Tobacco ban will fuel black market, says new IEA paper

The government’s generational smoking ban will syphon billions of pounds from government coffers to criminal gangs.

• The UK government receives £10 billion annually from tobacco duty, which risks being lost to criminal gangs under prohibitionist plans.

• HMRC estimates that one in nine manufactured cigarettes and one in three hand-rolled cigarettes were bought illegally in 2021–22; a further 4 per cent were bought abroad, costing £2.2 billion in lost revenue to HMRC.

• 43 per cent of smokers either ‘don’t want to ever stop smoking’ or ‘think I should stop smoking but I don’t really want to,’ only 20 per cent of respondents expressed a strong desire to quit, although most had no intention of doing so in the next three months.

The government’s tobacco ban risks fuelling criminal activity while doing little to reduce smoking, according to a new briefing paper from the free market think tank the Institute of Economic Affairs.

Rishi Sunak has announced plans to ban anyone born after 2008 from purchasing tobacco products, including cigarettes, cigars, and shisha. The ban was originally inspired by New Zealand, but the new Kiwi government now intends to repeal the policy. The Malaysian government has also abandoned similar plans over fears about age discrimination.

In 2004, Bhutan became the only country to introduce a permanent tobacco prohibition in the modern era. The ban has led to smuggling and a thriving black market. A World Health Organization study found an increase in cigarette smoking among minors in Bhutan following prohibition. 

South Africa’s tobacco ban during the Covid-19 pandemic was also found to have been “largely unsuccessful in preventing smokers from purchasing cigarettes on the illicit market”. 

Alcohol prohibition in the United States led to widespread criminality, disrespect for the law, harm to health from unregulated products and falling tax revenues. 

“As the black market grows, tobacco tax revenues will decline, criminal gangs will become richer and more powerful, and, paradoxically, children will find it easier to access cheap cigarettes,” warns paper author Christopher Snowdon, the IEA’s Head of Lifestyle Economics.

The generational ban will create a situation in which a 28-year-old is deemed capable of purchasing tobacco while a 27-year-old is not. “The ban infantilises one cohort of adults, discriminates on the basis of age and raises issues of intergenerational unfairness,” Snowdon writes. Snowdon also predicts that within a decade of the generational ban the government will shift to making the sale of cigarettes illegal, unleashing the full consequences of prohibition. 

The government justifies the ban on the basis that the vast majority of smokers wish they had never started and the healthcare costs associated with cigarettes. But, according to the paper, most smokers are not actively trying to quit, and smokers contribute far more to the state through tobacco duties than smoking costs the NHS.

Snowdon says that the emergence of e-cigarettes and other reduced-risk nicotine delivery products is steadily diminishing demand for traditional tobacco, rendering cigarettes increasingly redundant without the need for a ban.

Christopher Snowdon, report author and Head of Lifestyle Economics at the Institute of Economic Affairs, said:

“The absurdities of a generational tobacco ban will become apparent as soon as the first group of teenagers turns 18 in 2026. The problems of enforcement, criminality and dwindling tax revenues will emerge more slowly but inexorably. The government’s justifications for this huge infringement on personal liberty do not stack up. The New Zealand and Malaysian governments have now turned their back on this prohibitionist ruse and it is time for the British government to look beyond the headlines and have a serious rethink.”