Smoking Costs Billions More Than Tobacco Taxes

16th April 2024

Action on Smoking and Health (ASH) published new figures showing the far-reaching impact smoking has on society on the day the consultation to create a ‘smokefree generation' closed. The charity says it demonstrates why action to make smoking history is needed and how this will benefit the whole of society.

The vote in the UK parliament takes place today.

Smoking costs England £49.2bn each year in lost productivity and service costs, plus an additional £25.9bn lost quality-adjusted life years due to premature death from smoking. The figure for lost productivity is far greater than previous estimates as it includes areas of lost productivity where the impact of smoking has not previously been estimated.

One of the new areas of analysis is the loss to the economy from people spending their money on tobacco, which generates fewer UK jobs and lower profit margins for retailers compared with other products and services people would purchase if they didn't buy tobacco. This found that if no one bought tobacco in England, the total benefit to the economy in gross value added would be £13.6bn.

Howard Reed from Landman Economics, who undertook the analysis underpinning the estimate of these costs, said, "Smoking damages society in many ways that people are often unaware of. It is in fact the economic impact of tobacco, far more than healthcare, that creates the biggest costs to society. Local economies with the highest rates of smoking will also pay the highest price often compounding already high levels of disadvantage. A smokefree future is likely to benefit poorest communities the most."

Bob Blackman, Conservative MP for Harrow East, said, "The new analysis published by ASH showing the vast damage to the economy due to smoking comes as no surprise to me. As a former local council leader and MP, I'm acutely aware that smoking inflicts damage to the whole local economy, not just the NHS, with people unable to work and needing social care on average ten years earlier because of the diseases and disability caused by smoking. The new figures are a timely reminder to local authorities and the NHS of why the government's objective of creating a ‘smokefree generation' must be a priority for us all."

The government is proposing to raise the age of sale by one year every year so that those born before 2009 will never be legally sold tobacco. Last month, the new administration in New Zealand pledged to repeal a similar law as part of a coalition deal, claiming it would enable them to cut taxes.

Deborah Arnott, chief executive of ASH, said, "In New Zealand, politicians have made the ludicrous claim that repealing their smokefree generation laws will allow them to cut taxes. The opposite is clearly the case. The cost of smoking to public services and public finances is far greater than the taxes tobacco raises, and there are multiple economic benefits from spending on products that have more value to the economy and create a healthier workforce.

"In England the tobacco tax take is £11.3bn in 2023, but the cost to public finances and the economy is four times greater, so creating a ‘smokefree generation' is the prudent economic strategy for us, as it is for New Zealand."

Alice Wiseman, vice president of the Association of Directors of Public Health, "These new figures reveal the sheer scale of cost that tobacco has on our society. We know that the majority of people who smoke start young and regret ever starting but, because they are addicted, struggle to quit.

"We know that this addiction causes untold harms to individuals’ health and that costs. It costs to provide health and social care and it costs the economy when people aren’t well enough to work.

“Today’s figures put a shocking price on these - and other - financial costs but what is impossible to calculate is the cost to the 64,000 families who lose a loved one every single year as a direct result of tobacco.

Health impacts
Smoking is a leading cause of preventable illness and death. There were 506,100 hospital admissions due to smoking in 2019/20, and in 2019 there were 74,800 deaths attributed to smoking among adults aged 35 and over.

“We simply must make this legislation a reality."

The vote in parliament takes place today.

And it will get even more expensive to smoke
The government will also make a one-off tobacco duty increase of £2 per 100 cigarettes or 50 grams of tobacco from 1 October 2026. No further changes to the duty rates on tobacco products were announced.

NHS Stop Smoking and Stats from the Nuffield Trust