Eric Avebury writes…Society cannot afford to scrap the alcohol duty escalator

Alcohol and Ulcerative ColitisLast week’s Budget saw the Chancellor renege on the Government’s commitment to tackle the problem of cheap alcohol by scrapping the alcohol duty escalator. This move is a step that society simply cannot afford; not only will these duty cuts result in a shortfall of £290 million to the Exchequer when Osborne admits we are still going to be in deficit until 2018, but with the cost of alcohol harm in the UK exceeding £25 billion each year, our public services – particularly the NHS – can’t cope with further demands as a result of increases in drinking levels.

In England there are 15,400 deaths, 1.2 million hospital admissions, and almost one million crimes related to alcohol each year. Yet the harms caused by alcohol are by no means limited to drinkers themselves. Our frontline workers, including nurses, police and ambulance crews, spend far too much of their time dealing with the adverse consequences of excessive drinking, and alcohol is a major driver of inequalities which sees poorer groups disproportionately affected by negative health and social outcomes.

There is a mass of evidence, both from home and abroad that shows one of the most effective means of addressing harms caused by alcohol is to tackle its affordability. “Coming down hard of cheap alcohol” was one of the major commitments outlined in the Government’s Alcohol Strategy in 2012, which promised to introduce a minimum unit price to prevent thousands of alcohol related deaths and tens of thousands of crimes each year.

Yet plans for minimum pricing were scrapped last year, following an intense lobbying campaign from sections of the drinks industry. Instead, the Government put forward proposals to ban the sale of alcohol below the cost of duty plus VAT. Yet this policy, which the Government’s own Impact Assessment admits will do little to reduce levels of alcohol harm, will now be further weakened by the  Budget proposals.

Of particular concern is how the cuts in alcohol duties will impact the very cheap, strong drinks known to be consumed by harmful drinkers. Under the ‘below cost’ ban the 2013/14 rates of duty would set a ‘floor price’ for strong white cider at just six pence per unit of alcohol.

I have tabled questions, asking the Government to clarify how the latest cuts in alcohol duty will affect the floor price of such products, and to what extent they anticipate consumption will increase as a result of these changes. It would be totally irresponsible to encourage yet more drinking by making alcohol cheaper at a time when it is causing so much damage to vulnerable individuals, families, communities and society at large.

My questions are:

 By how much they expect overall alcohol consumption to rise across the UK as a result of the changes in alcohol duty announced in the Budget

What are the definitions of “ordinary cider” and “sparkling cider” and   how the duty on industrially produced white cider will be affected by the changes in the budget.

Following the Budget changes, what will be the minimum cost per unit of alcohol of industrially produced white cider with an Alcohol By Volume  of 7.5% under the new below cost sales ban.

 

 

* Eric Lubbock, Lord Avebury, is a working peer, and Vice-Chair, Parliamentary Human Rights Group. He blogs here.

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11 Comments

  • Is there an error in the title of this piece?

    On the alcohol duty side of things, isn’t there a problem that the more it is taxed, the more people will buy illegally imported booze (depriving the exchequer of any revenue at all) and/or drink even more of the cheaper, stronger stuff?

    Surely educating people and changing the drinking culture is the key?

  • Personally, I do not want to see Britain’s pubs wither and die. Nor do I want to see the more expensive drinks priced out of reach pushing people to drink cheaper alcohol rather than enjoy the better beverages for their taste. I believe wholesale reform is in order. I would do the following:

    1. All alcohol should have a duty applied according to a price per unit alcohol rather than on a percentage basis. The current system means the cheapest alcohol produced for the highest hit per penny gets the least duty; this makes no sense. When introduced these duties should be set to be tax-neutral for a typical drink sold in a pub and then, over time, we should aim to equalise the duties across all drinks. Special incentives for small brewers, etc., can remain. Note that this would incorporate the need for minimum alcohol pricing.

