Tory MP Jack Rankin urges lower tobacco duty to curb illicit trade
Jack Rankin, the Conservative MP for Windsor and Parliamentary Private Secretary to party leader Kemi Badenoch, has suggested the Tories should consider cutting tobacco duty if they return to power. He argues that the tax is so high it has fuelled a black market, meaning the Treasury is actually losing revenue rather than maximising it.
Rankin cited figures showing that between one-third and one-half of cigarettes sold in Britain are illicit, costing approximately £3.50 per pack compared to £20 for legal cigarettes. He estimated the Treasury loses between £1.7 billion and £4.7 billion due to this black market, and argued that cutting tobacco duty would follow Laffer curve economics—the theory that reducing tax rates can increase overall revenue. He also criticised sin taxes more broadly as illiberal and ineffective, claiming they reflect civil servants' "religious type belief" in imposing clean lifestyles on the public.
- Tory MP suggests cutting tobacco tax to boost Treasury revenue
- High tax fuels black market worth £1.7-4.7bn
- Argues tax is beyond point where it maximises revenue
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Tobacco duty is a tax on cigarettes that makes them significantly more expensive in the UK. The government uses such taxes to discourage smoking and raise revenue, but critics argue that when the tax becomes very high, it creates an unintended consequence: smokers turn to cheaper, untaxed cigarettes sold illegally on the black market instead.
Conservative MP Jack Rankin has argued that this is exactly what has happened in Britain. He points to evidence suggesting that between one-third and one-half of all cigarettes sold here are illicit, costing around £3.50 compared to legal cigarettes at £20. He contends that this black market trade means the Treasury actually loses billions of pounds rather than gains it.
Rankin, a senior figure in the Conservative Party close to leader Kemi Badenoch, is arguing that his party should consider reducing tobacco duty if it returns to power, to undercut illegal sellers and increase overall tax revenue. His suggestion touches on a broader debate about whether high taxes on goods like cigarettes and alcohol are effective policy tools or counterproductive.
Both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Tobacco duty has become so high it has spawned a massive black market—costing the Treasury an estimated £1.7 to £4.7 billion annually by driving one-third to one-half of cigarette sales underground. Lower duty could restore these lost sales to the legitimate economy, potentially increasing overall revenue through Laffer curve economics. This approach also respects consumer autonomy against what proponents view as state overreach, where government uses taxation not primarily to raise revenue but to enforce behavioural conformity by pricing lawful choices beyond ordinary reach.
The case against
Tobacco causes profound public harm—killing hundreds of thousands annually and costing the NHS billions in treatment—making it a legitimate target for high taxation regardless of black market effects. Revenue maximisation should not guide policy for a product of such lethal consequence; the aim should be reducing consumption, particularly among young people and lower-income groups who bear the heaviest health burden. The Laffer curve remains theoretical in this context, and lowering duty would likely increase smoking rates and associated mortality far more costly to society than any Treasury gains from illicit trade reduction.
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Originally published by Daily Mail as “‘There’s a clear case’ to cut taxes on tobacco, claims Tory MP”.