The UK could raise up to £4.9 billion over five years, prevent thousands of hospital stays, and save lives by changing the way tobacco companies are taxed, according to a study published in the journal Social Science & Medicine. The idea is to make the industry, not smokers, foot more of the bill for the damage cigarettes cause.
The Big Idea: “Polluter Pays”
The research, carried out by the University of Bath and the University of Sheffield, is the first to model how a so-called “polluter pays” tobacco levy might work in real life. The basic principle is simple: the companies that profit from selling harmful products should be the ones paying for the harm those products cause.
The proposed scheme would do two things. First, it would set a cap on the wholesale price that tobacco companies can charge for their products. This would stop them from using cheap pricing as a way to attract customers. Second, the government would raise taxes to make sure shop prices don’t drop. As a result, tobacco company profits shrink, government revenue grows, and fewer people smoke.
Why This Matters
Cigarette prices in UK shops vary widely. As Dr Rob Branston, co-author of the study, explained: “Tobacco prices vary considerably: you can go into a shop and buy 20 cigarettes for about £13, or you can pay almost £20 – and those cigarettes are equally as harmful. If you introduce a polluter pays levy and then charge them all at £20, not only will fewer people be able to afford to smoke, but you’d also likely gain more tax revenue for the government. Crucially, that tax revenue will come from the profits of the tobacco industry rather than from people who smoke or small retailers.” In other words, cheap cigarettes would disappear, but the extra cost wouldn’t be passed on to customers or corner shops. It would come straight out of industry profits.
What the Numbers Show
The Sheffield team built a detailed computer model, following 250,000 imaginary people aged 18 to 89 across England. They tested six different versions of the policy, varying how strict the price cap was and how quickly it was brought in.
The strictest, fastest version produced the biggest gains. If introduced right away, it could raise £4.9 billion by 2029, prevent 1,636 deaths by 2044, save almost 44,000 years of life and avoid more than 10,000 hospital admissions. The biggest benefits would be felt by the poorest fifth of the population, who currently suffer the most harm from smoking.
“Across all six scenarios we modelled, we saw a consistent pattern: a narrower price range in the market, reduced smoking prevalence, higher tax revenues, and fewer deaths and hospital admissions. While industry revenues declined, consumer expenditure remained largely unchanged, showing that meaningful improvements in public health can be achieved without placing an additional financial burden on consumers,” said Dr Duncan Gillespie, lead author from the University of Sheffield.
Building on Recent Progress
The UK government has already taken steps to reduce smoking with the Tobacco and Vapes Act, which aims to create a smoke-free generation. The new study argues that a polluter pays levy could go further.
“By passing the Tobacco and Vapes Act, the UK Government has protected a generation from the harmful effects of smoking. Our research shows there is an opportunity for further leadership by tackling the vast profits of an industry that kills more than half of its long-term users. This proposed policy would bring about multiple wins: it raises a large amount of money for the government, delivers health benefits, and helps the poorest the most,” said Dr Branston.
Public Support and Next Steps
Health groups have been calling for this kind of scheme for years, including Action on Smoking and Health (ASH), Cancer Research UK, and parliamentary groups focused on smoking.
“There is overwhelming public support for making tobacco companies pay for the harm their products cause. A ‘polluter pays’ levy reflects a clear public mandate to shift the cost burden away from taxpayers and onto an industry that profits from addiction and disease,” said Hazel Cheeseman, Chief Executive of ASH.
She added that those who still smoke today are often the people facing the greatest hardship, making targeted support especially important. With the Tobacco and Vapes Act in place, she argues, ministers should now consult on introducing the levy to help make Britain smoke-free within 20 years.
Gillespie D, Morris D, Chen RKL, Brennan A, Branston JR. Reducing tobacco supplier profits and pricing power: Modelling the impact of a tobacco price cap and tax increase on socioeconomic inequalities in England. Soc Sci Med. 2026 Aug;402:119325. doi: 10.1016/j.socscimed.2026.119325. Epub 2026 Apr 23. PMID: 42215254; PMCID: PMC13249003.