    2. Separate taxation for on-licenses and off-licenses so that the gap in price between supermarket booze and pub booze can be narrowed.

    Society needs to get a grip on the harms of alcohol but we should also recognise the role that alcohol, and pubs in particular, play in our culture.

  • Jenny Barnes 26th Mar '14 - 9:31am

    I agree about the fuel duty escalator. If people knew that fuel duties would rise steadily, they would be encouraged to buy more economical cars. Most people change cars within 5 years, so it would be relatively painless. Also VED needs adjusting to discourage gas guzzlers at the point of purchase.

  • Richard Dean 26th Mar '14 - 10:21am

    Where does the figure of £25 billion come from, and how does that compare with the duty recovered? Would it help if there was a proper study made to assess the actual costs of alcohol to society, including the opportunity costs of taking frontline workers away from other problems, so that duty could be directly related to the actual cost? Without such a study, and regularly updated, we don’t actually know whether or not we’re all subsidising the heavy drinkers.

  • Agree there’s an issue with the title.

    One thought – councils are able to adopt a late night levy where there is an annual charge for anyone selling alcohol after a designated time (e.g. 1am) So it would apply to nightclubs, all night pubs, service stations etc. The revenue is split between police and the council (which is expected to spend revenue on specific related projects such as taxi marshalling, CCTV, improving lighting etc.) but not a penny for the NHS. Given the impact of alcohol on the NHS as quoted above, why shouldn’t the local hospital receive a cut of the funds from a late night levy where imposed? I’m not keen anyway – just looks like an extra business tax to me and I voted against when we considered it – but it seems this would be a practical way to improve the legislation and where councils agree to adopt a late-night-levy, it would allow the cost to the NHS to be recognised.

  • Lord Avebury, increasing duty is completely the wrong policy and I fully agree with Jack’s points. The issue is the supermarkets and off licenses selling super strong alcohol at knock-down prices. We need minimum pricing per alcohol unit, which would force up prices but leave pubs unaffected and would actually level the playing field and stop people tanking up at home and going to the pubs late. Its absolutely shameful that the government backed down from this due to the drinks lobby. The separate taxation for on and off licenses Jack suggests would be a great move too. If people are going to drink to excess, I’d much rather it was in a pub where they’re socialsing with community, providing employment and can we watched over by the publican.

    Our pubs policy document at Spring Conference was very weak in this regard and had nothing in it about the problems competition cheap off license booze cause for our community pubs.

    Another issue with off licenses is they are where our youngsters can get drink easily. You need a lot more balls to walk into a pub and order a pint than stand outside a off license and get someone to buy booze for you. Increasing prices in off licenses would help with this issue too.

  • Simon McGrath 26th Mar '14 - 4:26pm

    @Gareth ” We need minimum pricing per alcohol unit, which would force up prices but leave pubs unaffected and would actually level the playing field and stop people tanking up at home and going to the pubs late”

    Why on earth should Liberals want to try to stop people drinking at home and then going out ?

    You really don[‘t seem to get the idea that people should be allowed to do what they like with their own money, as long as it doesnt harm other people?
    Try reading ‘On Liberty ‘

  • All the fuel duty escalator does is make it ever more difficult for us to get our hands on quality booze at a good price. Thanks, Eric.

  • Nigel Jones 27th Mar '14 - 9:53pm

    I think it is good of Eric to raise this matter, though Jack and Gareth have good thoughts on the way to tackle it, as well as the need to educate people in the harm that alcohol can cause if not handled carefully. By that I do not mean that people should not enjoy a drink, but the emphasis should be on the old phrase ‘a little of what you fancy does you good’. The harmful effects are well written by Eric and need to be publicised more, including the risks of addiction. It has also been known for over a century that the health effects of frequent steady drinking are greater than the occasionaly event where you get drunk.

  • Quite right, best to stop the riff raff drinking. what what.

    Oh wait, sorry. Was the article not a parody?

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