A study published last week estimated that 26.8 billion cigarettes are smoked each year in the UK. The state-funded pressure group Action on Smoking and Health (ASH) described this as a “staggering figure” and claimed that it was a “stark reminder of the deadly toll of inaction”. Seizing the opportunity to remind people about the ludicrous Tobacco and Vapes Bill, they said: “Everyday that passes without this legislation is a day lost in protecting our children from addiction and improving public health.”
It is ASH’s job to say things like this, of course, but it is nevertheless perverse to claim that smoking has been the subject of political inaction. It would be truer to say that “tobacco control” is one of the few things that pygmy politicians have been obsessed with in this era of displacement politics. And since the generational tobacco sales ban will not have any effect on anyone until its first victims turn 18 in January 2027, there is no need for parliamentarians to make haste.
Whether 26.8 billion is a “staggering figure” depends on how you look at it. It seems a big number but it is simply a function of 7.5 million smokers consuming an average of 10.4 cigarettes a day. Both of these figures are the lowest on record, no doubt as a result of all that government “inaction”. The study also found that only 5.5 per cent of smokers consume more than 20 cigarettes a day. When it comes to snouts, Britain has become a nation of lightweights.
The more interesting thing about 26.8 billion cigarettes being smoked each year is that only 14 billion cigarettes were sold legally in the UK last year. On top of that, legal sales of hand-rolling tobacco account for between 4.5 billion and 6.3 billion cigarettes (depending on how many fags you think can be made from a kilogram of loose baccy), but that still leaves between a quarter and a third of all the cigarettes smoked unaccounted for.
The growth of the black market explains why tobacco tax revenues have slumped by £2 billion a year since 2021
The Treasury calls these cigarettes “non-duty paid”. Some of them are brought to the country legally under duty free, but most are smuggled in and sold on the black market. Either way, the government doesn’t make any tax revenue from them. The growth of the black market explains why tobacco tax revenues have slumped by £2 billion a year since 2021 despite tax rates being repeatedly hiked. In the same period the amount of tobacco sold legally in British shops has dropped by more than 40 per cent.
You need neither a deer-stalker nor a magnifying glass to see what is going on here. Tax rises have made legal cigarettes unaffordable and so smokers have turned to the illicit traders where the going rate is £5 per pack. At least one in four cigarettes are now “non-duty paid” and tobacco duty revenue has plummeted as a result.
HMRC is in denial about this. When it published its “tobacco tax gap” estimates last month, it claimed that only one in ten manufactured cigarettes was “non-duty paid” in 2023/24. Its estimate for hand-rolled cigarettes was higher at 22.9 per cent but this still seems too low given that the amount of hand-rolling tobacco sold legally has nearly halved in the last three years while the number of smokers has declined only slightly. Almost unbelievably, its estimate of the proportion of hand-rolling tobacco that is “non-duty paid” is the lowest on record.
With the government’s policy on tobacco being literal prohibition, the belief that the illicit tobacco market is small and getting smaller must be comforting, but basic arithmetic shows that it is the opposite of the truth. We know that there has been only a modest decline in the number of smokers since 2021 and we know that they have not been consuming fewer cigarettes. We also know from tax receipts that the number of cigarettes sold legally, whether manufactured or hand-rolled, has fallen by more than 40 per cent. This leaves a massive shortfall which, by definition, can only have been filled by “non-duty paid” tobacco.
Empty pack surveys show that 26 per cent of the manufactured cigarettes in the UK are counterfeit or contraband. Only Ireland and France, both of which also have very high rates of tobacco duty, have more illegal cigarettes on the market. You only need to pay attention to your surroundings to see the discarded packets of Manchester and Top Gun, neither of which are sold legally in the UK, on pavements and in beer gardens. Even the BBC has woken up the scale of the problem. It is only the man in Whitehall who insists that there is nothing to see here.
