The cost of a packet of 20 cigarettes could be increased to £7.42 under the Tories.

  A report by the centre-right think-tank The Policy Exchange says tax on tobacco should be hugely increased to cover the cost of treating smokers on the NHS.

  At the moment, the cost of smoking far outweighs the amount of money the Treasury gets from cigarette duty, the report says. A packet of 20 cigarettes currently costs an average of £6.13. The Policy Exchange wants a 5% tax hike in next week's budget, a rise of 23p.

  And it is calling for further rises over the next five years until the cost of treating those with cigaretterelated complaints is met by the tax from tobacco. This would see the cost of a pack rise by £1.29 to £7.42 over the course of the next Parliament.
  Policy Exchange has been called David Cameron's favourite think-tank - and is said to be highly influential on Tory policy making.

  According to the report, taxes on smoking raise £10billion a year for the Treasury but the cost of treating related illnesses is £13.74billion.

  The Policy Exchange's Henry Featherstone said: "It is a popular myth that smoking is a net contributor to the economy. Our research finds that every single cigarette smoked costs the country 6.5p.

  "In order to balance income and costs, tobacco duty should be progressively increased until the full cost of smoking is met through tax.

  "As a start, the next Budget should increase tobacco duty by 5%."

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