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The UK chancellor should resist industry lobbying to scrap annual rise in alcohol duty

BMJ 2014; 348 doi: https://doi.org/10.1136/bmj.g2060 (Published 13 March 2014) Cite this as: BMJ 2014;348:g2060
  1. Katherine Brown, director
  1. 1Institute of Alcohol Studies, London SW1H 0QS
  1. kbrown{at}ias.org.uk

In the forthcoming UK Budget, Chancellor George Osborne, once dubbed “beer drinker of the year” by the alcohol industry, should not relax the rules on alcohol duty that, in the absence of minimum unit pricing, reduce affordability and hence harm, says Katherine Brown

The run up to this year’s UK Budget, to be announced on 19 March, has seen a campaign by the drinks industry calling on the chancellor of the exchequer, George Osborne, to abolish completely the alcohol duty escalator. This has been in place since 2008 to ensure that the price of alcohol rises at 2% above the rate of inflation. In last year’s Budget, after a similar campaign by the brewing sector, Osborne announced that beer would be exempt from duty increases. This decision saw him awarded the title of “beer drinker of the year” by the All Party Parliamentary Beer Group, which is funded by the drinks industry.

Now we are seeing yet another assault on alcohol pricing policies from the wine and spirits sector. The “Call time on duty” campaign is being led by the Wine and Spirits Trade Association, the Scotch Whisky Association, and the Taxpayers’ Alliance and calls on the chancellor to “Be fair George!” and to call time on the “alcohol supertax” (http://calltimeonduty.co.uk). But, given the burden of harm to society that results from cheap drink and often to innocent bystanders, would this be fair to the public as a whole?

Each year the United Kingdom sees more than 8700 deaths related to alcohol and 1.2 million hospital admissions, and alcohol is estimated to cost society more than £21bn (€25bn; $35bn).1 These figures include costs to the NHS (£2.7bn), the police and criminal justice system (£11bn), and loss of workplace productivity (£7.3bn), and they total more than double the £10bn annual revenue generated from taxes on alcohol.2

Evidence from the UK and abroad shows that reducing affordability is the most powerful tool at a government’s disposal to tackle the problems associated with alcohol. Such problems are experienced not only by individual drinkers but by families, communities, and frontline workers, including healthcare staff in emergency departments and ambulance services as well as the police. Alcohol misuse is exacerbating health inequalities in the UK, and studies have shown that poor people who drink heavily will experience the greatest benefits, in terms of better health outcomes, from raising the price of the cheapest drink.3

Yet alcohol is 61% more affordable today than in 1980,4 because real household disposable incomes have risen considerably more than alcohol prices, and it seems that one of the biggest barriers to tackling this is the power of the drinks industry.

We have already learnt how multinational alcohol producers sought to scupper plans for a minimum price on a unit of alcohol, in Jonathan Gornall’s recent series in the BMJ, “Under the influence,”5 which exposed aggressive lobbying of senior Whitehall officials that misrepresented, and cast doubt on, the evidence to support the policy.

The industry’s current demands come at a time when, in the absence of a minimum unit price, the government is relying on duty on alcohol to set a minimum “floor” price for the cheapest drink. A ban on “below-cost sales,” due to be introduced in April 2014, will prohibit retailers from selling alcohol below the total sum of duty plus value added tax, which in practice will allow strong white cider to be sold for 6 pence a unit and distilled spirits for 32 pence a unit. Society simply can’t afford for such cheap drink to get cheaper.

The present rates of duty on wine and spirits are historically low, especially for spirits, for which duty was frozen for 10 years before the introduction of the duty escalator. In the same period consumption of wine and spirits has increased considerably, and particular concern has been raised about the effects on young women. Wine and spirits make up 73% of alcohol consumed each week by women, and among women aged 16-24 the proportion of spirits drinkers is larger than among any other demographic group.6 Between 2002 and 2010 admissions to hospital of women aged 16-24 that were related to alcohol rose by 76%,7 which has been linked to consistently high levels of drinking.

If the chancellor succumbs to current industry pressure and scraps the planned duty escalator for all alcohol in this year’s Budget, it is estimated by the Treasury that the cost to the exchequer would be £110m in 2014-5.8 This sum could fund 2587 alcohol nurses in emergency departments, 468 085 ambulance call-outs, or 723 684 days of inpatient detoxification services.9

For the government to renege on yet another commitment to tackle the affordability of alcohol, and at the same time deprive the public purse of millions of pounds of tax revenue, would be a gross injustice to British society and to our public services, which are struggling to cope with the burden alcohol poses day in, day out. The chancellor should maintain the alcohol duty escalator and stand by the government’s commitment to crack down on cheap drink. Be fair, George—to us all.

Notes

Cite this as: BMJ 2014;348:g2060

Footnotes

  • I thank Ian Gilmore, chairman of the Alcohol Health Alliance UK.

  • Competing interests: I have read and understood the BMJ Group policy on declaration of interests and declare the following interests: the Institute of Alcohol Studies receives funding from the Alliance House Foundation.

  • Provenance and peer review: Not commissioned; not externally peer reviewed.

References

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