Health: Duties on Food and Drink

Lord Brooke of Alverthorpe Excerpts

Monday 6th March 2017 Lords Chamber

Asked by

[Lord Brooke of Alverthorpe]

To ask Her Majesty’s Government whether they intend to include, within the recently announced review of VAT, a consideration of the levels of customs and excise duties applied to those drinks and foods which research suggests are most responsible for avoidable deaths and chronic illnesses; and if so, whether they have any plans to hypothecate the yield to the National Health Service.

[The Commercial Secretary to the Treasury (Baroness Neville-Rolfe) (Con)]

My Lords, the OTS’s current VAT simplification review will not consider these issues. The review is focused on identifying opportunities for simplification of the VAT system and establishing whether the system is working to minimise tax compliance burdens. The Government have, however, gone to great lengths to promote healthy eating, drinking and lifestyles. We have announced a new soft drinks industry levy and a sugar reduction programme to help address childhood obesity.

[Lord Brooke of Alverthorpe (Lab)]

My Lords, I am grateful to the Minister for her reply, but disappointed. I wonder whether she might be persuaded to reflect on the need for a further examination of the subject. Does she agree that Brexit provides the opportunity for us to look at VAT, customs and excise duty, and a whole range of taxes in a much more flexible way than we have been able to when linked to Europe? Does she agree that we have a major problem with the costs that alcohol is causing to the NHS, and that one way we might change that is by persuading people to move from high-strength to lower-strength drinks, and that now we have this flexibility coming there is a strong case for trying to effect such a change?

[Baroness Neville-Rolfe]

My Lords, I have some sympathy with the point the noble Lord makes. The Government believe that alcohol duties should be related to the alcoholic strength of drinks but, as he says, EU law currently restricts changes to the rates and structure of alcohol duties. We have already said that we would like any future changes to allow duty on wine to rise in line with alcoholic strength. We are constrained until we leave the EU but we will certainly consider this issue carefully in the light of EU exit.