The Chancellor George Osborne has again frustrated alcohol public health groups with the 2016 budget. Beer, cider, and spirits duties were frozen, with wine duty to rise in line with inflation.
The Institute of Alcohol Studies (IAS) and other groups had been campaigning for the Chancellor to raise alcohol duty ahead of the budget. A recent IAS report ‘Dereliction of Duty: Are UK alcohol taxes too low? claimed that the Government’s own estimates of the societal costs of alcohol imply that alcohol duty should be raised, even without considering the impact on the drinker themselves, or the benefit to the public purse.
A Government release on the duty impacts though says the freeze 'is likely to lead to a minor increase in overall alcohol consumption in the UK', as alcohol is of course price sensitive. Indeed on the headline hitting sugar tax announcement, Osborne stated "We understand that tax affects behaviour. So let’s tax the things we want to reduce, not the things we want to encourage." Twitter of course raised questions, including whether sugary alcoholic drinks would be affected, or whether parallels could be drawn with the 2012 headline grabbing announcement of minimum pricing - subsequently dropped - which was also timed around a budget with less than impressive economic news.
George Osborne said in his 2016 statement he wanted "to support responsible drinkers and our nation’s pubs" and was also backing the Scotch whisky industry in freezing spirits duty. Alcohol industry voices were of course broadly supportive; Heineken UK's managing director David Forde said “Whilst we would have liked to have seen a cut in these duties; it’s good news that we haven’t had an increase”.
Osborne ended the alcohol duty escalator in 2014 and cut duty rates in 2015 as the Wine and Spirit Trade Associations' (WSTA) Miles Beale said the Treasury had listened to the trade's evidence, championed through a 'Drop the duty' campaign.
Balance North East said the Chancellor had "done nothing to protect young people from the devastating harms of the cheapest, strongest alcohol". Balance and Alcohol Concern released a report last year calling for a spirit duty rise of 4% above inflation as children accessing alcohol treatment consume more spirits than any other type of alcohol.
The Government analysis though acknowledges that despite intending to help pubs, the changes will also help other retailers of alcohol and some alcohol manufacturers and importers. The number of pubs though will no doubt continue to decline, but whether the duty changes will help or hinder will no doubt provoke further debate while off-sales dominate consumption.