UK: Ending smoking could create half a million jobs

Ending smoking in the UK would have particularly beneficial economic consequences for smokers, public finances, and jobs, according to a joint study conducted by Action on Smoking and Health (ASH) and Landman Economics.

The report, published in October 2021, seeks to measure the long-term economic impact of the "end game" in the UK, i.e., the government's goal of achieving zero tobacco consumption among the British population. This study thus takes into account both beneficial and negative effects on various areas, such as employment, tax revenues, the reallocation of available budgets, etc.[1].

16 billion in additional gross added value and hundreds of thousands of jobs created

According to the report, British smokers spend around €18.49 billion each year on tobacco, both legal and illicit. If tobacco consumption were to stop, that would free up much of the purchasing power of former smokers to spend on other goods and services that create more added value. Thus, a tobacco-free UK would see its gross value added (GVA)[2] increase between 15.4 and 16.6 billion euros. Furthermore, the study suggests that between 460,000 and half a million jobs could be created as a result of quitting smoking in the country.

Relieve public finances by 771 million euros

Similarly, the net benefit to public finances would reach more than €771 million, as the tax revenue currently generated by smoking, at around €8.9 billion, is much lower than the health expenditure and reduced productivity linked to smoking (€9.6 billion). Furthermore, this calculation does not take into account the costs associated with the environmental impact of smoking, borne by local authorities.

Introduce a polluter-pays tax

For Action on Smoking and Health, these results demonstrate the need to more intensively combat smoking in the United Kingdom, as much for public health, economic as fiscal reasons. Multinational tobacco companies, controlling 95% of the British market, generate on average high profit margins, in the order of 50%, much higher than those generated by traditional consumer products. Action on Smoking and Health therefore proposes capping the industry's profits at 10%, in order to feed an 830 million euro fund, part of which could be dedicated to the fight against smoking.[3].

FT

[1] Landman Economics, The economic impact of a smokefree United Kingdom: technical report, 10/2021, (accessed 10/27/2021)

[2] GVA is a derivative of Gross Domestic Product. This indicator adds value production at the industry level to the purchase price (price paid by the buyer for each unit of production), excluding intermediate operations involved in production for other industries, in order to avoid double counting.

[3] Action on Smoking and Health, Ending smoking in the UK would increase the number of UK jobs by nearly half a million, 10/23/2021, (accessed 10/27/2021)