Budget 2015: third consecutive alcohol duty cut despite health group warnings

This is reblogged from Alcohol Policy UK following yesterday’s UK Budget announcement:

Alcohol duty was again cut in the 2015 budget, winning praise from sections of the alcohol industry but to the dismay of health groups.

The Chancellor George Osborne cut beer duty by one penny on the pint for the third year running, and a 2% cut for spirits and most ciders. Wine duty is unchanged.

A number of alcohol industry groups have continued to call for further cuts to alcohol duty, with a specific ‘Drop the duty’ campaign spearheaded by the Wine and Spirits Trade Association and Scotch Whisky Association.

Speaking in the House of Commons today Osborne said he had dropped duty thanks to the “persistent campaigning of my honourable friends”, referring to a number of Conservative MPs lobbying for cuts to alcohol duty

Brigid Simmonds, Chief Executive of the British Beer & Pub Association said the Chancellor had “listened to consumers, publicans and brewers”, and that the move would boost employment by 3,800. 

However Alcohol Concern’s Jackie Ballard said the government had “once again cast aside the health of the nation to protect the interests of ‘big alcohol”. The Alcohol Health Alliance (AHA) had warned against a further cut in its pre budget briefing paper Our NHS can’t afford for alcohol to get any cheaper. However AHA representatives were reportedly denied meetings with health ministers to discuss the potential impact of alcohol duty cuts on the NHS.

The cut is also likely to reduce the already very limited impact of the ‘below cost ban’ , which is based on the rate of duty paid + VAT. Last year’s budget ended the alcohol duty escalator which had seen alcohol duty rise 2% above inflation since 2008.

Alcohol pricing is considered a key policy issue by health groups given the close correlation between consumption and affordability. The Institute for Fiscal Studies (IFS) has previously called on taxation to be used as a lever to reduce alcohol harms, although highlighted problems with EU laws which do not structure alcohol at an equivalent rate per unit – an area a recent Lords report also called for reform on.

And these were some of the news stories that have appeared:

Scotch whisky producers toast cut in spirits duty

The Scottish Whisky Association (SWA) said it was the first cut in spirits duty in almost 20 years and only the fourth time that excise on whisky had fallen in a century.

SWA chief executive David Frost said the tax cut was “a historic decision”.

He said: “The chancellor’s announcement will be toasted across the whisky industry and by consumers who are getting a fairer deal on tax when they have a drink of Scotch.”

In last year’s Budget, Mr Osborne froze duty on spirits and scrapped the alcohol duty escalator, which had increased duty annually by inflation plus 2% since 2008.

I’m not anti-business but “alcohol misuse has been exacerbated in recent years as government fail to accept the link between cheap prices, higher consumption and resultant harms to individuals and society” (taken from the Lancet report)

Urghh 🙁

2 thoughts on “Budget 2015: third consecutive alcohol duty cut despite health group warnings

  1. Lucy,
    I just looked at the Drop the Duty post. I was laughing in a sad way!
    Our taxes on beer in the City of Minneapolis are about 16%.
    (I think. It’s very hard to figure out.)
    It isn’t stopping anyone from drinking!
    We have new craft beer places right and left!

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