Cost of smokers

Much is made by anti-tobacco groups of the cost of smokers and smoking to the NHS (or the economy) in the UK, but such bland statements generally ignore various factors.

"Smoking breaks"

First is the claim that smoking breaks cost the economy millions, or even billions while conveniently ignoring 'coffee breaks' that the non-smokers take.

The fact that breaks are needed/highly recommended in some jobs to remain productive seems to be ignored, as is the rather overwhelming fact that workers taking breaks (of any kind) is a matter between employer and employee, and as long as the work gets done, then there is no monetary cost:

Workers need breaks from their work in order to remain productive and on top of their work. Whether they take a fag break or a coffee break is irrelevant – and one cannot assume that people do not indulge in work activities or discussions while smoking a cigarette or over a cup of coffee or tea. It does not cost the economy – unlike expecting people to work without taking breaks. The question is; does the work get done, not how many minutes were taken out of the day on breaks recharging the mental batteries. And just how many cigarette related fires in the workplace have there been, precisely? This is barrel scraping to the extreme, frankly.

Sick days

Also mentioned in the referenced Daily Mail article is the claim that smokers have more sick days off than non-smokers, with reference to Weng, Ali & Leonardi-Bee (2012) - a piece of research with data of dubious provenance:

• if 3 non-smokers out of a workforce of 1000 have a sick day off, the implication to the research is that there will be about 4 smokers who have a day off. Or put another way, if sick days by smokers are costing business £1.1billion, then sick days by non-smokers are costing those same businesses a similar (but obviously smaller) amount - this amount is never mentioned, but from those numbers £0.83billion would be a decent estimate.
• the researchers cherry-picked their data - it was a meta-study of 29 studies, and of those they examined they used at most 17, and at least 8, to produce individual 'findings.'

Sickness in general

This figure includes [...] and £28.8million from smoking-related sick days.

Sick days due to smoking related illnesses cost us £14.2m every year

Largely bunkum as one commentator points out:

What's a smoking related sick day? Is it when you smoked too many fags the night before? I don't think so. The only thing I can think of that would be classed as a smoking related sick day would be long term absence due to multi factoral diseases that can be related to smoking. Employers tend to have sick pay schemes that are funded from the wage pot anyway. Some don't even pay sick pay. Employers make allowances for employees having time of work on the sick; you can't say that smoking related illnesses are costing them money.

What smoking related illnesses cause time off work? If a person truly has a smoking related illness^‡ that means they cannot work for a period of time it is generally a serious illness that would see them out of work permanently, usually in old age.

^‡Smoking related. That's because many smoking related illnesses can't actually be pinned down to smoking and may have been the result of other factors. A smoking related illness is an illness that may have been caused by smoking.

Littering

If every smoker stopped smoking tomorrow, would the ever decreasing number of bins (especially those with ashtrays in them) disappear completely?

Would thousands of people who clean the streets of litter suddenly find themselves unemployed?

Or would Blackburn and Darwin council/Kingdom Environmental Services be deprived of a further £617,000/yr of income?

I fired off an FOI request to B&D council and asked exactly what they had issued [£75] fines for in the last six months.

...

• Litter – black bag = 2
• Litter – cigarette = 4113
• Litter – food = 16
• Dog fouling = 26
• Litter – other = 110
• Litter – printed material = 9
• Smoke free = 151

...

If it was just about litter, if it was only about 'taking back the streets for law abiding citizens', why would Kingdom also be involved in enforcing smoking bans in indoor spaces and vehicles?

Or £48,700/year (they get 15% of the fines, Kingdom keep the rest) in Flintshire

According to the report, a total of 4330 [of 4,726] of the [£75] fines handed out have been for people dropping cigarettes, with 296 other littering fines and 100 dog fouling fines dished out.

Cost to the NHS

Another claim is that smokers cost the NHS, and that they should pay extra for their habit. Ignoring the fact that they already do.

