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Alcohol Duty Escalator Scrapped

Government “has turned its back on public health”


David Cameron - 2012:

"We can't go on like this. We have to tackle the scourge of violence caused by binge drinking … and that means coming down hard on cheap alcohol."

Chancellor, George Osborne, effectively read the last rites over the Government’s National Alcohol Strategy when he bowed to an intensive lobbying campaign by the alcohol industry and abolished the Alcohol Duty Escalator in his 2014 Budget. For good measure, the Chancellor also reduced the duty on beer and froze it on spirits and ordinary cider.

The Escalator, first introduced by the Labour Government in 2008, required alcohol duties to rise 2% above inflation, automatically, each year. It was seen, at the time and subsequently, as the key measure to reduce the burden of alcohol harm, and there is evidence to suggest that, over time, the Escalator was helping to reduce the number of deaths related to alcohol.

The Escalator’s abolition was greeted with delight by representatives of the alcohol industry and with dismay by the public health community.

Reacting to the announcement, Katherine Brown, Director of the Institute of Alcohol Studies, described the decision to scrap the Escalator as ‘staggering’, saying that it indicated the Government had turned its back on public health. She continued: “With alcohol costing the country £21 billion a year, and alcohol-related hospital admissions more than doubling over the last ten years, it comes as a shock to learn that the Chancellor believes that it is right to incentivize drinking further by making alcohol cheaper.”

Having also reneged on its pledge to introduce Minimum Unit Pricing of alcohol, also opposed by powerful sections of the alcohol industry, the Coalition Government is now in direct conflict with virtually the entire public health community, including, it seems, its own Department of Health. On the basis of the evidence available, the Department, like the rest of the public health community, and like the Prime Minister formerly, regards price controls as a key policy lever to tackle the health and social harm from alcohol and the huge burden it places on the public purse. At the time of going to print the Department of Health website still includes a section “Making cheap alcohol less available”, which continues:

“Too much alcohol is sold at irresponsibly low prices. Increasing the price of the cheapest drinks reduces demand from the heaviest drinkers, which in turn leads to a reduction in harm. To make it more expensive to drink excessively, we are considering introducing a minimum price per unit of alcohol. We have recently carried out a consultation to get people’s views on a minimum level of 45p per unit. We have also carried out a consultation on banning special offers (for example 2-for-1) on alcohol in shops. We will now decide on what the minimum unit price should be and whether we should ban special offers.”

There is no reference to these policies having been abandoned.

The Government has provided no justification for its rejection of price controls, despite minimum pricing of alcohol originally being presented as the central plank of its national alcohol strategy. In his Budget speech, Chancellor Osborne made only the slightest reference to the health and social costs of alcohol consumption, and no alternative policies for tackling alcohol harm, of equal effectiveness to price controls, are available. Osborne did refer to the ban on ‘below cost’ sales, but the overwhelming consensus is that this is a cosmetic measure, which will have negligible practical effect.

Prior to the Budget, the public health community had attempted to counteract the alcohol industry campaign. The Alcohol Health Alliance wrote to George Osborne urging him to stand firm and maintain the Duty Escalator. Key points mentioned in the letter included:

The alcohol duty escalator was appropriate and fair, and maintaining an upward trend in alcohol duties would be beneficial to the economy, society and public health.

The cost of alcohol harm in the UK is estimated to exceed £21bn each year, which is more than double the total revenues collected from alcohol duties (£10bn).

Reducing the affordability of alcohol is internationally recognised as one of the most effective ways of addressing alcohol harm.

Alcohol is 61% more affordable than it was in 1980, and in the UK alcohol affordability has increased significantly more than most other EU countries in recent years.

Ending the duty escalator would further weaken the ban on below cost sales.

UK wine and spirits consumption is at record levels, and among young women aged 16-24 the proportion of spirits drinkers is now larger than any other demographic group.

Professor Sir Ian Gilmore, Chair of the Alcohol Health Alliance and the Royal College of Physicians (RCP) special adviser on alcohol said:

“To suggest scrapping the duty escalator at a time when current levels of alcohol tax revenue do not even meet half the cost of alcohol related harm to our society is deplorable. Parliament has been absolutely right to support the duty escalator since 2008 – it has played an important role in addressing the affordability of cheap alcohol that creates an enormous burden on society. Government needs to stand strong on this issue – the taxpayer is already paying too much to foot the bill of alcohol related harm, now is not the time to scrap the alcohol duty escalator. Society simply cannot afford it.”

George Osborne’s complete dismissal of these considerations leaves the public health community in the position of having to accept the fact that, much rhetoric from the Prime Minister and earlier promises notwithstanding, reducing the harm from alcohol, recognised to be one of the major public health challenges of our time, is now a lost cause so long as the Coalition Government remains in power.