Rachel Reeves’s 'eye-watering' taxes pushing city into 'clutches of organised crime' as council accused of 'utter failure'

The small Trading Standards team within the city has caused the issue

Rachel Reeves’ “eye-watering” tobacco taxes are driving Newcastle residents into the “clutches of organised criminals”, the Reform Leader at Newcastle City Council has warned.

One in seven cigarettes in the UK is now illicit and the Chancellor’s tobacco taxes pulled in £1.3billion less than expected in the year to June 2025, according to HMRC’s latest figures - indicating smokers are turning away from legal products, to cheaper, illegal alternatives.

However, in Newcastle, one in five smokers are buying and using illicit products, according to a 2025 survey.

Despite the city’s rampant illicit trade, a new Freedom of Information request has revealed it has just three Trading Standards officers covering 2,000 shops selling tobacco.

Cllr Steven Rutherford, Leader of the Opposition at Newcastle City Council, told GB News the city’s small Trading Standards team meant organised criminals were able to operate with ease.

"If you live in Newcastle, you know illegal tobacco is rife," he said.

"Rachel Reeves' eye-watering tobacco taxes have pushed local people into the clutches of organised criminals selling much cheaper illegal cigarettes, so it's no shock that one in five smokers say they are buying illicit tobacco in our city.

"What does shock me is the utter failure of our council leaders to respond to Newcastle's illicit tobacco crisis.

"Just three Trading Standards officers for 2000 shops is baffling and proves they don't have a grip of this issue."

The Reform Group Leader added: "Now companies are having to go after these crooks selling illegal products themselves.

"This should be a source of shame for the previous Labour council administration and the Lib Dems and Greens who are running things now. Newcastle deserves better than this."

With only three Trading Standards officers for every 666 shops in Newcastle, regulated operators have been forced to take matters into their own hands and issue warnings to commercial landlords that if they don’t stop their tenants from selling illicit products, they will face legal action.

Imperial Brands, one of the country’s largest tobacco firms, has conducted a series of investigations across the North East of England, identifying multiple premises where retail tenants are selling illicit cigarettes.

The company has now written directly to landlords, demanding they prevent illegal tobacco products from being sold in their stores, or face legal consequences.

Deirdre Healy, Imperial Brands UK’s Head of Corporate and Legal Affairs: "Landlords cannot turn a blind eye. If you continue to receive rent from tenants engaged in illegal trade, you may be putting yourself at risk of criminal prosecution.

"Landlords play a critical role and must act responsibly when illegal activity is taking place on their premises."

HMRC's latest annual tax gap report revealed that non-duty-paid products across the UK have reached their highest proportion since 2021.

According to ONS figures, the average price of a packet of 20 cigarettes is £16.60, while a packet of counterfeit cigarettes can be purchased for as little as £3.50.

Despite more and more smokers opting for cheaper, under-the-counter cigarettes, tobacco duties are scheduled to increase again in October, with prices set to rise by two per cent above inflation alongside an additional £2.20 levy per 100 cigarettes or 50g pouch of rolling tobacco.

Cllr Owen Burbidge, Newcastle City Council’s Cabinet member for inclusive economy, said:

“These comments demonstrate a clear lack of recognition for the phenomenal work of the Trading Standards team in Newcastle who are incredibly proactive in working with partners and targeting criminals operating in the city.

“In recent years we have seized almost two million illegal cigarettes, half a ton of illicit hand rolling tobacco, £1.4 million in contraband items or counterfeit goods and an estimated 70,000 illegal vapes. That is on top of the numerous shops issued with closure orders in joint operations with Northumbria Police.

“We do not shy away from using all legal powers at our disposal to deal with offenders, seize their illegal wares and shut down where they are operating from. Every council and police service across the country would benefit from more Government funding, but our Trading Standards team is delivering interventions over and above what is being achieved in other parts of our region.

“To suggest there is a particular issue in Newcastle, or to imply the team is too small to cope with demand, is damaging to public trust and confidence in the services in place to protect communities. It panders to baseless conspiracy theories and contributes to the spread of misinformation we see on social media.

“If Cllr Rutherford has specific evidence of this taking place I would urge him to meet directly with me to provide that, so we can take action alongside Northumbria Police to reduce crime across the city, rather than making unfounded allegations to the Press.”