|
Tobacco economics
|
August 2007
Source: action on smoking and health - www.ash.org.uk
Taxation
The Treasury earned £8,000 million in revenue from tobacco duties for the financial year 2005-2006 (excluding VAT).
About 80% of the price of a packet of cigarettes consists of taxation.
The price of cigarettes has a major effect on cigarette consumption. Higher tobacco taxes reduce smoking and smoking related sickness as people cut down, stop smoking, or never start because of the high cost.
Public opinion is largely in favour of increased taxation, according to various opinion polls.
The tobacco industry
Around 3,000 are employed in the tobacco industry in the UK.
The UK cigarette market is dominated by two companies: Gallaher and Imperial Tobacco, which together control around 80% of market share.
About one is six cigarettes and half of all hand-rolling tobacco in Britain is illicit. Tobacco smuggling results in a net loss to the treasury of more than £2 billion a year.
The global tobacco industry produces five and half trillion cigarettes a year. Sales from the six biggest international companies account for half of the worldwide market.
Health costs
Smoking costs the National Health Service (NHS) approximately £1.5 billion a year for treating diseases caused by smoking.
This includes the costs of hospital admissions, GP consultations and prescriptions. The government also pays for sickness/invalidity benefits, widows’ pensions and other social security benefits for dependants.
An analysis of the cost benefits of achieving the government’s targets to reduce smoking has shown that £524 million could be saved due to the reduction in the number of heart attacks and strokes.
Cost to industry
Smoking results in lost productivity caused by smoking breaks and increased absenteeism amongst smokers due to ill-health. There are also cleaning and building maintenance costs.
Each year about 34 million days are lost in England and Wales through sickness absence caused by smoking. In Scotland, the cost of this productivity loss was estimated to be £400 million per annum.
Productivity may be adversely affected by the discomfort and adverse health impacts of exposure to secondhand smoke to non-smokers. This in turn may lead to friction between smokers and non-smokers.
A review of the costs and benefits of making workplaces smokefree in England concluded that there would be a total net benefit of between £2.3 billion and £2.7 billion. |
|
|
|