Latest figures show cost of smoking in England up 25% to at least £21.8 billion

Latest figures show cost of smoking in England is up 25% to at least £21.8 Bn including:

• £1.9 Bn to the NHS
• £1.2 Bn social care costs to local authorities
• £18.3 Bn lost productivity

As the Tobacco and Vapes Bill Committee today starts to scrutinise the Bill line-by-line, ASH publishes new calculations by Landman Economics. This shows that the estimated cost of smoking, as quoted by the Government in the Command paper, Stopping the Start, has increased from £17.0 Bn to £21.8 Bn, a rise of 25%.[1]

Most of this is due to the damage smoking does to the productivity of the nation, which more recent data show has significantly increased over time, rather than the well-known impact smoking has on the NHS and social care systems. The productivity losses are calculated using the UK Household Longitudinal Study, allowing the analysis to be controlled for age group, gender, age of youngest child in the household, highest qualification, ethnicity, disability, housing tenure and region.[2]

Public Health Minister, Andrea Leadsom said:
"Smoking is the number one preventable cause of disability, ill health, and death in this country. As well as its devastating effects on our health, this important research reveals how smoking also costs our society more than £21 billion each year.

"That's why we're introducing world-leading legislation to create the first smokefree generation - saving lives, easing the strain on the NHS, and helping people to save money."

Deborah Arnott, chief executive, ASH, said:
“Health experts gave testimony to parliament last week about the misery caused by smoking to smokers and their families, and the massive burden it puts on the NHS. However, smokers lose many years of healthy life expectancy while they are still of working age, often dying long before they were due to retire. As the new figures published by ASH today demonstrate, this seriously damages the nation’s productivity, putting an even greater burden on the economy than it does on our health and care systems."

ASH has published the national data alongside a new tool that allows local areas to see the impact of smoking in their communities. [3] The ASH ready reckoner tool includes additional costs calculated by Landman Economics for ASH which for England amount to:

• £13.8 Bn cost of informal and unmet care needs for those unable to secure local authority care
• £10.4 Bn lost Gross Value Added” (GVA) because the sale of tobacco generates far fewer jobs than other goods or services as tobacco is not grown and cigarettes are not manufactured in the UK.

The total economic cost for England including these additional costs is £46.0 Bn. [3]

Calculations which have been made of the UK economic cost of other risk factors such as obesity sometimes also include a value for life lost, in line with HM Treasury’s green book estimates of quality-adjusted life years (QALYs).[4] If these were included the total economic cost for the UK would be £93.0 Bn (£78.2 Bn for England). [1] However, it should be noted that QALYs are a subjective measure rather than a direct financial cost, so ASH does not include them in the ASH ready reckoner.

Howard Reed, Landman Economics said:
“There are many years of good quality data about the harms of smoking, and the prevalence of smoking in society, which underpin the Cost Benefit and Public Finance model we have developed for ASH. This has enabled us to provide a detailed analysis of the costs of smoking not just to the NHS and social care, but also to the economy as a whole.

“With every new area we look at we find additional burdens caused by smoking, on public services, the welfare system and the productivity of the nation. By ending smoking the smokefree generation policy will lift a millstone off our economy, a millstone that is completely avoidable and totally unnecessary.”

Commenting on the findings:

Dr Rob Branston, Associate Professor in Business Economics at University of Bath:
“Smoking has had a profound but all too often unrecognised economic impact on our country for more than a century. The economic potential robbed from us by the actions of big tobacco companies over decades and decades is only dwarfed by the misery and tragic loss of life that has accompanied it. We must remove this burden for future generations.”

David Buck, Senior Fellow, Public Health and Inequalities at The King's Fund:
“In the 1990s I undertook some of the early research showing that the sale of tobacco was a burden on British business and not the boon to the economy the tobacco industry claimed at the time. Thankfully rates of smoking have tumbled since then but smoking still places a major burden across society. The smokefree generation ban is necessary to ensure that we do not pass on this inheritance into the future.”

Chris Thomas, Head of IPPR’s Commission on Health and Prosperity:
“IPPR’s modelling has conclusively shown the dire impact poor health has on prosperity. The onset of sickness costs individuals their livelihoods, and the UK’s status as literal sick man of Europe is harming growth and public finances. That’s why the smokefree generation is not just economic good sense, but economic necessity.”

ENDS

Notes to the Editor
Action on Smoking and Health is a health charity working to eliminate the harm caused by tobacco use. For more information see: ash.org.uk. ASH receives funding for its programme of work from Cancer Research UK and the British Heart Foundation.

Contact: press@ash.org.uk . Deborah Arnott, Chief Executive, and Hazel Cheeseman, Deputy Chief Executive, are available for media interviews.

[1] Landman Economics Cost Benefit and Public Finance Model of Smoking. Version 2.2. ASH. May 2024.

[2] Previous estimates of productivity costs used Waves 1 through 8 of Understanding Society, the UK Household Longitudinal Study. The latest analysis also includes Waves 9 through 12.
https://www.understandingsociety.ac.uk/about/about-the-study/

[3] ASH Ready Reckoner. Available online at: https://ashresources.shinyapps.io/ready_reckoner/

[4] HM Treasury and Government Finance Function. The Green Book: appraisal and evaluation in central government. Latest update 27 October 2023. https://www.gov.uk/government/publications/the-green-book-appraisal-and-evaluation-in-central-government