Drinks industry trade groups are uniting to urge the Government to abandon its alcohol tax escalator and stop raising duty. Ahead of March's Budget, five trade bodies will present a submission to the Treasury calling for a re-think after last year's rise in excise duty.
This follows a petition organised by the Morning Advertiser calling on the government not to raise alcohol taxes any further. More than 1,100 people signed the petition asking the Chancellor of the Exchequer to resist calls by the Alcohol Health Alliance to raise taxes by as much as 30% in a bid to tackle binge-drinking. The Prime Minister’s office responded:
This response is at odds with the evidence found by the University of Sheffield in research commissioned by the Department of Health: pricing is an effective mechanism for reducing alcohol consumption and associated harm. In reaction to the research, the government has so far limited policy to curbing price promotions, rather than addressing price per se. The government apparently assesses the political risks of linking price to consumption as too great at present.
But as pubs continue to close at an alarming rate, the government will come under increasing pressure not to use alcohol duty as an easy way to raise money. Licensing Minister Gerry Sutcliffe got into difficulty last year when trying to defend the licensed trade from tax rises, leaving industy lobbyists pretty much on their own to fight on two fronts: against the public health arguments linking price to consumption; and against a Treasury desperate to increase its income.
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