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The Economic Impact of Vaping

Economic impact of vaping

Let’s step away from the ‘health’ aspect of E-Cigarettes for a second and focus on the economy. The argument has raged for a long time on whether cigarettes help or hinder the economy, and the Governments keen stance to ban vaping in public places and restrict elements such as tank capacity and the sale of E Liquids is fuelling the fire for those inferring that they are doing their best to protect the revenue made from the sale of cigarettes, fearing that the rise of the E-Cigarette will have a negative impact on the economy?

The price of tobacco has risen by 80% over the last 10 years, despite this increase and the pinch that we have all felt thanks to the recession, the average smoker with a 20 a day habit still spends £2,900 per year on their habit, and the total UK annual expenditure on tobacco products sits at around £18 billion.

The price of a pack of 20 premium brand cigarettes is around £7.98, 77% of this price is duty and VAT and in 2014, it was reported that the treasury received revenue from tobacco duties totalling £9.5 billion (although depending on the source, this figure rises to around £12 billion). The duty on cigarettes is aiming to serve 2 purposes; 1) To reduce smoking by increasing the price and 2) to raise taxes from a source that has a minimal impact on the economy. To put this into perspective, it is suggested that the total financial burden to the UK is around £12.9 billion each year.

Smoking is the largest single cause of preventable illness and premature death within the UK and places a significant financial burden not only on the NHS, who bear the cost of around £2 billion each year, but for longer term care such as social care for older smokers (this is estimated at around £1.1 billion). There is so inflammatory sweeping statement saying that ALL smokers are directly costing society, there are many that maintain a high level of fitness – but the facts are there that their health would be improved even further if they stopped smoking, they would have a faster recovery time from illnesses that affect us all at some point in our lives. The sad reality is that if smoking was to be banned completely, all of the revenue it raises would be lost, but the NHS would be left treating the illnesses that have been caused from smoking for many years to come.

The financial impact of smoking extends to the UK’s businesses and its workforce productivity; smoking breaks are said to cost £5 billion per year and increased absenteeism is estimated at £1 billion, there is also an argument over the claim that employees that smoke are more likely to retire younger, decreasing the country’s workforce and adding extra strain onto the already over stretched pension pot. A shocking argument by Philip Morris, a stateside tobacco company came after a survey carried out in the Czech Republic concluded that smoking was in fact a benefit to its economy due to smokers dying prematurely, therefore reducing healthcare costs, housing costs for the elderly and saving on pensions.

There are also costs to the emergency services, who are called to extinguish fires caused by cigarettes, and to the wildlife and animals, being harmed through the incorrect disposable of cigarettes.

This brings us onto the E-Cigarette, initially dismissed by the big tobacco companies as a novelty, as we see with so many innovative and technological developments, they have now changed tact and have begun to acquire the leading E-Cigarette company’s, namely in the UK, US and China. And it’s no wonder, the ecigaretts market in the UK alone is currently standing at an estimated worth of £100 million and globally, £1.8 billion, having started without a market before 2008, these figures SHOULD be causing concern to the tobacco industry, especially when considering that cigarettes sales have dropped by 42% in the last 14 years and with over 10% of that fall occurring within the last 2 years, the future of cigarettes looks doomed, despite the recent vaping backlash.

As the research continues into the health benefits of vaping, we expect to see a rise in those switching to E-Cigarettes as a viable method for smoking cessation, rather than taking advantage of the free support offered via the NHS, reducing the burden placed on them and putting money into the economy with a benefit to both the UKs health and ethical stance”,

Darren Sharples from Cloudstix told us; Cloudstix are supporting the Article20 Legal Challenge.

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