2020/2020 from Nov 2020

• Flat excise duty of £244.78 per 1000 cigarettes.
• Excise rate of 16.50%
• Absolute minimum excise of £320.90 per 1000 cigarettes
• VAT rate of 20%

Inc VAT+Excise	VAT	Inc Excise alone	%age excise	Flat rate excise	Total excise	Actual excise	Net	Total Tax	Tax %age of Cost	Tax/Net
Formula	=A2-A2*(100/120)	=A2-B2	=C2*0.165	C2*£244.78/(1000/20)	=D2+E2	=max(F2,min)	=C2-G2	=B2+G8	=I2/A2	=I1/H2
£8.00	£1.33	£6.67	£1.10	£4.90	£6.00	£6.42	£0.25	£7.75	96.89%	3117%
£8.50	£1.42	£7.08	£1.17	£4.90	£6.06	£6.42	£1.02	£7.48	88.01%	734%
£9.00	£1.50	£7.50	£1.24	£4.90	£6.13	£6.42	£1.37	£7.63	84.81%	558%
£9.50	£1.58	£7.92	£1.31	£4.90	£6.20	£6.42	£1.71	£7.79	81.95%	454%
£10.00	£1.67	£8.33	£1.38	£4.90	£6.27	£6.42	£2.06	£7.94	79.37%	385%
£11.00	£1.83	£9.17	£1.51	£4.90	£6.41	£6.42	£2.76	£8.24	74.92%	299%
£12.00	£2.00	£10.00	£1.65	£4.90	£6.55	£6.55	£3.45	£8.55	71.21%	247%
£13.00	£2.17	£10.83	£1.79	£4.90	£6.68	£6.68	£4.15	£8.85	68.08%	213%
£14.00	£2.33	£11.67	£1.93	£4.90	£6.82	£6.82	£4.85	£9.15	65.39%	189%
£15.00	£2.50	£12.50	£2.06	£4.90	£6.96	£6.96	£5.54	£9.46	63.05%	171%

2017/2018

• Flat excise duty of £207.99 per 1000 cigarettes.
• Excise rate of 16.50%
• VAT rate of 20%

Inc VAT+Excise	VAT	Inc Excise alone	%age excise	Flat rate excise	Net	Total Tax	Tax %age of Cost
Formula	=A2-A2*(100/120)	=A2-B2	=C2*0.165	C2*£207.99/(1000/20)	=C2-D2-E2	=B2+D2+e2	=F2/A2
£6.00	£1.00	£5.00	£0.83	£4.16	£0.02	£5.98	99.75%
£6.50	£1.08	£5.42	£0.89	£4.16	£0.36	£6.14	94.41%
£7.00	£1.17	£5.83	£0.96	£4.16	£0.71	£6.29	89.84%
£7.50	£1.25	£6.25	£1.03	£4.16	£1.06	£6.44	85.88%
£8.00	£1.33	£6.67	£1.10	£4.16	£1.41	£6.59	82.41%
£8.50	£1.42	£7.08	£1.17	£4.16	£1.75	£6.75	79.36%
£9.00	£1.50	£7.50	£1.24	£4.16	£2.10	£6.90	76.64%

2012/2013

Excise on tobacco in the UK for 2012 will be equal to 16.5% of the (pre-excise, pre-tax) retail price plus an equivalent £167.41 per 1,000 cigarettes (£3.3482 per 20.) On top of this 20% VAT is charged. On a £7.50 packet of Marlboro for example, the net cost is £2.02, Excise £4.23 and VAT £1.25 for a total tax-take of £5.48 (73%):

Inc VAT+Excise	VAT	Inc Excise alone	Excise	Net	Total Tax	Tax %age of Cost
Formula	=A2-A2*(100/120)	=A2-B2	=3.3482+(C2-C2*(100/116.5))	=C2-D2	=B2+D2	=F2/A2
£5.50	£0.917	£4.583	£3.997	£0.586	£4.914	89%
£5.75	£0.958	£4.792	£4.027	£0.765	£4.985	87%
£6.00	£1.000	£5.000	£4.056	£0.944	£5.056	84%
£6.25	£1.042	£5.208	£4.086	£1.122	£5.128	82%
£6.50	£1.083	£5.417	£4.115	£1.301	£5.199	80%
£6.75	£1.125	£5.625	£4.145	£1.480	£5.270	78%
£7.00	£1.167	£5.833	£4.174	£1.659	£5.341	76%
£7.25	£1.208	£6.042	£4.204	£1.838	£5.412	75%
£7.50	£1.250	£6.250	£4.233	£2.017	£5.483	73%
£7.75	£1.292	£6.458	£4.263	£2.195	£5.555	72%
£8.00	£1.333	£6.667	£4.292	£2.374	£5.626	70%

