Alcohol Duties

Tuesday 2nd November 2021 Lords Chamber

Question

15:06

Asked by

[Lord Brooke of Alverthorpe]

To ask Her Majesty’s Government what assessment they have made of the impact that the changes to alcohol duties announced in the Budget statement on 27 October will have on alcohol-related (1) hospital admissions, and (2) deaths.

[The Parliamentary Under-Secretary of State, Department of Health and Social Care (Lord Kamall) (Con)]

The reform of alcohol duties will simplify duty rules and tax drinks in proportion to their alcohol content. This should create a financial incentive for manufacturers to reformulate their products, therefore giving consumers a greater choice of lower-strength products. This would support individuals to drink within the Chief Medical Officer’s guidelines. The Office for Health Improvement and Disparities plans to make an assessment of the potential impact of these proposals on consumption and associated harms.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, I regret that the Minister has not actually answered the Question. All the evidence indicates that if the price of alcohol goes up, people drink less and are healthier. If the price of alcohol goes down or the duty goes down, people in fact drink more. More people go into hospital and more people die. Instead of relying on the industry to decide whether manufacturers will reformulate their drinks, as the Minister just indicated, the Government should take a firm lead and put the health of the nation first. They should not be handing out a £3 billion cut in this way. Will the Minister please go back to the Chancellor and tell him that we need a policy that will lead to better health, not worse?

[Lord Kamall (Con)]

Many public health officials, for many years, have criticised the system of alcohol taxation, particularly the EU’s system of taxation. Now that we have left the EU, we are free to set our own law in this area. Given the criticisms from the World Health Organization and many other think tanks, we can now set taxation based on the volume of alcohol.

[Baroness Hayter of Kentish Town (Lab)]

My Lords, I welcome that the duty will be related to the strength of alcohol. However, the Budget included a dozen references to wine, just as the Government were boasting that the biggest benefit of the New Zealand trade deal was cheaper New Zealand wine. This duty freeze, as we have heard, will cost £3 billion to the Exchequer over five years—money that could have been used for treatment services and for public health, since we know that deaths and illnesses will go up. It seems to me that the Government have an alcohol problem. They are scared to increase prices for the sake of all our health and are uncaring about the problems that this measure brings in its wake. Can this Health Minister go to his colleagues in the Treasury and try to educate them as to what they should be doing?

[Lord Kamall (Con)]

The noble Baroness is being a little unfair in her comments. These reforms were based on the advice of many public health officials, including the World Health Organization as well as a number of think tanks, which said that it was about time that we linked taxation to the volume of alcohol in drinks in the hope that we can encourage and incentivise manufacturers to lower alcohol content and to produce more low-alcohol and alcohol-free drinks. I am not sure whether noble Lords would accept such reformulated drinks, but it is important that we push this from a public health perspective.

[Baroness Randerson (LD)]

My Lords, real-term cuts in the price of alcohol send the wrong message also about drink-driving. We have one of the highest drink-drive limits in the world, set more than 50 years ago and well out of date. Around 2,000 people are killed and seriously injured on the roads every year, and that figure rose by 8% in 2019 alone. The British attitudes survey reveals that 77% of people support lower limits. Do the Government intend to catch up with the rest of the world and adopt this popular policy, saving lives on the road?

[Lord Kamall (Con)]

Noble Lords will know that alcohol-related deaths are not due purely to sclerosis of the liver and other direct impacts; we also know that alcohol plays a large role in, for example, drownings, 30% of which have some alcohol connection. We know that a number of murders and cases of domestic abuse are also connected to alcohol. The most important thing is to try to incentivise drinkers to drink low-alcohol or no-alcohol products in the hope that we can do that. This is why we have reformed the taxation system in a way that is linked to the volume of alcohol in drinks.

