In 2023, the UK tobacco industry was worth £22.28 billion. This is an increase of more than £4 billion since 2019, and is predicted to rise further to almost £27 billion by 2029.

Various measures – such as the 2007 ban on smoking in enclosed spaces and the raising of the legal purchase age for tobacco from 16 to 18 – have helped to create a decline in the proportion of people in the UK who smoke, leading to significantly reduced levels of tobacco-related disease, disability, and death.

However, tobacco companies are still making vast profits by selling harmful and addictive products such as cigarettes and roll-your-own tobacco. These profits give the companies enormous power to fight every well-intentioned public health measure, and every incentive to continue to sell these deadly products.

In a sense the companies are addicted to selling them, just as many people are addicted to using these unique deadly products themselves.

So, what can be done to change the incentives faced by the industry?

One leading suggestion, according to Dr Rob Branston, is a system of price controls and a 'polluter pays' levy.

He says:

'This is a scheme to directly cap wholesale tobacco prices and offset any reduction in retail price that this would cause through a new tax – the polluter pays levy.'

This strategy differs from simply increasing tobacco taxes, which deters people from smoking by raising tobacco prices, because it essentially redistributes the profit that tobacco companies currently make from the sale of cigarettes and other tobacco products through two simultaneous mechanisms.

Firstly, a cap on how much tobacco manufacturers can charge for their products based on production costs would lower the vast profit margins they currently make, and that give them ample ability to differentiate prices between cheaper and more expensive brands.

Secondly, the introduction of an additional tax – the polluter pays levy – to ensure that industry price reductions from this price cap do not create lower retail prices, as that would otherwise encourage tobacco use.

The impact of this would be threefold:

• limiting the profit made by tobacco companies and thus reducing their current power to undermine public health efforts
• narrowing the range of tobacco prices in the market, stopping the industry from enticing consumers with lower priced brands
• generating more tax revenue that could be used for public benefits, including funding smoking cessation programmes and cancer treatment

Rob explains:

'At the moment, tobacco prices vary considerably. You can go into a shop and buy 20 cigarettes for about £12 or you can pay almost £19 – and those cigarettes will equally kill you. If you introduce a polluter pays levy and then charge them all at £19, not only will fewer people be able to afford to smoke, but you'd also 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.'

Rob is Senior Lecturer in Business Economics at the School of Management. His research centres on the governance and regulation of organisations, with a particular focus on the global tobacco industry. He is a member of the University's internationally renowned and award-winning Tobacco Control Research Group (TCRG).

For over a decade, Rob has worked alongside a range of bodies including Action on Smoking and Health (ASH), Cancer Research UK, and the National Institute for Health Research, which have used his research to lobby for higher taxes on tobacco products.

As a result of his research in the field, Rob and MPs from the All-Party Parliamentary Group on Smoking and Health have spoken in Parliament multiple times in support of the polluter pays levy approach. In May 2024, Rob gave oral evidence to the House of Commons Tobacco and Vapes Bill Committee.

‘I was invited to be an expert witness,’ he says. ‘You don't know what questions the politicians are going to ask you. I obviously supported the idea to gradually raise the minimum age of sale for tobacco products as this will save lives. The MPs were also very interested in the remarkable levels of profits the tobacco industry continues to make from its deadly products.’

When MPs asked if he would support the introduction of this levy, he asserted:

'On every level, a 'polluter pays' levy would be a win-win for society, so I absolutely support it.'

While the original version of the Bill wasn't passed before the UK's general election in July 2024, it has since been reintroduced by the current Labour government, with stricter elements such as powers to introduce bans on smoking near children's playgrounds and schools.

The Bill does not go so far as to introduce a polluter pays levy, but MPs unsuccessfully (at the time of writing) proposed amendments to the Bill to grant the government a mandate to begin consultation around the scheme.

