Alcohol Taxation

Chloe Smith Excerpts

Wednesday 14th December 2011 Westminster Hall

[The Economic Secretary to the Treasury (Miss Chloe Smith)]

I congratulate my hon. Friend the Member for Totnes (Dr Wollaston) on securing the debate. I recognise that, as a general practitioner, she can draw on direct experience on dealing with the adverse effects of alcohol on health. I also acknowledge her reference to the contribution in The Daily Telegraph today from other professionals in the field.

I can assure all hon. Members who have spoken—it is a pleasure to hear so many—that not only GPs have such concerns about the effect of alcohol on the welfare and well-being of society; that concern is shared by the Government. It is clear that alcohol abuse causes serious harm to health and leads to considerable costs to the NHS and that many towns and cities are affected by alcohol-related violence and crime, as my hon. Friend has said. Like her, of course I abhor behaviour such as that in the example on which she finished her speech.

For all those reasons, the coalition Government are committed to tackling problem drinking across a range of fronts. I shall set out a few points on which action has already been taken. I shall try to do so quickly, to get on to minimum unit pricing, as my hon. Friend has requested. I will begin by trying to tackle a couple of points made by other hon. Members. Irresponsible drinkers, rather than responsible drinkers in pubs and other places of safety, are the problem.

I shall try to tackle a couple of the specific questions. If I do not do get there in time, I hope that my hon. Friend will forgive me if I write to her on a couple of points. With regard to measures that the Government have already taken, I hope that they will demonstrate and reassure her that the Government are committed to an evidence-based approach. I specifically reassure her of that today. It is, of course, a subject on which data speak clearly. It is a complex subject that requires much analysis of evidence.

I shall start that process with what the Government have done. My hon. Friend will know that the Treasury published the review of alcohol taxation in November 2010, which among other things identified a problem with so-called super-strength lagers, about which others have spoken today. The Government confirmed in the 2011 Budget that action would be taken to discourage consumption of those drinks, introducing two new additional duties, which should help. There are also targeted approaches on other types of drink—for example, a minimum juice content for products that qualify as cider. I note my hon. Friend’s point about ciders.

[Andrew Griffiths]

The Minister has clearly got up to speed quickly on her brief. With regard to cider, does she agree that it seems completely incongruous that the 4% duty paid on a pint of beer is twice that paid on cider—2%—at exactly the same strength?

[Miss Smith]

I am aware of that specific point, and I am sure that my hon. Friend and his colleagues will be even more aware of that tonight at the all-party parliamentary beer group’s Christmas party, if I have that correct. If he will forgive me, I will focus on minimum unit pricing in this debate, to deal with points raised by my hon. Friend the Member for Totnes. I shall briefly note that she raised the wider impacts of alcohol. Of course, it is not just the duty system that is important. I direct her to the Police Reform and Social Responsibility Act 2011, which I hope will help with the late-night economy. To make an important point, I direct her to a forthcoming paper from the Department of Health, which, with the Home Office, is responsible for this area, that will consider the wider social and health impacts of alcohol. I have no doubt that she will look at that in some detail.

[Guy Opperman]

A simple question: when assessing taxation in the alcohol strategy document, working with the Department of Health, will there be a difference in the views on taxing supermarket sales compared with the pubs that we all cherish and that are so affected by this?

[Miss Smith]

If my hon. Friend will allow me to come to that, I shall attempt now briefly to answer a number of the questions asked. First, as my hon. Friend the Member for Totnes explained, the Scottish Government have recently introduced a Bill that seeks to bring in a 45p per unit minimum price. She asked why this Government believe that that would be incompatible with EU law, when the Scottish Government do not. If I may quote the specific point: we believe that it could be incompatible with article 34 of the treaty of the functioning of the European Union. I should be delighted to go into more detail on that if she required. That is the position.

I should like to deal with the important point made by my hon. Friend the Member for Hexham (Guy Opperman). No one wishes to hit pubs unnecessarily. I take the examples about the behaviour of supermarkets that have been given. Like hon. Members, I am wary of those. If an indirect tax were introduced, it would be difficult to distinguish between points of sale. I am happy to come back to hon. Members in more detail on why that is difficult, but it is not as straightforward as saying that we want to hit supermarkets and not pubs; it is about how to set up an indirect tax.

On that note, as hon. Members will have heard in other debates, it is difficult to find ways to vary VAT on similar products. Again, I am happy to come back with more detail on that if required. On price distortion and perhaps distasteful practices at the border, the UK Government will look into that closely. My hon. Friend the Member for Totnes asked whether we will discuss matters with the Scottish Government. We will be watching the situation extremely closely in the service of seeing what works and what we can assess among these complex policy and legal issues.

I will go briefly to a couple of other questions that my hon. Friend asked me: have we received representations from public health representatives on the duty plus VAT measure? I regard that measure as a starting point, as a first step. She rightly notes that it introduces a principle and a starting point. Treasury officials are very closely involved in discussing such matters with the Department of Health and, as I have already mentioned, the Home Office, which is also responsible in part for alcohol. I hope that reassures her.

We have mentioned supermarkets. I shall briefly turn to whether a windfall profit tax could be introduced as a method of trying to tackle some of the harms. First, this is about evidence. It is questionable whether windfall profits are likely to arise, and therefore whether there would be something to tax, as a viable approach. That question rests on carefully analysing the evidence, policy and legal issues and what is possible.

Finally, I hope that I have set out that the Government have taken some action and made some starting points. The Government are keen to hear evidence on the matter and will observe carefully what is going on in Scotland and elsewhere.

Question put and agreed to.