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** 11 March 2025
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** UK
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** Treasury faces reported revenue shortfall from tobacco taxes (#1)
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** Imperial Brands calls for action on high tobacco taxes (#2)
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** Calls for review as few pharmacies claim payments for smoking cessation service (#3)
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** NHS England to halve workforce in major restructuring (#4)
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** Outgoing NHS England chair voices concerns (#5)
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** Sussex beaches introduce voluntary ban on smoking (#6)
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** Parliamentary activity
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** Written question (#7)
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** UK
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** Treasury faces reported revenue shortfall from tobacco taxes

The UK Treasury has been left with a £2.6 billion gap in expected revenue, blamed on the illicit tobacco trade, as smokers turn to untaxed alternatives to avoid rising duties. The Government’s policy of increasing tobacco tax above inflation each year has been blamed for driving consumers away from legal sales, with official estimates suggesting at least 14.5 per cent of the market is now illicit.

Office for Budget Responsibility (OBR) forecasts had anticipated £11.4 billion in tobacco duty revenue, but only £8.8 billion was raised, marking the largest annual decline on record. The shortfall adds pressure on the Chancellor ahead of the Spring Statement, as the Government faces budgetary constraints and potential spending cuts. Critics argue that the excessive tax hikes have led to diminishing returns, as consumers seek cheaper, untaxed alternatives, reducing the Treasury’s overall income.

Source: The Telegraph, 10 March 2025

See also: HM Revenue and Customs - Measuring tax gaps tables - ([link removed]) HMRC ([link removed])

Editorial note: The Telegraph quote the OBR as saying that a £2.6m drop in tobacco revenue stems from a new “incentive to turn to the illicit market”. This analysis does not feature in previous OBR reports. The OBR's Oct 2024 economic and fiscal outlook ([link removed]) specifically refers to uncertainties in how the 10% duty rise for hand-rolled tobacco (HRT) last October would impact behaviour with the full quote reading: “The main uncertainty in the costing related to the behavioural response, which includes the fall in HRT consumption, as well as switching to related products such as cigarettes and vapes, and the incentive to turn to the illicit market.”

In their forecast evaluation report ([link removed]) last October, the OBR attributes the lower forecast for tobacco duty to “increased substitution from tobacco products to vaping.”

The illicit market in the UK has declined consistently since 2000 alongside steadily increasing tobacco taxes. The UK has a comprehensive anti-smuggling strategy led by HMRC, Border Force and trading standards which has reduced the illicit market share for cigarettes from 20% in 2000/01 to 7% in 2022/23, and 60% to 33% for hand-rolled tobacco.
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** Imperial Brands calls for action on high tobacco taxes

Imperial Brands has urged retailers to campaign for lower excise duties on hand-rolled tobacco, highlighting that the UK now imposes the highest tobacco taxes in Europe. The company warns that the escalating cost of tobacco, which has now surpassed the value of silver, increases the risk of crime and theft targeting retailers. Imperial Brands argue that the recent tax hikes, combined with the significant price disparity between the UK and other European countries, are pushing consumers towards illicit tobacco products. The company encourages retailers to reach out to local MPs to address these concerns.

Source: Better Retailing, 7 March 2025

Editorial note: The tobacco industry has a history of mobilising retailers ([link removed]) in an attempt at building support for policies favourable to industry.
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** Calls for review as few pharmacies claim payments for smoking cessation service

Despite thousands of pharmacies registering for the NHS community pharmacy smoking cessation service, only a small percentage have claimed payments for consultations, raising concerns about its effectiveness. The programme, which aims to support recently discharged hospital patients in quitting smoking, has struggled with uptake due to reliance on hospital referrals, with some NHS trusts choosing alternative local services instead.

