Anyone read his book or watched Sir Alan Sugar (the Apprentice) would have heard him say it many a time, Lock Stock Two Smoking Barrels? Snatch?
I'm an East Londoner born and bred, and yes it's common in most conversations with lads in London, and yes more common in East London. Obviously not in Mayfair or West London but I have heard Spencer in Made In Chelsea use it recently so who knows, it's spreading!
The cockney rhyming slang "Toby Jug" means "mug". Also Americans use frequently the term "mug shot" when referring to a police photograph. All references to the face. So to mug someone off is to say to their face something condescending or demeaning and usually for more impact when in a group of peers to belittle the person you are mugging off.
Got it? Or have I just mugged you off?