The UK could raise up to £4.9 billion over five years to significantly improve public health through tobacco price caps and tax increases.
Research published by the University of Bath’s Tobacco Control Research Group and the University of Sheffield’s Addiction Research Group provides the first real-world model of a proposed ‘polluter pays’ tobacco tax collection system.
The study found that proposed policies aimed at stopping the tobacco industry from using pricing as a marketing tool could raise between £1 billion and £4.9 billion over five years, depending on the level of price caps and how quickly they are introduced. It could also prevent up to 10,000 hospitalizations and save approximately 44,000 lives over 20 years.
The UK government has protected a generation from the harmful effects of smoking by passing the Tobacco and Vaping Act. Our research shows there is an opportunity for further leadership by addressing the industry’s massive profits that are killing more than half of its long-term users.
This proposed policy would have multiple benefits: it would raise large amounts of money for the government, provide health benefits, and help the poorest the most. ”
Dr Rob Branston, co-director of the University of Bath Tobacco Control Research Group and co-author of this study
How does the “pay the polluter” levy system work?
The levy would be achieved by setting a maximum wholesale price that the industry can charge for tobacco products, thereby discouraging the industry from using price as a promotional tool. To stop the drop in store prices, the government will increase taxes to compensate for the drop in wholesale prices.
Dr Branston added: “There is a huge difference in the price of cigarettes. You can go to the shop and buy 20 for around £13, and you can pay almost £20, but they are just as harmful. Introducing a levy on polluters and then making it all £20 will not only reduce the number of people who can smoke, but it is also likely to increase the government’s tax revenue. Importantly, that tax revenue is coming from the government’s profits.” Not from smokers or small retailers, but from the tobacco industry. ”
The idea of polluter pays is supported by health organizations such as ASH (UK), Cancer Research UK, STOP and the All-Party Parliamentary Group on Smoking and Health, and has featured in political manifestos, but until now it has remained theoretical.
The University of Sheffield team from the Sheffield Addictions Research Group (SARG) led a dynamic microsimulation modeling exercise across England, tracking 250,000 people aged 18 to 89. The analysis builds on previous research by SARG, which looked at six scenarios that would change the severity and speed of the introduction of tobacco price caps, and which informed Scotland’s minimum unit price for alcohol.
Wholesale price caps and associated tax increases were investigated across six scenarios, and the results were compared to a business-as-usual scenario. Results vary depending on the level of price caps and the speed of implementation, with cap reductions and tax increases resulting in significant changes in consumer behavior, especially for the most disadvantaged 20% of the population.
An immediate hard cap in England could generate £4.9 billion by 2029, reduce deaths by 1,636, reduce loss of life by 43,987 and reduce hospital admissions by 10,073 by 2044.
Dr Duncan Gillespie, a senior research fellow in the School of Population Health at the University of Sheffield Faculty of Medicine and lead author of the study, said: “Across all six scenarios we modeled, we saw a consistent pattern of narrower market price ranges, lower smoking rates, higher tax revenues, and lower deaths and hospitalizations. Industry revenues fell, but consumer spending remained largely unchanged, showing that meaningful improvements in public health can be achieved without additional financial burden.” consumer. ”
Hazel Cheeseman, chief executive of Action on Smoking and Health (UK), said:
“There is overwhelming public support for making tobacco companies pay for the harm their products cause. ‘Polluter pays’ taxes reflect a clear public imperative to shift the burden of costs from taxpayers to industries that profit from addiction and disease.
“As smoking rates decline, those who continue to smoke increasingly face the greatest disadvantage and are the ones bearing the heaviest burden of tobacco harm. This makes it even more important that we put funding where it is needed most to help people quit and reduce health disparities.”
“Following the enactment of the Tobacco and Vaping Act to create a smoke-free generation, ministers should discuss introducing this levy as a sustainable way to raise the funds needed to make the country smoke-free within the next 20 years.”
The research paper, “Reducing tobacco supplier profits and pricing power: Modeling the impact of tobacco price caps and tax increases on socio-economic inequality in England,” is published in Social Science & Medicine (DOI: 10.1016/j.socscimed.2026.119325).
This research was funded by the UK Prevention Partnership through the SPECTRUM consortium, Bloomberg Philanthropies as part of the Bloomberg Initiative to Reduce Tobacco Use (www.bloomberg.org), and Action on Smoking and Health (UK). Dr Gillespie and Professor Brennan are also members of the Local Health and Global Profit consortium.
Both the Tobacco Control Research Group and Local Health and Global Profits are part of the University of Bath-led Center for 21st Century Public Health, which focuses on the commercial, political, economic and social determinants of health, with the aim of improving health, wellbeing and equity at scale.
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Reference magazines:
Gillespie, D. and others. (2026). Reducing tobacco supplier profits and pricing power: Modeling the impact of tobacco price caps and tax increases on socio-economic inequality in the UK. Social science and medicine. DOI: 10.1016/j.socscimed.2026.119325. https://www.sciencedirect.com/science/article/pii/S0277953626004016?via%3Dihub