Pharmacy leaders point to logistical challenges, unclear referral pathways, and competing service demands as key barriers. Some regions have seen almost no claims, despite high numbers of registered providers. Public health experts are now urging action, with Hazel Cheeseman, chief executive of Action on Smoking and Health, stressing that community-based smoking cessation support is crucial for tackling health inequalities. She has called on NHS England to review how referrals and uptake can be improved to ensure wider access to effective stop-smoking services.

While NHS England maintains that the scheme is running as expected, growing concerns suggest that changes may be needed to maximise its impact.

Source: The Pharmaceutical Journal, 10 March 2025

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** NHS England to halve workforce in major restructuring

NHS England will undergo significant cuts, reducing its workforce from 13,000 to 6,500 in a major restructuring ordered by Health Secretary Wes Streeting. The changes aim to streamline operations, eliminate duplication with the Department of Health and Social Care (DHSC), and increase ministerial control over the health service.

Outgoing NHS England chief executive Amanda Pritchard informed staff of the dramatic downsizing, which has left many feeling unsettled. Several senior leaders, including the deputy chief executive and national medical director, will also depart. The overhaul, led by incoming chief executive Jim Mackey and new chair Dr Penny Dash, follows warnings of a projected £6.6bn financial shortfall.

Source: The Guardian, 10 March 2025

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** Outgoing NHS England chair voices concerns

Richard Meddings, the outgoing chair of NHS England, has expressed concern over the recent departure of several senior leaders, warning that this could pose a significant risk to the service as the government seeks to tighten control. NHS England’s chief executive, national medical director, and other top officials have resigned, marking the beginning of a major restructuring.

The health secretary, Wes Streeting, has announced plans to reduce NHS England’s central workforce by 50%, potentially cutting around 6,500 jobs. While frontline roles will remain unaffected, vacancies will be frozen, and recruitment will be limited. Streeting aims to enhance collaboration between NHS England and the Department of Health and Social Care (DHSC), a move Meddings supports but believes must maintain some separation from politics.

Meddings also highlighted the NHS’s achievements in cost savings and productivity, despite facing challenges like inadequate capital investment. He advocates for greater access to private capital to address the NHS’s infrastructure needs, emphasizing the importance of a comprehensive capital programme in the upcoming 10-year plan.

Source: Financial Times, 11 March 2025

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** Sussex beaches introduce voluntary ban on smoking

Two beaches in East Sussex have become the first in England to implement voluntary no-smoking zones as part of a public health and environmental initiative. The scheme, introduced by local councils, encourages visitors to avoid smoking on designated sections of Bexhill beach and Camber Sands to protect children from second-hand smoke and reduce cigarette litter.

A recent beach clean-up highlighted the environmental harm caused by tobacco waste, which pollutes marine ecosystems. The initiative coincides with No Smoking Day and is supported by a campaign promoting the benefits of quitting smoking. Free support, including counselling and quit aids, is available through local services. Councils hope the move will encourage more smoke-free beaches in the future.

Source: The Argus, 11 March 2025

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** Parliamentary activity
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** Written question

Asked by Paul Davies, Labour, Colne Valley

To ask the Secretary of State for Health and Social Care, how much funding his Department plans to provide for smoking cessation programmes in the 2025-26 financial year.

Answered by Ashley Dalton, Minister for Public Health and Prevention, Labour, West Lancashire

The Government is providing £70 million of additional funding for local authority-led Stop Smoking Services in England in 2025/26. We will invest £10 million of new funding in 2025/26 to support Trading Standards to tackle underage and illicit tobacco and vape sales, and to support the implementation of the measures in the Tobacco and Vapes Bill. The Government is also investing over £100 million over five years to boost HM Revenue and Customs and Border Force’s enforcement capabilities to tackle illicit tobacco, supporting the Illicit Tobacco Strategy. Decisions on other smoking cessation programmes will be announced in due course.

Source: Hansard, 10 March 2025
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ASH Daily News is a digest of published news on smoking-related topics. ASH is not responsible for the content of external websites. ASH does not necessarily endorse the material contained in this bulletin.

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