Higher alcohol taxes would be a bitter price to pay

By Benjamin Elks


At the end of October, the Campaign for Real Ale (CAMRA) released the 50th edition of their annual Good Beer Guide (GBG). The guide is packed with recommendations for finding a tasty pint in a pub near you. 


But sadly, a lot has changed in the last fifty years since the GBG was first published; not least the price of a humble beer. As we’ve previously observed, the average pint in 1952 cost just 6 pence. By 1972, this was up to around 18 pence which, adjusted for inflation, is around £1.70 in today's money. 


With the average price of one of the nation’s favourite tipples now over £4, many would argue that we’re paying enough as is. Chancellor Jeremy Hunt, however, takes a different view. The government is planning to hike beer duty by seven pence on the pint, overturning the planned booze duty freeze and hammering pub-goers further in a cost of living crisis.


Sadly, for some people, even this isn’t enough though! 


Last week, the Alcohol Health Alliance UK (yep, we’d never heard of them either), used an open letter to Rishi Sunak to demand a review into taxes to “reduce the affordability, promotion and availability of alcohol.” Readers will recall this wheeze as the same used by other groups when arguing for a new tax on sugar. Using the sugar tax as a model should be a red flag in and of itself, given the scant evidence that it has had any impact on obesity.


Naturally, TPA staff were having none of it, and our chief executive, John O’Connell, rightly slammed this piece of nannying nonsense: “With costs rising, Brits cannot be expected to pay even more tax on the price of a pint. Further hikes in booze duties would only hammer the households who are hardest up, while doing little to dissuade problem drinkers.


Not only would these calls be damaging to the budgets of Brits enjoying the odd pint of bitter, the existing increases to alcohol duty will hit pubs and restaurants still struggling with the effects of the covid lockdowns. 


Using our dynamic tax model, TPA research has shown that planned increases will cost £450 million in lost investment and hit overall economic growth by nearly £2 billion over the next ten years, hurting hospitality at the worst possible time. We can assume that places selling alcohol would bear the brunt of this, meaning more pain for pubs and restaurants. 


Politicians would be wise to avoid the calls of these anti-alcohol activists. During a cost of living crisis, ministers would struggle to explain why they were pumping up the price of our pints. The chancellor should stand with the millions of taxpayers who enjoy the odd tipple and honour the previous promise to freeze and simplify alcohol duties.

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