Further to Barmaid's excellent answer:
Very few actions by drivers are
specifically prohibited by legislation. For example, there's no law which
specifically states that you can't drive on the 'wrong' side of the road. If the police see you doing it, they (together with the Crown Prosecution Service) have to decide which
general motoring legislation you've contravened, if any. (e.g. 'driving without due care and attention' or 'dangerous driving'). In some cases (e.g. the guy who drives his milk float, a few yards at a time, along the wrong side of a deserted road at 5am) they'd be unable to to get any prosecution to succeed because the driver wouldn't have broken any laws.
It's just the same when they see someone smoking while driving. The police (and the CPS) would need to decide whether the driver was in full control of the vehicle. If so, he'd be immune from prosecution. However, it's worth noting that people have been successfully prosecuted for eating a Mars bar, or a sandwich, while driving.
Breaking the rules of the Highway Code isn't, in itself, an offence but a court can use the Code to provide guidance as to reasonable standards of driving. The Highway Code now refers to smoking as a 'distraction':
http://www.autotrader.co.uk/EDITORIAL/CARS/new s/36643.html
The CPS website, which gives guidance to prosecutors, doesn't mention smoking, per se, but it does state that selecting and lighting a cigarette while driving may provide sufficient grounds for a charge of driving without due care and attention.
Chris