A smokers' group has slammed the duty increase on duty on tobacco products as a “smugglers' charter”.
Duty will rise by 5% above inflation from 6pm today - the equivalent of 37p on a packet of cigarettes.
Simon Clark, director of Forest, said: "This is a smugglers' charter. More and more consumers will turn to the black market or buy their tobacco abroad.
"The elderly, the low paid and the unemployed will be hit the hardest but this is an attack on all law-abiding smokers who support Britain's retailers by purchasing their cigarettes at home.
"The only people celebrating this decision will be criminal gangs and tobacco control lobbyists."
Chancellor George Osborne was already committed to increasing duty by 2% above inflation but a submission signed by 91 organisations argued for 5%, saying that increases in disposable income meant that tobacco had remained relatively more affordable than it was in the 1960s.
Mr Clark said a 2% increase had been widely expected, despite the lobbying by health groups.
He said: "We are expecting this to have quite a big effect, in terms of both lost revenue and on British retailers."
Health campaigners warmly welcomed the 5% hike to help smokers quit and dissuade children from taking up the habit.
ASH (Action on Smoking and Health) chief executive Deborah Arnott said: "This is excellent news. Raising the price of tobacco through taxation is the most effective way of encouraging smokers who want to quit to make that first step.
"We are delighted that the Chancellor has listened to the voices of the health community and taken decisive action to tackle the greatest single cause of ill health and premature death.
"This tax rise will also put cigarettes out of the price range of many young people making it less likely that they will take up this lethal habit."
Sarah Woolnough, director of policy at the charity Cancer Research UK, said: "Today's announcement on tobacco duty is welcome news. The cost of tobacco is a major factor in helping encourage smokers to quit and keeping the price high - increasing the duty by 5% above inflation - helps reflect the devastating cost of smoking.
"This also helps make young people think twice about paying for a product that will kill half of all long-term smokers.
"Smoking remains the biggest cause of preventable death in the UK, so we support all effective measures to reduce smoking rates.
"The next big step is to stop young people from starting to smoke.
"We're urging the Government to move forward with plans on tobacco packaging. The answer is plain and removing glitzy, brightly coloured cigarette packs helps reveal smoking as the lethal product it really is."
Eileen Streets, director of tobacco control at the Roy Castle Lung Cancer Foundation, said: "We are very pleased to see the Government has increased tax on tobacco products by 5%. This will mean a standard pack of cigarettes will now cost around 37p extra.
"We know that often the cost of smoking is one of the key factors which encourages people to give up, so we hope this added expense will persuade even more people to try to quit."
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