off course this does not apply to "company vehicles" which are considered as places of work under the new smoking regulations. I believe though that you cannot be prosecuted by the Police in this case but only by the council who have set up the smoking ban in their area but I may be wrong.benny, in todays Britain anything to do with driving can be construed to have broken some law or other. As more and more powers are devolved from the Police to local councils and Transport for London etc. there will be more and more enforcement of petty regulations with the aim of making driving unattractive and to bring in income to the councils.
To answer your question there is no law that bans smoking whilst driving but a Police Officers can report you for Driving Without Due Care if, in their opinion your smoking, was contributing to the fact. They can be very zealous in this as in the instance of the lady who was prosecuted for eating an apple or another driver who took a swig of water from a bottle whilst waiting at traffic lights.