Budget 2020: it’s time to put people ahead of industry profits

Lucy Holmes | March 2020 | 8 minutes

Read our response to Budget 2020 from Lucy Holmes, our Director of Research and Policy.

Alcohol causes too much harm in the UK. That much is obvious to those of us working in the alcohol harm reduction sector. It’s obvious to alcohol treatment providers, to NHS doctors and nurses, and to the hundreds of thousands of people across the UK who lose loved ones to alcohol every year.

Yet that fact does not seem obvious to the Government. Though there are some positive steps which are to be welcomed, the 2020 Budget, announced today [11 March 2020], makes for painful reading.

After many hoped that we’d finally see a reversal of the year-on-year tax breaks for alcohol companies, we’re disappointed to hear that alcohol duties will once again be frozen – this time on all alcohol. This represents a significant real-terms cut. Cheap alcohol is already a huge issue in the UK: despite popular myth, alcohol is 74% more affordable than it was in 1987. That might sound positive to many, but evidence shows that when affordability increases, so does the harm alcohol causes.

Affordability chart

Taken from NHS statistics on alcohol, England, 2020.

In addition to harming public health, reduction in alcohol duty does not help pubs: 98% of North East landlords surveyed by Balance North East say that cuts in alcohol duty have no positive impact on their business and most say that cheap supermarket alcohol is the main cause of pub closures.

In contrast, the increased business rate discount for small and independent pubs announced today is likely to give these community businesses added resilience, which is to be welcomed. But this measure must be paired with dramatically increased funding for alcohol treatment services. After this budget, local authorities stand to lose income from business rates. They are also facing huge uncertainty because the Government is yet to announce their public health grant allocations for 2020/21. Making alcohol cheaper at the same time as chipping away at funding for the local authorities that commission treatment services represents a double penalty for those worst affected by alcohol harm.

Yet there are positives to today’s budget too. The Government has committed £46 million from a new Shared Outcomes Fund “to provide improved support to individuals experiencing multiple complex needs, such as homelessness, reoffending and substance misuse”. It has also committed to £262 million for substance misuse treatment services to support people sleeping rough. With figures compiled by outreach workers suggesting that 44% of rough sleepers experience problems with alcohol, this funding is a vital step towards ensuring that this vulnerable community has the support they need.

That said, we must see this announcement in context. In Collective Voice’s statement on the budget, they urged that we keep things in perspective: “… the public health grant has been cut by £850 million since 2014/15 as part of wider local government reductions. And while ring-fenced innovation funding pots are welcome to any field, it’s essential they are not used to simply plaster over decimated core budgets for life-saving services.”

Looking at the whole picture, the real beneficiary of this budget appears to be the alcohol industry. While we offer the industry tax breaks and encourage the sale of ever-cheaper alcohol, we are lagging behind other countries in the measures we are taking to reduce alcohol harm.

While we offer the industry tax breaks and encourage the sale of ever-cheaper alcohol, we are lagging behind other countries in the measures we are taking to reduce alcohol harm.

Yet the Government has an opportunity to change that.

Sensible taxation and other pricing measures can reduce harm and save lives. Modelling suggests that raising alcohol duty above inflation for five successive years would reduce alcohol-related deaths by 5%, saving over 600 lives each year.

The Government will soon be reviewing alcohol duty following Brexit, and will at that point have an opportunity change tack and increase duty above inflation, addressing the harm caused by cheap alcohol and providing vital funds to support a struggling NHS and specialist alcohol treatment services.

If the Government were really serious about health, they could also introduce minimum unit pricing. With both Scotland and Wales having now introduced the measure, the way is paved for the whole UK to follow and tackle the cheap, strong alcohol that is the greatest driver of alcohol harm.

Alcohol harm is not inevitable. With the right measures in place, we can dramatically reduce it. We hope that the Government will soon be ready to put the health of people in the UK ahead of industry profits.