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Big tax hikes on cigarettes urged

A think tank is urging higher taxes on cigarettes to pay for health drives such as cash rewards for pregnant women who give up smoking.

Policy Exchange said every cigarette smoked costs the taxpayer 6.5p, and called for a 5% hike in next week's budget.

The proposal would mean a rise of 23p for a pack of 20 - and further rises over the next five years to make smoking "revenue neutral".

On current estimates, that would see the cost of a pack rise by £1.29 to £7.42 over the course of the next Parliament through the use of an "escalator" system.

Its research found that while tax on tobacco raised £10bn a year for the Treasury, the annual cost of healthcare and other consequences of smoking totalled £13.74bn.

As well as a dedicated service in maternity units, it suggested mums-to-be aged 20 or under should be offered a £10-per-week "financial incentive" to quit - costing £36m annually.

All patients should be offered the Champix (varenicline) pill, which was only used in 20% of cases despite being the "most effective and cost-effective treatment", the report said.

Report author Henry Featherstone, head of Policy Exchange's health and social care unit, said: "Targeted action like this would help reduce England's growing health inequalities, whereby those on lower incomes suffer more ill health, which can largely be attributed to smoking."

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