Budget 2015: Alcohol Industry Profits at Expense of our NHS
Yesterday the Chancellor announced cuts to alcohol duties, with the price of beer to be cut by 1p on the pint
and duties on cider, Scotch whiskey and other spirits to be cut by 2%. Wine duties are to be frozen.
This decision is a slap in the face to our doctors, our nurses, our
paramedics and our police who are on the front line in paying for
this cut. Alcohol related harm costs the NHS £3.7 billion every
single year1, and annually we see over one million alcoholrelated hospital attendances.2 To cut tax on cider and spirits at a
time when the NHS is at breaking point is a disgrace. Our
frontline services can’t afford for alcohol to get any cheaper.
The costs of these tax breaks to the Treasury total £920 million.3
This is in addition to the £1.5 billion cost of abolishing the alcohol
duty escalator in last year’s budget.4
Reducing the affordability of cheap alcohol was a key
component of the Government’s Alcohol Strategy and is
recognized by the World Bank, OECD, World Health
Organisation and the European Commission as one of the most
effective ways of tackling alcohol harm. With alcohol
consumption and harm in the UK at historically high levels, it
comes as a shock to learn that drinking will be further
incentivised by making alcohol cheaper.
Costs to the public purse over the next
five years from cuts in the last two
successive budgets would pay for:
 The annual salaries of over 12,000
nurses
 Nearly 10.5 million emergency
ambulance call outs
 More than 10 million hospital bed
days
Of all alcohol sold, it is the very cheap products such as super strength white cider and spirits that play the
biggest part in driving alcohol related harm.5 Even at current levels, a can of Frosty Jack’s white cider can still
be sold for 16p under the ban on below cost sales. Another drop in duty will weaken this ban further and
result in the high strength products that are consumed by our children and harmful drinkers becoming even
cheaper.
With current levels of taxation recouping less than half of the £21billion that alcohol harm costs the British
economy every year6, it is the taxpayer who is footing the bill. Over three quarters of the public have said no
to further tax cuts on alcohol.7 It is time the Government started listening.
We are asking MPs to vote against the Chancellor’s proposed cuts to
alcohol duty
1
HM Government (2012) The government’s alcohol strategy. 2012
HM Government (2013) Reducing harmful drinking 2013. www.gov.uk/government/policies/reducing-harmful-drinking [Accessed 19 June 2014]
HM Government, (2015) Budget 2015
4
HM Government, (2014) Budget 2014
5
Institute of Alcohol Studies (2014) Use of alcohol as a loss-leader. Briefing paper
6
Office for National Statistics. HMRC TAX & NIC receipts 2013/14, December 2014
7
Alcohol Health Alliance (2014) Alcohol Behaviours and Attitudes Survey
2
3
What are we calling for?
1. Reinstate the duty escalator. Alcohol sold in the UK is 61% more affordable than it was in 1980. 8 We
know that price drives consumption; duty levels should continue to increase year on year, above
inflation and in line with disposable incomes, to counter the trend of increasing affordability that has
been associated with rising consumption and harm.
2. Increase duty on high strength cider. Cider and beer are similar products however cider is currently
taxed at a much lower rate than beer. The alcohol duty rate (duty + VAT) on a litre of cider 7.5% ABV
is 6p per unit of alcohol, compared to 23p per unit of alcohol for a litre of beer of the same strength.
We also know that the cheapness relative to alcohol strength makes high strength ciders such as
Frosty Jacks popular with dependent and young drinkers. Additional tax bands should be added to the
existing structure to allow higher strength ciders to be taxed at higher rates.
3. Ensure spirits are taxed at a higher rate than wine and beer. In comparison to beer and wine, spirits are
generally much cheaper to produce and distribute. The same rate of duty for all beverage types would
mean that distilled spirits could be sold much more cheaply than wine or beer, which is a public health
concern as they are much stronger and carry a greater risk of health and social harm.
4. Lobby for change at EU level to incentivise switching to lower alcohol wine. The structure of UK alcohol
taxes is governed by European Directives that mean under current structures, it is not possible to tax
wine or cider based on their strength, although changing the structure on cider duty, as outlined
under recommendation 2, to allow greater variation in tax levels is possible. This means that currently
there is no tax incentive at an EU level for wine and cider manufacturers to produce lower strength
products.
5. Implement a minimum unit price for all alcoholic products. Minimum unit pricing is an exquisitely
targeted policy that targets the cheaper, stronger drinks such as white cider, known to be consumed
by harmful and young drinkers. Minimum unit pricing and the alcohol duty escalator are
complimentary policies, and should be implemented together to have the greatest impact on tackling
high levels of alcohol related harm in the UK.
About the Alcohol Health Alliance
The Alcohol Health Alliance (AHA) is a coalition of more than 40 organisations who share an interest in
reducing the damage caused to health by alcohol misuse in the UK. Our members include medical bodies,
charities and alcohol health campaigners. For further information and/or to set up a meeting with an AHA
representative, please contact us: [email protected] / 0207 566 9809
8
HSCIC, Statistics on Alcohol, England 2014
Briefing