Rachel Reeves ‘turning Britain into black market economy with stealth tax’ | Politics | News
Rachel Reeves criticized for her policies (Image: Getty)
Rachel Reeves risks turning Britain into a “black market economy”, an MP has warned. This comes despite Labour’s £150m crackdown on “organised crime fronts” as part of its new strategy for the high street, with officials saying it would encourage “genuine local businesses” to replace vape shops and mini-marts.
Conservative MP Jack Rankin criticized Labour’s new strategy, accusing the Government of wasting money on the consequences of its own failed tax policies. The Windsor MP claimed the Chancellor’s so-called “sin taxes” were undermining Labour’s efforts to tackle organized crime in British towns and cities and pointed out tobacco tax increases will come into force this year. He said: “This is plaster-and-sticking politics; throwing money at symptoms while ignoring what is actually causing the decline of our high streets.” Mr Rankin added that the Government’s policies had “fueled the rise of shopfronts operating as fronts for organized crime”.
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The condition of Britain’s high streets is negatively impacting people’s health and wellbeing (Image: Getty)
“Reincreasing tobacco taxes does not mean lowering smoking rates; it pushes shoppers directly into the black market and helps criminal operations thrive,” he said.
“If the government really wants to make shocking change, it must rethink its failed approach to so-called sin taxes or we risk turning Britain into a black market economy.”
The Chancellor’s Finance Bill could see a 50g pouch of hand-rolled tobacco reaching around £50 per pack by October, with the Chancellor imposing a £2.20 tax on every 100 cigarettes on top of a 2% annual increase above inflation.
Rohan Pike, former head of the Australian Border Force’s tobacco task force, said: “The government’s approach to tobacco is fueling the problem, not solving it.
“E-cigarette shops and mini-marts are a well-known front for crime, including the sale of black market tobacco.
“Trying to combat their spread while bringing forward a Finance Bill that includes an unprecedented double increase in tobacco duty shows a lack of understanding of the drivers of this growing criminal market.
“This will just funnel more business into the shops and crime fronts that Labor claims they want to close. This doesn’t restore community pride, it rewards the problem.”
The UK high street retail vacancy rate stood at around 13.5% as of the third quarter of 2025.
In January 2025, the Royal Society for Public Health reported that 11.6 million people “felt that their local high street negatively affected their health and wellbeing”.
In January this year, Ms Reeves confirmed that the new financial support for pubs would not be given to other hospitality businesses, and the Chancellor reportedly said the package would be announced “over the next few days”.
Ms Reeves insisted pubs face a “very different” situation to other businesses such as hotels, restaurants and cafes when she attended the World Economic Forum in Davos, according to the Times.
Earlier this year, the Treasury stated that pubs would be given extra financial support due to changes in business rates announced in the budget in November.
Other high street businesses have lobbied for this support to be extended to help them cope with the changing tax situation.
