New analysis shows spending to reduce smoking is a good deal for the Chancellor
A new analysis [1] shows that an additional £97 million investment in smoking cessation interventions, in addition to ~£280 million currently spent by government, can further accelerate reductions in smoking. This is estimated to be worth £894 million in 2030 in reduced burden on public finances – delivering a ninefold return on investment.
The analysis, conducted by Action on Smoking in collaboration with the UCL Tobacco and Alcohol Research Group and Imperial College London aimed to assess the investment needed to secure further drops in smoking. They calculated the additional investment would reduce smoking rates by a further 1.2 percentage points by 2030, leading to significant savings to the public purse.
Smoking places a major burden on public finances and the wider economy. An additional new analysis by Landman Economics estimates the cost to public finances to be £16.8 billion a year in England alone, with the cost to the whole of society an estimated £43.7 billion a year in England. [2] The new analysis shows that reducing these costs can be rapid as smoking rates go down. A one percentage point decline in smoking in 2025 could deliver a return for public finances of £690 million in 2026 – with benefits growing over time.
The charity is calling on the Chancellor to prioritise investment to support those who smoke to stop in the forthcoming spending review to realise these benefits. What is more, they highlight the opportunity to raise the needed revenue from highly profitable tobacco manufacturers rather than British taxpayers. A ‘polluter pays’ levy could raise around £700 million in the first year, more than covering the costs needed to rapidly reduce smoking.
Economist Howard Reed, Landman Economics, who led the analysis, said:
“It is well understood that smoking has a significant impact on public finances and the economy, but it is too often assumed that the benefits of reducing smoking are distant. In fact, there are nearly immediate benefits to public finances and the economy when people stop.”
Dr Emma Beard, Principal Research Fellow, UCL, who assessed the estimated impact of further investment to reduce smoking, said:
“A lot of the Government’s focus has rightly been on preventing people from starting smoking however, helping those who currently smoke to stop is vital for bringing down rates of smoking during this parliament and realising the benefits of this. We know what works to help people to stop during middle age and older, and we must prioritise this investment focused on the most disadvantaged communities.”
Economist Dr Rob Branston, Associate Professor at the University of Bath, who has developed the model for a polluter pays levy, said:
“There is a well-founded case for investment to reduce smoking, but there is also no need for taxpayers to foot the bill. Tobacco companies are highly profitable while damaging our economy and public finances. Through a well-designed new levy, the government could limit the industry’s ability to manipulate prices and their profitability while also raising significant tax revenue.”
ASH’s detailed submission to the Spending Review is available here: https://ash.org.uk/uploads/ASH...
Costs of smoking to society are broken down to local level in the ASH Ready Reckoner.
ENDS
Notes to the Editor
Action on Smoking and Health (ASH) is a health charity working to eliminate the harm caused by tobacco use. For more information, visit ash.org.uk. ASH receives funding for its program of work from Cancer Research UK and the British Heart Foundation.
For interviews or more information, contact press@ash.org.uk
References
[1] ASH Spending Review Submission. February 2025
[2] Reed H. Cost Benefit and Public Finance Model of Smoking, Version 2.3. Jan 2025