How does revenue from tobacco duties compare to the cost of smoking to the NHS?

Speaking to journalists on the possibility of an outdoor smoking ban, Nigel Farage, the Reform UK leader and MP for Clacton, said that the tax revenues generated by tobacco were “four to five times the cost of the NHS annually”.

It’s not clear exactly what Mr Farage meant, and we’ve asked his office for clarification. 

While he referred to the cost “of” the NHS, it seems likely he intended to say cost “to” the NHS.

While it isn’t correct to say the revenues generated by tobacco duties are four to five times the (total) cost “of” the NHS, it is broadly accurate in relation to the cost of smoking “to” the NHS—in England at least. Tax revenue from tobacco amounts to around 4.6 times the cost of smoking to NHS England. But wider losses smoking brings to the economy—such as through lost productivity—mean tobacco costs England around double the amount it makes.

Tobacco duties are expected to raise around £8.8 billion in 2024/25, according to estimates from the Office for Budget Responsibility (OBR). This is a UK-wide figure however; figures from the Office for National Statistics (ONS) covering England alone put tobacco revenue at £7.5 billion in 2022/23.

The total budget for NHS England (the part of the NHS the UK government controls) in 2024/25 is expected to stand at £177 billion. So on this basis the NHS costs roughly 20 to 24 times the amount raised by tobacco duties (depending on whether we compare to the UK-wide or England figures).

If Mr Farage did mean to refer to the cost of smoking to the NHS, then the charity Action on Smoking and Health (ASH) estimates that smoking will cost the NHS in England £1.9 billion in 2024.

This would imply that tobacco generates 4.6 times as much money across the UK as it costs the NHS in England to treat related conditions.

When factoring in social care in England, ASH found that smoking costs around £3.1 billion, suggesting that tobacco duties generate 2.8 times more than the cost of smoking to the NHS and social care combined.

There are also figures that consider the cost of smoking to the economy as a whole (rather than to the NHS or social care alone).

ASH estimated that in 2024 smoking cost the economy in England at least £21.8 billion, of which £18.3 billion is attributed to smoking’s impact on productivity and smokers dying while still of working age.

If we compare this cost to the economy to the UK-wide tax revenue smoking creates, smoking costs over twice as much as it generates.

If an MP makes a false or misleading claim in their capacity as a public representative, they should correct this quickly in a clear and transparent manner.