[Lord Smith of Hindhead (Con)]

My Lords, I refer to my interests as set out in the register. While the duty freeze and 5% cut on duty on draft beer was welcomed by the industry, in reality prices that consumers will experience are likely only to increase due to production and distribution costs. I do not think that measures in the Budget will lead to overconsumption since, in the highly unlikely event of the duty cut being passed on, a person would need to drink 183 pints before they got a free one. Does my noble friend the Minister agree that we should encourage people to go out, have a couple a modest drinks if they want to, support our fantastic hospitality industry and enjoy themselves?

[Lord Kamall (Con)]

The noble Lord makes an important point in looking at the various factors that have to be balanced up. Clearly, we want to encourage consumers or drinkers to move towards low-alcohol and no-alcohol products, while balancing that against the wider economic climate and the hard two years that the hospitality sector has faced, which is why we announced the freeze to some alcohol duties. On encouraging people to go out and drink alcohol, I am afraid I am the wrong person, because I am teetotal.

[Baroness Finlay of Llandaff (CB)]

My Lords, I declare my interest, having chaired the Commission on Alcohol Harm. Our report published last year cited the data, then 10 years old, which showed that the cost from alcohol to the NHS was £3.5 billion a year, while the Home Office’s own estimates were that the cost to society was £21 billion a year. In the decade since then, the number of alcohol-related hospital admissions has risen by 19%, and there has been a rise, too, in alcohol-related hospital admissions and deaths, which increased by 20% last year alone. Given the rising cost to the NHS, what contingency plans have the Government made should this drop in duty fail to decrease alcohol harms, and what other methods do the Government plan to use to decrease alcohol consumption?

[Lord Kamall (Con)]

The Office for Health Improvement and Disparities, as well as many other bodies, will continue constantly to review the impact of this change in taxation. In addition, the Government remain committed to supporting those who are most vulnerable and most at risk from alcohol misuse. Alcohol is a cross-cutting issue affecting several government departments. A strong programme of work is under way to address alcohol-related harms and their impact on life chances, including an ambitious programme to establish specialist alcohol care teams in hospitals and support for children of alcohol-dependent parents. There are a number of other alcohol harm reduction strategies that are too numerous to list now, but I am happy to write to the noble Baroness.

[Baroness Merron (Lab)]

My Lords, alcohol-misuse experts have warned that the Government’s reforms of alcohol taxes are undermined by their failure to address the issue that alcohol from high-strength beverages may remain cheaper, in many cases, because the price per unit of alcohol is lower in many of those high-strength beverages. What plans do the Government have to introduce minimum alcohol pricing? Does the Minister share my concern that the Chancellor, in the Budget, appeared to be investing more in Prosecco than in the public health budgets that we need to see to cover the cost to society of alcohol harm.

[Lord Kamall (Con)]

The World Health Organization and a number of other organisations have criticised the current system of taxation of alcohol, and urged the Government—and the EU when we were a member of it—to move toward taxation based upon the volume of alcohol. To answer the noble Baroness’s specific question, there are no current plans to implement minimum unit pricing in England, but the Government continue to monitor the impact of minimum unit pricing as evidence emerges from Scotland and Wales. It has been in place in Scotland for more than three years, and the Scottish Parliament will not consider its extension until April 2024. In all my conversations with various public health experts, one of the things that they make quite clear is that this has to be evidence-led, and we want to look at evidence from elsewhere.

[Baroness McIntosh of Pickering (Con)]

I declare my interest as chairman of the PASS Proof of Age Standards Board. I also chaired the Select Committee on the Licensing Act 2003. Does the Minister agree with the Committee when it said:

“It is in our view unarguable that an increase in the price of alcohol will decrease consumption.”?


Does he further agree that, by increasing the taxation on stronger alcohol as the Budget aims to do, that will have a better chance of reducing alcohol intake and dependency than the minimum unit pricing that we have seen in Scotland?

[Lord Kamall (Con)]

I thank my noble friend for that very important point. This is why the new system of taxation has been introduced. It will more directly align the volume of alcohol with the taxation on it. That will feed through to higher prices for drinks with higher alcohol content.