Alcohol duty rates on non-draught products will increase in line with RPI (the retail price index) from February next year, the chancellor announced in her autumn budget, a move that has been welcomed by alcohol health campaigners.
‘After years of real terms cuts, today’s announcement that alcohol duty will keep pace with inflation is a step in the right direction,’ said Alcohol Change UK CEO Dr Richard Piper. ‘This will see the country’s total alcohol duty receipts reach £15.9bn per year by 2029/2030. Yet this is still less than half of the cost of alcohol-related harm in the UK, currently estimated to be at least £33bn each year. This gap needs closing.’
The move was an ‘important moment for public health,’ added Alcohol Health Alliance chair Professor Sir Ian Gilmore. ‘The bulk of alcohol-related harm comes from cheap supermarket drink – this decision will help to reduce harmful off-trade consumption, reduce pressure on the NHS and boost the economy, while supporting the hospitality sector. Raising alcohol duty is a proven step toward reducing the significant harm alcohol causes in our society.
After years of government inaction and repeated freezes or cuts to alcohol duty, this increase is not only a necessary measure in light of rising alcohol-related deaths, but also signals a shift toward prioritising health over industry interests, protecting the most vulnerable, and mitigating preventable harm.’ The money raised should be put towards frontline NHS and alcohol treatment services which remain unequipped to deal with the number of people in need, he added.
Draught duty will decrease by 1.7 per cent, however – the equivalent of a penny reduction in the price of a pint served in the pub. The budget also included a flat-rate tax of £2.20 per 10ml bottle of vape liquid, to be introduced in two years’ time along with a one-off increase in tobacco tax to retain the price differential with vaping and incentivise people to switch.
‘Continued tobacco tax rises are necessary to encourage smokers to quit and reduce the burden of smoking on public finances and the economy in the future,’ said ASH chief executive Hazel Cheeseman.
‘The vape tax aligns with recommendations we made to government regarding the importance of an excise tax and the necessity of it being a flat rate. An excise tax on vapes will reduce access to cheap products for children by both reducing affordability and creating more powers to tackle illegal imports. The one-off additional rise in tobacco tax alongside the new vape tax is vital to maintain the price difference and the incentive for smokers to switch to the less harmful products.’
The charity is also calling for a levy on tobacco companies, as the impact of these tax rises will be felt by consumers rather than the tobacco industry. ‘The chancellor could have raised an additional £700m through a levy structured to reduce their profitability and cap their prices,’ she stated.