Asked by
To ask His Majesty’s Government whether they have any plans to
increase the top rate of the new alcohol duty bands, forecasted
to take effect from August 2023.
The Parliamentary Secretary, HM Treasury () (Con)
We aim to keep alcohol duty rates under review during the yearly
budget process and to balance the impact on businesses with
public health objectives. In December we announced that the
freeze to UK alcohol duty rates had been extended for six months,
to 1 August 2023, providing businesses with certainty and
aligning with the implementation date for our historic alcohol
duty reforms. The Chancellor will reserve his decision on future
duty rates for the Spring Budget 2023.
(Lab)
My Lords, I am grateful to the Minister for her reply but she
seems to have missed the Question; the Question is about the top
band, and she made no mention at all of that. The reality is that
a new system is coming in, which I generally welcome, that will
actually yield less tax to the Government—which is a surprise,
given that we cannot pay nurses enough but are not taking the
taxes that we should be. We should be increasing taxes there, not
reducing them, which is the case with the top band; in relative
terms, it is going down. Would the Government please review this,
and change it and increase it, so that alcohol such as vodka is
taxed at a higher level than is presently proposed?
(Con)
My Lords, the Answer that the Chancellor will reserve his
decision on future duty rates applies to all bands. I take the
noble Lord’s point, but the reforms that we announced in the
alcohol duty bands are broadly cost-neutral, and they make an
important move to taxing all alcohol by strength rather than the
fragmented system that we had before. That is an approach that
has public health at its heart, and I hope it will be welcomed.
(CB)
My Lords, given that alcohol deaths have risen by over 27% in
2021 compared with 2019, and that in the under-50s alcohol is a
leading risk factor for ill health and death, have the Government
costed what these changes being delayed are incurring as costs to
the nation in lost work, lost productivity and cost to the health
service? Will all those costs be considered in the review that
she has already spoken about in answer to the noble Lord, ?
(Con)
My Lords, as I have said, in keeping alcohol duty rates under
review we aim to balance the impact on businesses with public
health objectives. The reforms we have made to alcohol duty rates
are the biggest reforms that we have had in 140 years. It is
right that businesses have the time that they need to adjust to
those changes.
(Con)
Is my noble friend able to tell the House today what position the
Government have taken on the public health aspect of reducing
alcohol consumption between higher and variable rates of alcohol,
depending on the strength of the alcohol, as opposed to
minimum-unit pricing?
(Con)
My noble friend is right that the Government’s preferred approach
has been to reform alcohol duties and align them all based on the
strength of alcohol. As I have said to other noble Lords, that is
an approach that has public health at its heart.
(LD)
My Lords, alcohol has become 72% more affordable than it was 35
years ago. Increasing alcohol duties in line with inflation, as
was planned last October but cancelled last December, would bring
in approximately £1.4 billion annually. Would this not help to
pay for the costs to the NHS of alcohol-related harm, and for
people such as the nurses who have to treat people with
alcohol-related issues, including the many victims of
alcohol-related crime?
(Con)
My Lords, one of the big changes that we are making to alcohol
duties is to ensure that higher-strength alcohol is taxed at a
higher rate. This puts the points that the noble Lord makes at
the heart of our approach. The normal process is to review
alcohol duties on a yearly basis and take a decision in the
round, and that will continue.
(Lab Co-op)
My Lords, what discussions have the Treasury and the UK
Government had with the Scottish Government, who clearly have an
interest in this in relation to two aspects—one being
minimum-unit pricing, which has not had the desired effect that
the Scottish Government expected, and the other being their
consideration of implementing a tax on whisky producers in
Scotland to raise money to cover some of the expenditure of the
Scottish Government?
(Con)
My Lords, the Government have regular dialogue with the Scottish
Government—indeed, the Prime Minister is there today. I agree
with the noble Lord that the minimum-unit pricing approach has
not always had the desired effect. The UK Government’s position
is to address this through the level of duties, and relating that
to the strength of alcohol. That is the better approach, and one
that we can take now that we have left the EU.
(Con)
Can my noble friend the Minister tell us whether the Treasury, or
indeed any other government department, has done any modelling on
the effect of the new rates and whether they would lead or
incentivise drinkers to drink lower-alcohol drinks and reduce
their overall consumption of alcohol?
(Con)
My Lords, I am sure we have taken that into account in looking at
this work, and that we work closely with the Department of Health
and Social Care on it. Another aspect of the reforms we are
bringing forward is to provide draught relief to allow pubs and
other venues to be more competitive with off-licences and
supermarkets selling alcohol.
(Lab)
My Lords, I am sympathetic to the Minister answering this
Question: she is the victim of a bizarre system of government.
Surely this is at least 50% a health issue. The decision-making
should certainly rest within the Department of Health, and the
Chancellor of the Exchequer should not be deciding what sin and
health are about—he should be worried just about the Exchequer.
(Con)
I reassure the noble Lord that if he looks at the consultation we
did on the new duty rates, he will see that public health is at
the heart of our approach. However, we need to balance public
health objectives with, for example, the impact on businesses.
For instance, Scotch whisky is an incredibly important industry
in Scotland, and there are new breweries all across the country
which are big economic success stories. We need to have a balance
between those two approaches.
(LD)
My Lords, I am pleased that the Minister talked about business.
Leaving aside the level of taxation—I have sympathy with my noble
friend—this system is quite complicated. It is a sophisticated
solution but it also makes it complicated for businesses to
respond. So I ask that the Treasury, as well as looking at the
level of taxation, looks at the number of different levels of
taxation, because the more there are, the harder it is for small
and medium-sized businesses to administer.
(Con)
I appreciate the noble Lord’s point, but the reforms we have
introduced simplify, for example, the number of different bands
of duties that businesses pay. We have taken significant steps in
that direction, and this Government always seek to simplify
things for businesses where possible.
(CB)
Low-alcohol beers and spirits obviously have a lower duty, but
the price to consumers is often comparative or even higher than
that of other alcohols. What can the Government do to incentivise
lower prices for alcohol-free products, which can have
significant health benefits?
(Con)
The noble Lord is right to point to the fact that, under these
reforms, lower-alcohol products—regardless of the type of alcohol
product they are—will have a lower duty. That is a significant
incentive to people. I am not sure about the other drivers of the
higher prices that he referred to; that would have to be looked
at more carefully.
(Lab)
My Lords, alcohol misuse is one of the prime causes of domestic
violence of men against women. Surely increasing the duty should
be part of the overall package of trying to reduce that kind of
action; making alcohol more expensive might contribute to that
reduction.
(Con)
Through making higher-strength drinks subject to higher duty, we
are making alcohol more expensive in that way.
(Lab)
My Lords, surely it is about the proportion of the cost. I am not
clear that the noble Baroness has answered the Question. She has
repeatedly said that this is to allow businesses time to adjust.
I remember the days when the most eagerly awaited bit of any
Budget Statement was the announcement of duties on alcohol. As I
understand it, it was always then rushed through the House of
Commons that day so that the increases could come in overnight.
What is this period for businesses to adjust all about?
(Con)
My Lords, in addition to the annual level of the duties paid by
businesses, we are introducing the biggest reform to alcohol
duties in 140 years—for example, as I have said, by reducing the
number of bands operating by linking very clearly the level of
duty to the level of alcohol in a product. That is a significant
reform, and one that businesses need time to adjust to. That is
why we have aligned the introduction of the new duty rates with
the new system.
