Budget 2017: Cigarette prices could be increased for second time in a year

Average price of a pack could soar to more than £10 if Chancellor decides on second round of 'sin taxes'

Around ten million adults in the UK are smokers - in spite of the ever increasing cost (Getty)

Speculation has mounted about whether the cost of cigarettes is set to increase for a second time in a year in Wednesday’s Budget.

Since the Chancellor already announced an increase in the price of cigarettes in March, the UK’s 10 million smokers are hoping to be spared another hike, which could push the cost of the average pack to over £10.

This week’s Budget is unusual in that it will be the second one this year – which normally only happens when there is a change of government. Philip Hammond effectively gets a second bite of the cherry with the nation’s finances, because last year he announced the 2017 Autumn Statement would become an Autumn Budget, with a much smaller "Spring Statement" next year.

Tobacco is subject to an automatic, annual increase in duty of two per cent above the rate of inflation, with the average cost of 20 cigarettes standing at £9.91 in March after the spring budget slapped an extra 35p on a pack.

Mr Hammond is under close scrutiny with this budget following the debacle of the hastily-abandoned proposal to hike national insurance contributions for the self-employed in his March statement. Some commentators have suggested he will aim to please as many people as possible on Wednesday – and may choose to avoid so-called “sin taxes”.

Around one in five adults in the UK are regular smokers, despite the ever escalating cost of tobacco and continued public health campaigns warning of the risks. Many occasional and social smokers were affected when the EU announced it would no longer allow cigarettes to be sold in packs of ten and would only sell 20s – with some raising concerns this could cause people to smoke more.

On average, around 80 per cent of the price of a packet of cigarettes in the UK goes into the Government’s coffers – although it is as high as 90 per cent on some brands, according to the Tobacco Manufacturers Association, which lobbies on behalf of the industry.

Increasing numbers of smokers are buying their tobacco from abroad, with illegal imports a growing problem for HM Customs and Revenue – which estimates tobacco smuggling costs the UK taxpayer £2.4 billion a year.

Smokers’ rights campaign groups claimed a tax increase would negatively impact poorer people most, as they were more likely to smoke for a variety of reasons often related to stress and mental health problems including depression and anxiety. Simon Clark, director of the pro-tobacco lobby group Forest, said a price increase would "encourage more smokers to buy tobacco on the black market".