SECRET plans are under way to see how much further the Chancellor can hike taxes on cigarettes and alcohol, The Sun can reveal.
Experts have been allowed to examine details of household spending to see if people cut back on life’s little pleasures when prices get too high.
The results will then be given to HMRC, leading to fears they will be used by Philip Hammond to increase hated duties on fags and booze and push up the cost of an evening out.
Documents seen by this newspaper confirm that management consultants Deloitte are using Office for National Statistics data on living costs “to explore the scope to increase taxes on cigarettes and alcohol”.
Last night Christopher Snowdon, head of lifestyle economics at the Institute of Economic Affairs, said: “It is worrying the government is looking for ways to squeeze even more money out of us.
“The UK has some of the most punitive taxes on alcohol and tobacco in Europe. It is time to give the public a break and cut stealth taxes.”
Brits already hand billions of pounds to the Treasury each year in “sin taxes”.
A massive £9 of the £10 price of a packet of 20 cigarettes is made up of tobacco duty and VAT.
And beer duty and VAT make up about a third of the £3.50 price of a pint.
But the tax burden could rise still higher after the new probe to see just how much shoppers are prepared to pay for a pint and a fag.
The ONS’s ethics board has given approval for Deloitte to study “household consumption for alcohol and tobacco products each year from 2008 to 2016”, taken from the Living Costs and Food Survey.
The researchers will take into account how spending varies by shoppers’ “income, socioeconomic group, household size, and region”.
They will then try to “identify trends in consumption, which will be compared to trends in tax revenues raised” – to see if people drink and smoke less when taxes go up, or if they are prepared to swallow the added costs.
The ONS said: “This evidence will be used to form conclusions about which ‘policy levers’ are available to the UK government.
“For example, whether increased taxes on alcohol and tobacco products would result in increased tax income and/or decreased public consumption.”
It could even lead to a new tax on e-cigarette fluid – and renewed calls for a minimum alcohol price in England.
HM Treasury said: “The Treasury did not commission this research. Our cuts and freezes to alcohol duty since 2013 mean a pint is 14p cheaper than it would otherwise have been.”
