The UK could raise £4.9 billion over five years and improve public health outcomes through a proposed tobacco industry levy that would cap wholesale tobacco prices while increasing taxes, according to new research from the University of Bath Tobacco Control Research Group and the University of Sheffield’s Addictions Research Group. The study provides the first real-world modelling of a “polluter pays” tobacco levy designed to prevent tobacco companies from using pricing as a marketing strategy while generating significant revenue for the government.
Researchers found that the proposed policy could raise between £1 billion and £4.9 billion over five years, depending on how quickly the price cap is introduced and the level at which it is set. Over 20 years, the policy could also prevent up to 10,000 hospital admissions, save nearly 44,000 years of life, and reduce smoking-related deaths. The findings suggest that stronger price caps combined with higher tobacco taxes would produce the greatest improvements in public health, particularly among the most disadvantaged communities.
Dr Rob Branston, Co-Director of the University of Bath Tobacco Control Research Group and co-author of the study, said the policy could build on the UK Government’s Tobacco and Vapes Act by further reducing the harms caused by smoking. He noted that tobacco companies continue to generate substantial profits from products that kill more than half of their long-term users. According to Dr Branston, the levy would deliver “multiple wins” by raising government revenue, improving health outcomes, and benefiting lower-income populations the most.
Under the proposed scheme, the government would set a maximum wholesale price that tobacco companies could charge for cigarettes and other tobacco products. Taxes would then be increased to prevent retail prices from falling, ensuring that smoking remains less affordable while shifting profits away from the tobacco industry and towards public revenue. Researchers noted that cigarette prices currently vary widely in shops, with some packs costing around £13 while others approach £20, despite causing the same level of harm. Standardising prices at a higher level could reduce smoking rates while generating additional tax income.
The modelling exercise, led by the Sheffield Addictions Research Group, tracked 250,000 individuals in England aged 18 to 89 across six policy scenarios. The analysis compared different levels of price caps and implementation speeds against a business-as-usual scenario. Researchers found consistent results across all scenarios, including reduced smoking prevalence, fewer hospital admissions and deaths, higher tax revenues, and narrower price differences in the tobacco market. An immediate hard cap introduced in England could generate £4.9 billion by 2029 and prevent more than 1,600 deaths and over 10,000 hospital admissions by 2044.
Health organisations, including ASH, Cancer Research UK, STOP, and the All-Party Parliamentary Group on Smoking and Health, have previously supported the idea of a polluter pays levy. Hazel Cheeseman, Chief Executive of ASH, said there is strong public support for making tobacco companies pay for the harms caused by their products rather than placing the burden on taxpayers. She added that as smoking becomes increasingly concentrated among disadvantaged populations, sustained funding is needed to support smoking cessation efforts and reduce health inequalities. With the Tobacco and Vapes Act now in place, campaigners are urging ministers to consider the levy as part of a long-term strategy to create a smokefree UK within the next two decades.
More information: Duncan Gillespie et al, Reducing tobacco supplier profits and pricing power: Modelling the impact of a tobacco price cap and tax increase on socioeconomic inequalities in England, Social Science & Medicine. DOI: 10.1016/j.socscimed.2026.119325
Journal information: Social Science & Medicine Provided by University of Bath