Drug Education News

News and views from the Drug Education Forum

Taxing Alcohol

Patricia Hewitt, the Secretary of State for Health, has given an interview to First News in which she says:

I am asking Gordon Brown, as the Chancellor, when he comes forward with the budget next year, to really increase taxes (extra charges that go to the government) on alcohol. And particularly things like alcopops and some of the stuff that quite a lot of teenage boys and girls are drinking. Because, you know, we’ve got a real problem with binge drinking amongst young people.

The BBC follow up and include a quote from the head of the Portman Group, David Poley:

I think it is a superficially attractive solution but it is not necessarily the right solution. Sure, if we increase taxes we are likely to reduce the population’s overall consumption of alcohol but that is not really the problem. The problem is more to do with how much certain individuals drink and the pattern of their drinking. High taxation is a relatively blunt instrument to deal with this complex problem.

Martin Plant, the Professor of addiction studies, University of the West of England, wrote to The Guardian to welcome the proposals:

Alcohol has been becoming steadily more affordable (as a proportion of household income) for more than 25 years. This has been accompanied by escalating per capita alcohol consumption and alcohol-related deaths. Teenagers, for example, now drink twice as much as they did in 1992. The implications of this have been noted by the government’s advisers and by numerous scientific and medical experts. They have also been studiously ignored by successive governments.

The Times says that the suggestion has been given short shrift by officials in the Treasury:

The Treasury pointed out swiftly that after a decision by Mr Brown in his 2002 Budget, alcopops were now taxed at the same rate as spirits. It said that since the alcopops duty was put in line with spirits, raising the duty per bottle by 11p, there had been a 25 per cent fall in the sale of the drink…

… To deliver a similar reduction in consumption, via another 10p increase in the duty on a bottle of alcopops, would mean an increase in the duty by approximately 30 per cent.Under the current taxation structure, that would translate into a duty increase of £1.70 for the average bottle of whisky.

Treasury sources said that to unravel the current taxation structure to allow alcopops to be taxed more heavily than spirits would take at least two years and have to involve discussions with the European Commission.

The report from the Downing Street Lobby Briefing when the Prime Minister’s Spokesperson was asked about the issue by lobby correspondents says:

Asked if the Prime Minister backed Patricia Hewitt’s calls for an increase in taxation on alcohol and in particular alcopops the PMS first checked that there were no First News journalists in the room. She then went on to say that Patricia Hewitt had raised an important issue but that taxation was a matter for HM Treasury. Asked again if Patricia Hewitt was backed by the Prime Minister the PMS again replied that an important issue had been raised and taxation was a matter for HM Treasury.

Here’s some additional resources for those wanting to think about this issue further:

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