ASH, Asthma + Lung UK and the British Heart Foundation also called for the polluter pays levy to be included in the government’s Autumn 2024 Budget. An April 2025 strategy document produced by the All Party Parliamentary Group on Smoking and Health also proposed introducing the polluter pays levy scheme as a way to fund essential tobacco control measures to reduce smoking rates .

Rob's research estimates that the introduction of a polluter pays levy could raise as much as £700 million per year for the UK government. This money could then be used to provide public services, or potentially – as charities hope – be ring-fenced into a dedicated health fund to support multiple initiatives to help people quit smoking to improve their health.

It's not just this revenue-generation angle that makes the levy a more effective solution than other possible policy approaches, such as increasing the Minimum Excise Tax, or introducing a minimum pricing strategy, like the approach introduced by the Scottish government that limits the minimum price for each unit of alcohol sold.

Rob explains:

’The trouble with minimum pricing is that the money goes to the industry, so that actually increases their profits, not reduces them. The other challenge for tobacco is: what is a unit in tobacco terms? How do you standardise between different products?’

He continues:

‘With alcohol it's very easy, because it's the quantity of ethanol in the liquid you're buying. But you can't really do that in tobacco terms, because you get different amounts of nicotine per product. You use different amounts of tobacco leaf in different products, so it can't purely be based on the weight. All in all it's a harder policy to apply, as well as a less useful policy. The polluter pays levy approach would cap allowed prices with only a slim profit margin above the tobacco industry’s production costs, which are already well-known given how simple tobacco products are.’

Rob has also been working with a coalition of NGOs in the European Union called the SmokeFree Partnership, which is lobbying for positive changes to tobacco laws in the EU.

The informally named 'tobacco taxation directive', which lays out how tobacco must be taxed across the EU single market is overdue for periodic revision – and his research has been feeding into work around this. In his research he has called for increases in the minimum rates of taxation but also mechanisms that recognise the different levels of wealth across the EU.

Rob also observes:

'If the UK were to adopt the polluter pays levy scheme, it is highly that other countries would follow suit. We saw this with the introduction of plain tobacco packaging. Australia first introduced the requirement and now an increasingly large number of countries, including the UK, have followed suit.'

• López-Nicolás Á, Branston JR 2023, Promoting Convergence and Closing Gaps: A Blueprint for the Revision of the European Union Tobacco Tax Directive, Tobacco Control, 32:30-35.
• Scollo, M & Branston, JR 2022, 'Where to Next for Countries With High Tobacco Taxes? The Potential for Greater Control of Tobacco Pricing Through Licensing Regulation', Tobacco Control, vol. 31, no. 2, pp. 235-240.
• Branston, JR 2021, 'Industry Profits Continue to Drive the Tobacco Epidemic: a New Endgame Approach for Tobacco Control?', Tobacco Prevention and Cessation, vol. 2021, no. 7, 45.
• Branston, JR & Gilmore, A 2020, 'The Failure of the UK to Tax Adequately Tobacco Company Profits', Journal of Public Health (United Kingdom), vol. 42, no. 1, fdz004, pp. 69-76.
• Branston, JR, McNeill, A, Gilmore, A, Hiscock, R & Partos, TR 2018, 'Keeping Smoking Affordable in Higher Tax Environments via Smoking Thinner Roll-Your-Own Cigarettes: Findings From the International Tobacco Control Four-Country Survey 2006-15', Drug and Alcohol Dependence, vol. 193, pp. 110-116.
• Branston, JR & Gilmore, AB 2013, 'The Case for Ofsmoke: the Potential for Price Cap Regulation of Tobacco to Raise £500 Million per Year in the UK', Tobacco Control, vol. 23, no. 1, pp. 45-50.
• Gilmore, AB, Branston, JR & Sweanor, D 2010, 'The Case for OFSMOKE: How Tobacco Price Regulation Is Needed to Promote the Health of Markets, Government Revenue and the Public', Tobacco Control, vol. 19, no. 5, pp. 423-430.