Rachel Reeves could be giving a “Christmas gift to the black market” with new taxes that will make tobacco pricier than frankincense and myrrh next year, a Conservative MP has said. A new £2.20 duty tax on every 50g of rolling tobacco on top of a predicted 2% rise in RPI will make it more expensive than both of the biblical Christmas gifts, according to estimates.

The tax on rolling tobacco will come in on October 1, 2026, and would mean Britain has the most expensive tobacco in Europe. The move has come under fire for targeting cigarette manufacturers in place of the UK’s black market for tobacco. Labour estimates that the new tax will bring in £595million between 2026 and 2031. However, according to a 2025 report by KPMG, the Treasury lost £3.15billion in tax revenue because of illegal tobacco consumption last year.

Jack Rankin, Conservative MP for Windsor, slammed Reeves’ decision. He said: “When rolling tobacco ends up costing more than frankincense, you know the Chancellor has lost the plot. This isn’t a public health strategy – it’s a Christmas gift to the black market.”

Labour’s new duty tax alongside the RPI rise will mean that a 50g pouch of Amber Leaf will cost Brits £1.06 per gram – more expensive than the 83p equivalent for Frankinsense. Rolling tobacco could also outprice myrrh, which costs £1.12 per gram, by 2028, when a gram of tobacco will set you back £1.16.

“Ordinary shopkeepers are being undercut, the Treasury is haemorrhaging revenue, and criminal networks are laughing all the way to the bank,” Rankin added.

Criminal gangs dodging duty tax sell cigarettes for as little as £5, three times cheaper than a legal pack. Almost half of cigarettes sold in the UK last year were illegal, according to IPSOS.

This year the Treasury lost a further £1.4billion in tobacco tax as people ditched official shops for cheap goods sold by illicit sellers.

Tobacco smuggling in the UK often involves international organised crime groups. Illicet tobacco and cigarettes, made for cheaper abroad, are smuggled accross the border and sold by gangs in shops across the UK. They undercut honest local businesses, can drive a rise in crime, and rip-off the taxpayer by dodging duty fees.