Welcome to the teachers section of "smoke’s no joke". We aim to arm you with all the information you need to tackle smoking issues in school.

Downing Street

The economics of tobacco

Cigarette consumption is a major consideration for the UK economy.


£14 billion was spent on tobacco products in the UK in 2010. Cigarettes accounted for 90% of this expenditure. The tax paid on every packet of cigarettes is a lucrative source of revenue to the Government. A pack of 20 premium brand cigarettes currently costs around £6.95 of which £5.40 or 78% goes to the Treasury (Aug 2011). In the financial year 2009/10, the Treasury took over £8 billion in tobacco duties, excluding VAT.


*At these prices, a 20-a-day smoker will spend more than £2,000 a year on cigarettes. Tobacco duty is not adjusted according to person's ability to pay so for people on low incomes, this is a significantly higher proportion of their income than it is for wealthier people.


NHS Piggy Bank The Government has to balance this 'source of income' with the costs to the economy. This includes the provision of health care to treat smoking related illness along with working days lost, social security payments and dealing with tobacco related crime, not to mention the huge sums lost to industry through loss of productivity and absenteeism.


The cost to the NHS alone of treating smoking related diseases is around £2.7 billion per year.


Money

The overall economic burden of tobacco use to UK society is estimated to be around £14 billion per year.


Paying for the impact of tobacco use is such a drain on the economy that even in times of budget constraint, the Government still retains this as a spending priority. In 2010/11, the Government spent a further £80 million on smoking cessation initiatives and £65 million on medicinal aids (e.g. nicotine replacement therapy).


It has been found that the price of cigarettes does affect consumption. Increasing tax levied on tobacco has led to a reduction in both the quantities of cigarettes people buy and the number of people starting to smoke, although this has been undermined to some extent by smuggling.


* The above figures have not taken into account the March 2012 budget tax increase of 37p per packet of cigarettes, which for a 20 a day smoker increases their spending by £135 a year, a figure already in the region of £2,000 per year.


For more information please refer to the Environmental Effects section

For more information please refer to the Worldwide Impacts section

For more information please refer to the Tobacco Law section

For more information please refer to the Tobacco Crime section

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