Smoke tax and early death help UK budget

A British think tank analysis shows smoking brings in almost 15 billion pounds ($A25 billion) each year in tax revenue and savings from smokers' early deaths.

Smoking is worth almost 15 billion pounds ($A25 billion) to the public purse because of the tax revenue from cigarette sales and savings from smokers' early deaths, according to a UK think tank.

The free market Institute of Economic Affairs (IEA) calculated the cost of smoking at 4.6 billion pounds, including treating diseases, tidying up dropped cigarette butts and putting out house fires.

But tobacco duties brought in 9.5 billion pounds a year and the UK government saves 9.8 billion pounds in pension, healthcare and other benefit payments because of the premature deaths of smokers.

The think tank accused politicians of "scapegoating" smokers, drinkers and the obese, claiming the 24.7 billion pound revenue from "sin taxes" far outweighed the costs they impose on the public finances.

"Taken together, Britain's public finances would be AGBP22.8 billion worse off if there were no drinking, smoking or obesity," the IEA research paper said.

The report's co-author Christopher Snowdon, head of lifestyle economics at the IEA said: "We are constantly being told that people who choose to drink, smoke or eat too much are a burden on the UK taxpayer.

"This is one reason why we have seen such aggressive hikes in taxes on alcohol, smoking and very soon, a tax on sugar. But the justification for these taxes is based on an illusion.

"Smokers, drinkers and those who are obese actually provide a net benefit to the public finances, so vilifying them is futile in the quest to make savings for the NHS.

"A careful consideration of the evidence shows that the popular belief that costs will fall if people live healthier and for longer is false. While it's good that we now have longer life expectancies, policymakers must now address how we tackle the financial consequences of the ageing population rather than pointing the finger elsewhere."

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