Category: Finance

If we take ‘economy’ to mean public as well as private money, then there is a circle of money moving in and out of various sections of government from tobacco usage that swirls like smoke.

Tax on tobacco, for example, contributes around £12.3bn annually to the government’s coffers. That money is then swirled in the system, and completely negated by the estimated £12.9bn cost to the NHS for treatment for smoking.

Those costs can be broken down into a loss of productivity due to smoking related deaths (£3bn) and even £5bn of the cost of businesses from smoking breaks. Action on Smoking and Health estimates that £380m a year is being saved by the NHS through services aimed at stopping people smoking.

So if vaping is healthier than smoking tobacco – an assumption that many health specialists refuse to propagate without further testing (It’s believed that in 2016 e-cigarettes containing more than 20 milligrams per litre of nicotine will be regulated medically) – then logically, as more smokers push their cigarettes aside, the costs should start to reverse, or at least the costs of treatment will drop in line with the tax income. Less will be spent on protection, prevention, advertising and treatment, and theoretically little should be spent on ‘treatment’ of those who vape.

It may be happening now. Vaping is already filling the gap of those giving up cigarettes, and this is big news for the UK economy. According to evidence reported in the Telegraph, vaping sales increased by 75% last year, up to £459m, while spending on other ‘replacement’ therapies fell by 3% after four years of growth. Meanwhile the percentage of adults smoking is steadily dropping, although the money spent on cigarettes continues to rise, perhaps due to rising costs.

Meanwhile, reported deaths or illness due to vaping are negligible to non-existent, other than accidents where youngsters have drank e-liquid, or when vaping has been used incorrectly.

Measuring the overall benefits to the economy will be somewhat complicated by the various bans being introduced across Great Britain. Wales is on the verge of banning vaping indoors, for example, because Welsh health ministers believe it both normalises tobacco behaviour and may act as a gateway towards it. (Curiously, and for similar reasons, vaping could also be banned offshore.) There are an estimated 100,000 vapers in Wales who could be affected, who are pumping money into the UK economy and are, in the eyes of its users, reducing the burden on the NHS.

As well as money going to UK companies, and money being saved by the NHS, there are also the employees at the various vaping stores and websites across the country who benefit. According to the eCig Directory UK there are more than 1,000 such shops stocking starter kits, batteries, E-liquid and so on, and the market is growing.

All sounds good? There is one negative issue; the cheap, under the counter, backroom brewed e-liquids, perhaps flown over with little regard for the safety of those using them. These are not the critically analysed, vastly safer e-liquids produced by laboratories such as EL-Science, but the renegade batches that a minutely small proportion of vapers suffer.

These do not benefit the British purse, unlike the high-street brands that are giving smokers a way out. Yes, more research needs to be carried out and this will soon happen, and yes the vaping industry is still dwarfed by its tobacco counterpart for now, but in the meantime our apparent love for e-cigarettes is creating and maintaining new business – except when it comes to the NHS.