Q. Smokers already pay more tax than it costs to treat smoking on the NHS.
A. This may be true - tobacco taxation raises revenue of £9.5bn [i] compared with the £1.7bn needed to treat smoking-related illness[ii]. However, this comparison is not particularly valid. Tobacco tax is not intended to be a down-payment of the cost to the NHS of dealing with smoking-related illness. There are two main reasons why UK taxes on tobacco are relatively high: a price incentive to persuade people to give up, and to raise taxes from a source which has relatively little effect on the economy.
In any event, the cost of smoking to the economy is much wider than simply the cost to the NHS. It is estimated that 50 million working days are lost a year to tobacco related illness – about 1% of the total working days. A Canadian study found that smoking breaks cost $2175 (Canadian) per smoker per year (around £1000). Smoking causes fires and accidents (for example the King’s Cross fire which killed 31 people). The costs are not always purely financial – there is also the “social cost” of 120,000 deaths per year. This is an extremely difficult cost to quantify in financial terms. Government cost-benefit analysis for road safety assumes a cost of £800,000 for each road accident death. If this figure were used for deaths due to smoking, the total figure would be £96 billion per year, almost a third of all Government spending. This is an idea of the cost to society as a whole of premature deaths due to smoking.
In addition, if less money was raised from tobacco taxation as a result of fewer people smoking, the extra money which smokers would have as a result would be spent elsewhere in the economy, and tax would be levied on this expenditure. The Exchequer would therefore not necessarily lose out through a reduction in the number of smokers.