From 6pm 27 October 2021

Excise on tobacco in the UK for will be equal to 16.5% of the (pre-excise, pre-tax) retail price plus an equivalent £262.90 per 1,000 cigarettes (£5.258 per 20.) On top of this 20% VAT is charged. On a £9.75 packet of Pall Mall Shift Blue Kingsize from Tesco for example, the net cost is £1.17 Excise £6.41 and VAT £1.63 for a total tax-take of £8.03 (82%):

Inc VAT+Excise	VAT	Inc Excise alone	Excise	Net	Total Tax	Tax %age of Cost
Formula	=A2-A2*(100/120)	=A2-B2	=5.258+(C2-C2*(100/116.5))	=C2-D2	=B2+D2	=F2/A2
£9.75	£1.625	£8.125	£6.409	£1.716	£8.034	82%
£10.00	£1.667	£8.333	£6.438	£1.895	£8.105	81%
£10.50	£1.750	£8.750	£6.497	£2.253	£8.247	79%
£11.00	£1.833	£9.167	£6.556	£2.610	£8.390	76%
£12.00	£2.000	£10.000	£6.674	£3.326	£8.674	72%
£13.00	£2.167	£10.833	£6.792	£4.041	£8.959	69%
£14.00	£2.333	£11.667	£6.910	£4.756	£9.244	66%
£15.00	£2.500	£12.500	£7.028	£5.472	£9.528	64%

Income

Income for 2011/12 (the year prior to these figures) were £9.5bn from Excise and £2.6bn from VAT for a total of £12.1bn. Health care spending (including spending on the likes of Alcohol Concern, ASH, and homoeopathy) was £121.3bn for 2011

In 2017 excise was estimated to be £10.7bn and VAT £2.1bn for a total of £12.8bn.

Note that this implied 10% total funding of the NHS from tobacco, does not include the other tax extracted from smokers (in the manner it is extracted from non-smokers) in the form of VAT on all other products, excise on other products such as fuel etc. (I explicitly don't include excise from alcohol, since there are similar arguments to tobacco that can be made for that.)

Early death

Finally, there is the alleged cost to the 'tax-payer' in the form of old-aged smokers

• if people do have smoking related illnesses in old age, they are more likely to die earlier
• thus they will require less treatment
• additionally they will be drawing down less state retirement pension

However some anti-smoking rhetoric will put an early death as a detriment to the economy:

It estimates that £47.7million is lost in output due to early deaths caused by smoking and £8.5million due to early deaths caused by passive smoking.

The output lost from early deaths is £23.3m a year

Patent nonsense - unemployment in the UK has never been below 3% since 1971 and never been below 5% since 1975. Anyone leaving the workforce due to any reason is likely to be replaced with one of the unemployed:

This also ignores the fact that we do not have a duty to live as long as we can to be sponged off by the state/contribute to the economy. Any commentator coming up with a "lost" money figure is being necessarily speculative, and likely presumes that any (ex-)smoker dying "earlier" than actuarial life tables suggest has died primarily because of smoking.

Additionally Policy Exchange released Nash & Featherstone 2010 which stated:

[...]smoking remains the single largest cause of preventable mortality - over 83,000 deaths in England in 2008³[...]

[...]

[...]and also the [annual] loss in economic output from the deaths of smokers (£4.1 billion) and passive smokers (£713 million).

[...]

³NHS Information Centre. Statistics on Smoking in England. 2009.

£4.813 billion divided by 83,000 people is £57,987.95. I rather suspect that your average person who's died from "smoking related disease/illness" would not - had they lived - have contributed £58,000 per annum to the economy had they not died. Or more pertinently not smoked.

Median gross wage (for men, in full-time work, in London) in 2010 was £33,852. Average gross pension income was £23,192

They also, no doubt, don't bother including the other side of the fence: the people who are (ex-)smokers who live longer such as Jeanne Calment (died 122) who smoked most of her life, Buster Martin (died 104, but exact age disputed) who smoked from the age of seven until his death.