From the quality of the sleep we’re getting, to our relationships with those we love, alcohol is harming our health and wellbeing on a daily basis. Each year, thousands of people experience long-term health problems as a result of the alcohol they drink, or die from alcohol-related causes.
Alcohol harm costs UK society more than £33 billion each year, yet only a fraction of this cost is covered by the alcohol industry through duty. The Autumn Budget 2024 and Spending Review offer an opportunity for change, with both immediate and longer-term benefits.
Earlier today [30 August 2024], HM Revenue & Customs released an Alcohol Bulletin, providing quarterly Alcohol Duty receipts, clearances, and production statistics. Alcohol Duty is paid directly by producers and not by pubs or consumers. The provisional total for Alcohol Duty receipts between May and July 2024 is £3,197 million. This is £131 million (4%) lower compared to the same period last year.
The variation across product categories is clear. When compared to the same period last year, the provisional total for Alcohol Duty receipts from:
- Wine and other fermented products is £32 million (2.9%) higher
- Spirits is £159 million (14%) lower
- Beer is £18 million (2%) lower
- Cider is £14 million (23%) higher
HM Revenue and Customs conclude that the overall dip is not directly due to duty:
“the decreases in Alcohol Duty receipts from spirits and beer noted above are due to a return to normal trader behaviour this year. In the same period last year, traders were clearing more alcohol than normal ahead of the change to the duty structure which was introduced in August 2023.”
In August 2023, changes to the duty structure made duty across different drinks more consistent by taxing based on strength (ABV). The change also increased duty in line with inflation, until this was frozen in the Spring Budget 2024. The Government has estimated this freeze to cost the Treasury £1.7 billion between 2024-29.
According to the HMRC, alcohol duties raised £12.6 billion in 2023-24. Although this may seem like a significant amount, the money raised by Alcohol Duty truly pales in comparison to the massive costs linked to the harm caused by alcohol in the UK, including health, crime and productivity. But the human costs are far greater with alcohol deaths at an all-time high, representing far too many lives cut short and families left grieving.
Commenting on the latest statistics, Dr Richard Piper, CEO of Alcohol Change UK, said:
“The cost of alcohol harm is staggering and the Alcohol Duty receipts are woefully low and go nowhere near covering the significant human and economic costs of alcohol harm. Increasing Alcohol Duty at 2% above inflation in the Autumn Budget would be a win-win: bringing in up to £2 billion, while helping our NHS, alongside other effective preventative measures to stop alcohol harm before it happens.”
HM Treasury is currently accepting written submissions commenting on government policy and suggesting new ideas to be considered in the upcoming Autumn Budget 2024 which will take place on Wednesday, 30 October 2024. Alcohol Change UK will be responding.
Given the unprecedented financial issues facing the new government, we have chosen to focus our response on increasing Alcohol Duty. This is a solution that will both raise money in the short-term and decrease costs to the Treasury in the longer-term. In line with the new government’s health mission, increasing Alcohol Duty will contribute to the aims of the budget by:
- Reducing alcohol consumption, the subsequent problems we all face, and save lives
- Reducing the cost of alcohol harm
- Helping the government make immediate savings
