A tax which is currently being dodged by thousands of Britons could raise enough money for the Treasury to pay the salaries of every member in the British Army, a new analysis has revealed.
Missing tobacco taxes could generate £4.3billion – enough to pay all 74,000 soldiers in the British Army – with nearly £1billion to spare, but the UK’s soaring black market deprives the Treasury of these billions, the data suggests.
It comes as the British Army has been ordered to suspend large-scale training exercises to save just £30million.
The Kremlin has also warned it may attack British military targets because of UK support for Ukraine.
Former British Army Captain and bioweapons expert Hamish de Bretton-Gordon OBE slammed the Prime Minister for refusing to commit to funding Britain’s defences and called for a crackdown on black markets costing the Treasury billions, in order to increase defence spending.
He said: “Andy Burnham’s refusal to commit to increasing defence spending to at least 3 per cent by 2030 means he’s rolling the dice on Britain’s security. We risk being seen as a soft target by Putin.
“The Swedes, the Norwegians, the Poles – even the Greeks – are already at 3 per cent, today. Failing to bring Britain up to that level is a gift to the Kremlin.
“What makes matters worse is the Government is leaving tax revenue – that could be spent on vital hardware and troops – uncollected. Illegal tobacco alone is costing the Treasury billions of pounds a year.
Britain’s missing £4.3billion in tobacco taxes would be enough to pay all 74,000 soldiers in the British Army
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The expert added: “For the sake of our national security, we cannot afford to allow black markets across our economy to rob the Treasury’s coffers and prevent us from investing in our defence.”
Mike Neville, who served in the Royal Military Police in Northern Ireland before becoming a Metropolitan Police Detective Chief Inspector, said: “Andy Burnham won’t stump up the money to defend Britain from Putin, because he says social security can’t come at the expense of national security.
“Well, if he used common sense and plugged our tobacco tax black hole, he would have billions to play with to ensure the British people are safe.
“Labour’s sky-high tobacco duties just drive punters into the arms of criminals who don’t pay a penny to the Treasury. It’s utter madness.
“Burnham needs to get a grip, tackle the illicit tobacco black hole and fund our defences – or otherwise we’ll be sitting ducks.”
The UK’s soaring black market deprives the Treasury of billions annually, the data suggests
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The analysis, conducted by leading accountants KPMG, shows the £4.3billon sum could also pay for 796 Challenger II main battle tank upgrades, 119 Apache gunships, six Type 45 Destroyers, or 47 new F-35B Lightning stealth fighter jets for the RAF.
It could also fund 13,437 air-defence missiles, nearly three times the £1.6billion contract former Prime Minister Sir Keir Starmer signed last year to arm Ukraine with over 5,000 of them.
Meanwhile, the tobacco tax gap could rise further due to hikes by Labour next month.
Tobacco duty will see a one-off uplift of £2.20 per 100 cigarettes and 50g of tobacco, alongside the annual tobacco escalator uplift of RPI + 2 per cent.
Andy Burnham is under significant pressure from multiple sides to commit to increasing defence spending
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REUTERSAs a result, a 50g pouch of rolling tobacco is expected to cost more than £52.
Former Conservative leader Sir Iain Duncan Smith, who served in the Scots Guards, launched a fresh attack on Labour’s tax policy.
He said: “If the Government keeps taxing and taxing people, they end up receiving lower revenues as people go onto the black market – and they lose their tax. This will end up as a tax own goal.”
KPMG estimates one in three cigarettes in the UK are already illicit, an increase of 70 per cent in five years, with 7.3 billion illicit cigarettes consumed in the UK last year.
The decision to cut Army training exercises has caused concern in defence circles that the Prime Minister will fail to increase defence spending to three per cent of GDP.
Mr Burnham is under significant pressure from multiple sides to commit to the raise by 2030.
GB News has approached the Treasury for comment.
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