Commenting on the freeze, Dr Richard Piper, CEO of Alcohol Change UK, said:
It is disappointing that the Government has chosen to freeze alcohol duty yet again, after making the positive choice to raise it in line with inflation last year. This is hugely short-sighted and takes no account of the shocking increases we’re seeing in alcohol-related deaths. This decision to subsidise alcohol producers is also damaging to the public purse. Cuts to alcohol duty cost the Treasury over £23.9 billion between 2013-2028, when compared with raising duty in line with inflation.
Cutting duty has two effects. First, it means other taxpayers have to contribute more to balance the books, while giving a subsidy to the already wealthy alcohol producers. That’s because alcohol duty is a tax only on alcohol producers and importers – not on the hospitality industry or on drinkers. But these incredibly wealthy companies should absolutely pay their way, with alcohol duty at least matching inflation.
Second, if alcohol producers use an alcohol duty cut to keep prices lower for consumers (which they may or may not) this will increase alcohol harm. Evidence from around the world shows that heavy drinkers are very price sensitive, so making alcohol even more affordable in real terms will increase alcohol harm all the more. Since 1987, alcohol has become 74% more affordable in the UK.[1]
Alcohol is the number one risk factor in death, ill-health and disability amongst the working age population and is directly linked to seven types of cancer, including breast and bowel cancer. More alcohol harm means lower economic growth due to ill health and under-employment.
The harm caused by alcohol has to be balanced against the impact on businesses and this balance is currently way off. We understand that the hospitality industry is also facing rising costs and recovering from the pandemic. But there are better ways to help the industry than cut alcohol duty. A recent poll by UK Hospitality and the Beer and Pub Association found that measures such as lower VAT, lower business rates multiplier, business rates reform were rated more highly than alcohol duty in terms of providing the most help to businesses. Duty rises can also actually help pubs and restaurants by reducing the price difference between pub and supermarket prices for example.
With alcohol-related deaths at an all-time high, with no signs of that falling back, we desperately need bold action from the Government to stop more lives being needlessly lost.
