Paolo Neo, Public domain, via Wikimedia Commons
In the UK, the cost of smoking has skyrocketed over the years, with the average price of a packet of 20 cigarettes now standing at around £14.59. This significant increase is largely due to the heavy taxation imposed on tobacco products, a strategy employed by the government to curb smoking rates and offset the public health costs associated with smoking.
The Breakdown of Cigarette Costs
A closer look at the price of a packet of cigarettes reveals that a substantial portion of the cost is attributed to taxes. As of 2024, approximately 80% of the price of a packet of cigarettes is made up of tax. This includes both excise duty and Value Added Tax (VAT). For instance, on a packet costing £16, around £12.80 is tax2.
Why Such High Taxes?
The rationale behind these high taxes is multifaceted. Primarily, it serves as a deterrent to smoking. Higher prices are known to reduce smoking rates, particularly among price-sensitive groups such as teenagers and low-income individuals. By making cigarettes less affordable, the government aims to discourage smoking initiation and encourage cessation.
Moreover, the revenue generated from tobacco taxes is substantial. In the fiscal year 2022/2023, tobacco taxation raised approximately £10.04 billion for the UK government2. This revenue is crucial for funding public health initiatives and covering the healthcare costs associated with smoking-related illnesses.
The Health and Economic Impact
Smoking is a leading cause of preventable diseases, including lung cancer, heart disease, and chronic obstructive pulmonary disease (COPD). The NHS spends billions annually on treating smoking-related conditions. Estimates suggest that the cost to the NHS ranges between £3 billion and £6 billion per year3. This includes hospital treatments, GP consultations, and prescriptions.
Beyond healthcare costs, smoking also imposes economic burdens through lost productivity and premature deaths. Smokers are more likely to take sick leave and suffer from chronic illnesses, which can reduce their ability to work and contribute to the economy.
The Future of Smoking in the UK
With ongoing efforts to make England smoke-free by 2030, cigarette prices are expected to continue rising. The government’s strategy includes not only high taxes but also public smoking bans, plain packaging laws, and support for smoking cessation programs.
In conclusion, while the high cost of cigarettes in the UK may be a burden for smokers, it reflects a deliberate public health strategy. By imposing heavy taxes, the government aims to reduce smoking rates, generate revenue for healthcare, and ultimately improve public health outcomes.
