco black market. Labor estimates the new tax would bring in £595 million between 2026 and 2031. But according to KPMG’s 2025 report, the Treasury lost £3.15 billion in tax revenue due to illegal tobacco consumption last year.
Windsor Conservative MP Jack Rankin criticized Reeves’ decision. He said: “When it costs more to roll tobacco than frankincense, you know the Chancellor has lost the plot. This isn’t a public health strategy, it’s a Christmas present to the black market.”
Alongside the RPI increase, Labour’s new tax levy will mean a 50g bag of Amber Leaf will cost Brits £1.06 per gram; this is more expensive than the 83 pence equivalent for Frankinsense. Rolling tobacco could also surpass the price of myrrh, which costs £1.12 per gram, by 2028; then one gram of tobacco will set you back £1.16.
“Ordinary tradesmen’s incomes are being cut, the Treasury is bleeding money and criminal networks are laughing all the way to the bank,” Rankin added.
Tax-dodging criminal gangs sell cigarettes for as little as £5; This is three times cheaper than the legal package. Almost half of cigarettes sold in the UK last year were illegal, according to IPSOS.
This year the Treasury lost a further £1.4bn from tobacco duty as people abandoned official shops for cheap goods sold by illegal dealers.
Tobacco smuggling in the UK often involves transnational organized crime groups. Illegal tobacco and cigarettes produced cheaper abroad are smuggled across the border and sold by gangs in shops in the UK. They undermine honest local businesses, can lead to increased crime, and rip off taxpayers by evading tariffs.
