The backbench All Party Parliamentary Group (APPG) on Smoking and Health launched its manifesto for a smokefree future on November 9, 2023, calling on the government to make Big Tobacco pay to deliver a Smokefree future.
Bob Blackman, MP for Harrow East and chairman of the APPG, said, “The APPG strongly supports the Government’s ambition to create a ‘smokefree generation’. In order, however, to maximise the benefits to health, wellbeing and to the economy, the smokefree ambition must be delivered for everyone, and current investment is not sufficient. The APPG’s tobacco manifesto calls on the government to put a ‘polluter pays’ levy on the tobacco manufacturers to provide the necessary funding for a Tobacco Control programme fit to deliver a Smokefree Future for us all.”
Smoking is the leading cause of premature death and preventable disease, costing public finances in England £21bn in 2023, nearly double the tobacco tax take of £11bn. The wider cost to society in the UK was estimated to be £89.3bn, equivalent to around 3.9 per cent of the UK’s GDP.
Howard Reed, director of Landman Economics, who carried out the economic modelling for the APPG, said, “Tobacco company lobbyists argue that the cost of smoking to the NHS is more than made up for by tobacco taxes. But detailed scrutiny of the data shows that the damage to public finances and wider society caused by smoking due to reduced productivity, ill health and early death far outweighs tobacco taxes.”
Modelling by UCL’s Cancer Research UK funded Tobacco Research Group for the APPG of the impact of recently announced additional funding for Stop Smoking Services, and anti-smoking campaigns in 2024, demonstrates it could reduce smoking prevalence significantly. Economic modelling shows that reductions in prevalence deliver immediate financial benefits to public finances.
Howard Reed, director of Landman Economics, commented, “Reductions in smoking provide immediate benefits to public finances by reducing pressure on the NHS and social care systems, increasing tax revenues and reducing social security costs. The £85m investment in stop smoking services and anti-smoking campaigns just announced for 2024 could pay for itself within the year. If all the APPG recommendations were implemented the cost of smoking to public finances could be cut by over £3bn by the end of the next parliament.”
If current government and NHS commitments are implemented in full, sustained and enhanced as recommended by the APPG in its report, smoking prevalence could be reduced by a third to 7.3 per cent during the next parliament. This would deliver immediate benefits to health, wellbeing and the economy, reducing public finance costs by on average £628m a year. The total reduction by 2029 would be £3.1bn made up of:
- £1.8bn reduction in social security payments
- £0.8bn reduction in public service costs (such as NHS and social care)
- £0.5bn net increase in tax receipts (as smoking goes down there are more people in work paying taxes than lost taxes from reduced tobacco sales)
Although reducing smoking prevalence is cost saving to the public purse, upfront investment is still required to achieve this. The ‘polluter pays’ levy on tobacco manufacturers recommended by the APPG could provide the necessary funds.
Mary Kelly Foy, MP for the City of Durham and vice chair of the APPG, said, “Last year I tabled amendments to the Health and Social Care Bill for a ‘polluter pays’ levy on tobacco manufacturers to fund the smokefree future we all support. Despite strong cross party support, the government voted down the amendments. Meanwhile, Big Tobacco continues to make extreme profits selling highly addictive, lethal products. A levy on the industry is popular, feasible and, as our report shows, supported by voters of all political persuasions as well as the majority of tobacco retailers. The manufacturers have the money, the government should make them pay to end the epidemic."
Dr Branston, associate professor of business economics at the University of Bath, said, “The big four tobacco transnationals responsible for 95 per cent of tobacco sales in the UK make vast profits from selling their lethal products. The market leader Imperial Brands, manufacturer of Lambert & Butler and Golden Virginia made net operating profits of 70.5 per cent in the UK in 2021, that means for every £100 in revenue, £70.50 was profit, compared to under 10 per cent on average for UK manufacturing. By capping tobacco manufacturers’ prices and hence profits the UK government could raise up to £700m a year to pay for the measures needed to make smoking history.”
Deborah Arnott, chief executive of Action on Smoking and Health, said, “How can we justify allowing tobacco manufacturers to make unfettered profits from selling addictive and life-destroying cigarettes, when the pharmaceutical industry and utilities like energy and water, all of which sell essential, life-saving products, have their profits strictly controlled. The DHSC run pharmaceutical pricing scheme could easily be adapted for tobacco, raising the additional funds desperately needed to deliver a smokefree future. The next government needs to seize this once in a generation opportunity to make the tobacco manufacturers pay to deliver a smokefree future.”
Mitch Zeller, former director of the US FDA Center for Tobacco Products, said, “The UK has gone far further in regulating tobacco by banning all advertising, putting cigarettes in drab packaging with large graphic health warnings and preventing all cigarette promotion than almost every country in the world including the US. However, the US is way ahead in making the tobacco industry pay for the cost of regulation, while the UK still lets taxpayers bear the cost. Getting on track to the achieve the UK's smokefree vision will need more funding, why not make the tobacco manufacturers pay? If the US can do it, surely the UK can too."