Ultra figures: It may have escaped your attention, but smokers pay quite a lot in tax. 80% of the cost of cigarettes in the U.K. goes to the government. Also, smokers die younger so the government doesn't have to pay pensions for them for as long.
Yes, there are costs of treating someone for lung cancer or bowel cancer or all the other awful things that smoking does to one's health. However, non-smokers aren't immortal - they'll die from something else and need treatment too.
The only study that I've seen on this was in Australia and shows that the government is better off in terms of tax and spending if more people smoke:
http://www.ncbi.nlm.nih.gov/pubmed/9117967
Keep the replies coming and we can also use this thread to show how the British education system fails to teach critical thinking.