Stephen Gilbert
Main Page: Stephen Gilbert (Liberal Democrat - St Austell and Newquay)Department Debates - View all Stephen Gilbert's debates with the Home Office
(13 years, 3 months ago)
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Stephen Gilbert (St Austell and Newquay) (LD)
I am conscious of the time, so I will not delay hon. Members by going through some of the statistics on the type of harm that alcohol is causing in my constituency—they are firmly on the record. That is particularly the case in Newquay, where many people go to have a very good time—often too much of a good time. I should put an interest on record. Like many hon. Members, I enjoy a drink from time to time, and I also have a brewery in my constituency in St Austell.
For the Minister’s benefit, I want to touch on one of the potentially unintended effects of the duty plus VAT regime that the Government are introducing. When the Minister introduced the policy, he said that it was “an important first step.” I agree with that, but it is also a very tentative step. In fact, in certain circumstances, industry representatives have said to me that the policy could make the price of alcohol lower in some retail establishments. As has been mentioned by other hon. Friends, the proposal does not factor in any sense of the cost of production. Retailers and wholesalers, neither of which will be taking any margin, could end up paying the duty plus VAT and reducing the cost as part of a marketing exercise—brand awareness—and an attempt to drive footfall.
Just before Christmas, if someone had £20 and went into a store with a promotion on, they might have been able to get three 15 packs of beer or cider—about 45 cans. Under the Government’s proposals, supermarkets can legitimately charge £20 for 52 cans of lager or a staggering 107 cans of cider. That is a great offer for someone who likes that kind of thing. The proposals mean that, for £20, someone could buy enough cider to meet their recommended daily alcohol consumption for three months—107 cans of cider is equivalent to 246 units.
Stephen Gilbert
I will not give way. I know my hon. Friend wants to get in, so I will try to rattle through the points that I want to make.
Potentially, under a duty plus VAT arrangement, the following could be purchased for £20: not 45 cans of beer but 52; not 45 cans of cider but 107; not six bottles of wine but 10, and almost two bottles of spirits.
As has been mentioned, the policy does not factor in costs of production and is a very tentative step forward. There is a big discrepancy between the price of beer and the price of cider. We have to consider whether the Treasury is taxing those products equally. If we consider beer, at 4.2% alcohol by volume, the duty per unit is 17p; for cider, at 4.5% ABV, it is 7p per unit. Beer tax has increased by 50% over seven years and the gap between beer and cider tax widens every year. The Treasury is estimated to be losing £400 million a year. I shall now sit down, so that my hon. Friend can make her contribution.