Tobacco retailers across Kent have warned the 37p hike in the cost of a packet of 20 cigarettes will encourage smuggling.

The Tobacco Retailers Alliance, which represents 26,000 independent shopkeepers across the UK, reacted angrily to the Chancellor's decision in today's Budget.

Whitstable shopkeeper Debbie Corris, an Alliance spokesman, said: "It is very disappointing that the Chancellor has raised the tax on tobacco. All this will do is increase the appeal of buying from smugglers who can charge half of what I do in the shop. You can't blame smokers from being tempted by a 50% off deal, especially in this economic climate.

"The government is introducing a tobacco display ban and looking at introducing plain packaging, both in an effort to reduce underage smoking. So it is ironic that by raising the tax on legitimate sales, the government will be encouraging more underage people to buy from smugglers, who do not care about the age of their customers."

The Alliance claims that the black market in smuggled and counterfeit tobacco already costs the Treasury of £8.2 million each day, and deprives legitimate businesses of trade.

Mr Osborne also used his budget to confirm the government will look at the Thames Estuary airport plans.

Saying he is "concerned about the lack of airport capacity in the south east", he said the transport secretary will report on the issue in the summer.

The Chancellor described his budget as one that rewards working families and helps those looking for work.

However, a Kent fuel campaigner reacted angrily to news that fuel duty will rise by 3p in August despite record petrol prices.

Peter Carroll said it was the "worst case scenario" for hard-pressed motorists.

George Osborne has confirmed tax cuts for the rich and those at the lower end of the pay scale.

From next April, the 50p rate - which is paid by those earning £150,000 a year - is being slashed by 5p.

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Meanwhile, the tax free allowance is rising by £1,000 to £9,000 next year.

And his controversial plans for child benefit have been redrafted - only households with someone earning more than £50,000 will see it withdrawn.

Mr Osborne also said his Budget "unashamedly backs business" - and announced a corporation tax cut to 24% from next month.

But it looks like we'll have to work longer as he announced a review of the state pension age.

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