THE UK GOVERNMENT has announced a new excise duty on vapes and a significant reduction in taxes in its pre-election budget today.
With a general election coming this year, Chancellor Jeremy Hunt made the announcement of what is widely seen as a give-away budget, as Labour continues to dominate the polls and the Conservatives have reached historic low levels of support among the UK public.
Speaking in the House of Commons today, Hunt confirmed “the introduction of an excise duty on vaping products from October 2026 and publishing a consultation on its design”.
However, he said that because vapes “play a positive role” in helping smokers quit, there will also be a one-off increase in tobacco duty to ensure vaping remains cheaper than smoking.
Currently, vaping products in the UK are subject to VAT at 20% but, unlike tobacco, they are not subject to an additional excise duty.
The Irish Government has promised to bring in a similar excise duty on vapes but has been criticised, particularly by health campaigners, for deferring its introduction at the time of the last budget announcement in October.
The UK Chancellor also cut personal taxes to their lowest level for almost 50 years.
The most significant new measure is a reduction in national insurance.
Hunt confirmed a 2p cut in national insurance for employees and the self-employed as the centrepiece of a budget clearly aimed at persuading voters to stick with the Tories rather than vote in Keir Starmer’s Labour party, which looks set to win a landslide as things stand.
The national insurance cut from April will be worth an average £450 (€525) for workers and £350 (€408) for the self-employed.
When combined with a previous reduction which came into effect in January it will be worth £900 for 27 million workers and £650 for two million self-employed.
Hunt said: “That means the average earner in the UK now has the lowest effective personal tax rate since 1975 and one that is lower than in America, France, Germany or any G7 country.”
But the changes come against a backdrop of frozen thresholds which will see more people dragged into tax or higher brackets as their earnings rise.
The UK’s National Health Service also received a boost in finances.
NHS England chief executive Amanda Pritchard welcomed Hunt’s announcement of a £3.4 billion investment in NHS productivity through things such as expanding the use of artificial intelligence (AI), cutting paperwork for medics, and improving access to patients.
Hunt also announced an extra £2.45 billion for day-to-day NHS spending, which will cover areas such as wages.
Pritchard said: “Today’s announcement shows the Government continues to back the NHS and the £2.45 billion of extra funding for next year ensures we have the support we need to make continued progress on our key priorities for patients.”
In his Budget speech, Hunt said making changes to the NHS “on the scale we need is not cheap”. The £3.4 billion investment will start in 2025/26.
Hunt also offered more help with child benefits to parents earning over £50,000 and cut the top rate of capital gains tax on property sales, arguing that reducing it from 28% to 24% would bring in more money because of increased activity.
But as he insisted that those with the “broadest shoulders” would pay more, he committed to scrapping the “non-dom status”, which allows wealthy individuals who live in the UK but claim their home is abroad to pay less tax.
Abolishing the loophole was a key Labour pledge that Hunt has now denied them.
Support for the Conservatives has dropped to below the level the party experienced during the fleeting premiership of Liz Truss.
Their support amongst the public stands at just 20% while Labour are riding high at 47%, according to an Ipsos poll published on Monday.
That is the lowest level of support the Tories have had since they reached a 22% nadir during John Major’s government in the mid-nineties, which was soon followed by a landslide victory for Labour under Tony Blair.
On top of that, Prime Minister Rishi Sunak’s personal approval rating is at its lowest point since he took office in October 2022.
Of 1,000 people surveyed, just 19% said they were satisfied with his performance, while 73% said they were dissatisfied.
With reporting from Press Association
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