Asked by: Matt Vickers (Conservative - Stockton South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent estimate the Government has made of the relative cost of production for (a) wine, (b) beer, (c) cider and (d) spirits.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The Treasury considers production costs complex to estimate, as different businesses will have different business models, impacting production costs. Officials have received data from some stakeholders who have chosen to share this information, however given the commercial sensitivity of it, the Government is not in a position to share it publicly.
A consultation on the alcohol duty review ran from 27 October to 30 January, and the Treasury is now in the process of analysing responses. We will continue to monitor the economic impact of our reforms, and welcome feedback from stakeholders on this point.
Asked by: David Linden (Scottish National Party - Glasgow East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what comparative assessment he has made of the potential implications for his policies of the way his Department's plans to tax alcohol by product strength with the guidance of the Chief Medical Officer which does not make a distinction in how units of alcohol are consumed in respect of responsible drinking.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The Government intends to move to a new progressive system of duty that taxes all products in reference to the litres of pure alcohol they contain, with products with higher concentration of alcohol paying a higher rate of duty per unit. As part of this approach, the Government is cutting duty on lower ABV spirits-based drinks, such as pre-packaged gin and tonics, and is increasing duty on higher ABV products, such as strong ‘white’ cider and fortified wine.The Government received evidence supporting this approach during its call for evidence held in 2020. As set out in the summary of responses published in October 2021, public health groups cited the correlation between cheap, high strength spirits (such as vodka) and alcohol-related harms, as the volume of drink needed to reach intoxication is smaller with higher strength drinks. The Government is therefore addressing these concerns.
Asked by: David Linden (Scottish National Party - Glasgow East)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential implications for his policies that a 4 per cent alcohol by volume pint of beer or cider contains more alcohol than a Scotch Whisky cocktail but raises less duty under his Department's reform proposals; and if he will make a statement.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The Government intends to move to a new progressive system of duty that taxes all products in reference to the litres of pure alcohol they contain, with products with higher concentration of alcohol paying a higher rate of duty per unit. As part of this approach, the Government is cutting duty on lower ABV spirits-based drinks, such as pre-packaged gin and tonics, and is increasing duty on higher ABV products, such as strong ‘white’ cider and fortified wine.The Government received evidence supporting this approach during its call for evidence held in 2020. As set out in the summary of responses published in October 2021, public health groups cited the correlation between cheap, high strength spirits (such as vodka) and alcohol-related harms, as the volume of drink needed to reach intoxication is smaller with higher strength drinks. The Government is therefore addressing these concerns.
Asked by: Christian Wakeford (Labour - Bury South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the different costs of production between cider and beer.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The Treasury considers production costs complex to estimate, as different businesses will have different business models, impacting production costs. Officials have received data from some brewers and cidermakers who have chosen to share this information, however given the commercial sensitivity of it, the Government is not in a position to share it publicly.
A consultation on the alcohol duty review ran from 27 October to 30 January, and the Treasury is now in the process of analysing responses. We will continue to monitor the economic impact of our reforms, and welcome feedback from stakeholders on this point.
Asked by: Christian Wakeford (Labour - Bury South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the potential merits of equalising cider and beer duty to improve public health.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The Government has considered the merits of equalising beer and cider duty as part of its alcohol duty review, both from a public health and revenue raising perspective.
However, while public health remains an important focus of our review, this must be balanced against the need to support businesses and, given the cider industry has been in consistent decline over the past decade, the Government has decided not to equalise cider with other categories.
Asked by: Christian Wakeford (Labour - Bury South)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the effect on revenue of equalising cider and beer duty as part of the alcohol duty system changes.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The Government has considered the merits of equalising beer and cider duty as part of its alcohol duty review, both from a public health and revenue raising perspective.
However, while public health remains an important focus of our review, this must be balanced against the need to support businesses and, given the cider industry has been in consistent decline over the past decade, the Government has decided not to equalise cider with other categories.
Asked by: Bill Wiggin (Conservative - North Herefordshire)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent estimate the Government has made of the relative average cost of production of (a) wine, (b) beer, (c) cider and (d) spirits; and if he will make a statement.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The Treasury considers production costs complex to estimate and, as different businesses will have different business models, costs will vary between individual producers. Officials have received data from some stakeholders who have chosen to share this information, however given the commercial sensitivity of it, the Government is not in a position to share it publicly.
A consultation on the alcohol duty review ran from 27 October to 30 January, and the Treasury is now analysing the responses. The Government will continue to monitor the economic impact of our reforms, and welcome feedback from stakeholders on this point.
Asked by: Munira Wilson (Liberal Democrat - Twickenham)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment his Department has made of the potential impact of lowered VAT on (a) beer, (b) cider and (c) other alcoholic beverages will have on rates of harmful drinking among (i) young people and (ii) other age groups in the UK.
Answered by Lucy Frazer - Secretary of State for Culture, Media and Sport
VAT is a tax on consumption. The standard rate of 20 per cent applies to most goods and services, including alcoholic beverages such as beer and cider. The Government has no plans to review this VAT treatment.Asked by: Wendy Chamberlain (Liberal Democrat - North East Fife)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what assessment he has made of the impact of (a) Scotch Whisky distilleries and (b) reforms to alcohol taxation that widens the differential between spirits and categories such as beer and cider on (i) employment opportunities and (ii) local economies.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The Government has announced several changes to alcohol duty that will support the Scotch Whisky sector. At the Budget, spirits duty was frozen, making freezes continuous since 2017. As part of our alcohol duty review, the Government intends to move to a system where all products are taxed in reference to the litres of pure alcohol they contain, making the taxation of other products more consistent with Scotch. Above 8.5% ABV there is to be no differentiation between product categories, providing a more level playing field between spirits and other products. These changes will narrow the difference between Scotch, wines and high-strength ciders.
The Government is continuing to engage with interested stakeholders on these reforms. A consultation ran from 27 October 2021 to 30 January 2022, and the Government is now analysing the responses. A tax information and impact note will be published following the consultation when the policy is final, or near final, in the usual way.
Asked by: Neil Coyle (Labour - Bermondsey and Old Southwark)
Question to the HM Treasury:
To ask the Chancellor of the Exchequer, what recent discussions his Department has had with the Department for Business, Energy and Industrial Strategy on the impact of the proposed alcohol duty reforms on wine businesses and consumers, as compared to beer or cider drinkers.
Answered by Helen Whately - Minister of State (Department of Health and Social Care)
The Government believes that the reforms announced at Autumn Budget 2021 will achieve a duty system that is simpler, fairer and better supports public health in the round.
There will be one duty band for all products between 8.5%-22% ABV based on their alcohol content. This simplifies the existing system by eliminating the different duty rates for still wines, sparkling wines, spirit-based liqueurs and stronger beers, and replacing them with a single rate.
In principle, the Government considers it is right to tax higher strength products a higher rate of duty per unit. Introducing one basic rate per litre of pure alcohol would fail to target higher strength products. As set out in the summary of responses published in October 2021, public health groups and economists have cited a link between cheap, high strength spirits (such as vodka) and alcohol-related harms, as the volume of drink needed to reach intoxication is smaller with higher strength drinks.
The Treasury is continuing to engage with other Government departments and interested stakeholders on these reforms. A consultation ran from 27 October 2021 to 30 January 2022, and the Treasury is now analysing the responses. Further updates will be provided in due course.