Cigarette smokers face a jump of up to 50 pence on a packet of 20 from 6pm today despite the Chancellor sticking to Labour's previously announced plans to raise tobacco duty by 2% above inflation, the tobacco industry said.

George Osborne stuck to figures announced by Alistair Darling in March last year but announced plans to change the "tobacco duty regime" stopping companies producing cheaper cigarettes.

He said: "It's clear that the structure of the tobacco duty regime is being exploited to produce cheaper cigarettes so we will change the regime to narrow the differential between these lower cost brands and the rest, and between cigarettes and hand rolled tobacco.

"This will reduce smoking and improve our nation's health."

Paul Stockall, a tax analyst with the Tobacco Manufacturers' Association, said the Chancellor's "differential" changes apply to "proportional and specific excise rates" - equating to an approximate 50 pence rise on economy cigarettes and 33 pence on premium packs.

"In terms of a 25 gram pouch of hand rolling tobacco, that will rise from 60 pence to about 67 pence, taking a pouch to about £7.35," he said.

Chris Ogden, TMA chief executive, said: "The Irish government recognised that tax increases were driving the illicit trade in tobacco and therefore chose not to raise duties at consecutive Budgets. The Chancellor should be looking to follow their example."

The smokers' lobby group Forest criticised the 2% increase and the Chancellor's "social engineering" approach to smoking.

Director Simon Clark said: "Law-abiding consumers who buy their tobacco in British shops are being penalised unfairly.

"The policy also discriminates against those who can least afford it, especially the elderly and the low paid.