Tel. +44 (0)20 7287 4414
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The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.
The Bruges Group spearheaded the intellectual battle to win a vote to leave the European Union and, above all, against the emergence of a centralised EU state.

Bruges Group Blog

Spearheading the intellectual battle against the EU. And for new thinking in international affairs.

Booze Boosts Budgets


The tax on alcohol has been raised by 10.1%; the reasons given are 'wider UK tax and public health objectives.'

It's mostly to do with the money: last year the Treasury raised £12.4 billion from alcohol duties. This compares with around £8 billion in the US, which has 5 times our population. Clearly the UK Government needs the cash and depends on drinkers' addiction: I don't know anybody who gave up booze because of rising costs.

However, the health and social drawbacks of alcohol are high: a 2016 study estimated the annual cost to the UK at 'between £27bn and £52bn.' In Scotland the poor were affected worst: around 40% of the harms arose from the 20% most deprived areas (see p.17 here.)

Two years later the Scottish Parliament introduced Minimum Unit Pricing (MUP) - at least 50p per unit of alcohol - and the BMJ estimated it reduced associated deaths by 13%. So there is a degree of price sensitivity in alcohol consumption, even if it doesn't drive boozers to quit altogether.

The British Government chose not to follow Scotland's lead. In Glasgow the MUP on 40% ABV whisky means that a litre must now cost at least £20, but south of the the border you can get Bell's for £16 from Amazon (comparison site accessed 2 August.) Perhaps HMG avoids MUP because it needs money now whereas the disbenefits lie partly in the future and are harder to quantify precisely. Besides, the Institute of Alcohol Studies estimated (2018) that the alcohol industry was worth £46 billion to the economy in 2014 and provides 770,000 UK jobs.

The arguments against the demon drink are better made in human rather than purely economic terms. This was illustrated when the Soviet Union collapsed. Russia abandoned centralised control in the early 1990s and crash-tested the free market model. Trade barriers were lowered and imported vodka helped reduce its real price by 77% just as the economic chaos and suffering among the common people drove them to drink even harder than they used to. The result was a huge spike in the death rate among working-age Russian men. Imagine the consequences in the UK if whisky was tax-free and so available at £4 a litre!

But price controls alone are not enough. Russians could turn to home-made hooch and more desperate alternatives such as after-shave, anti-freeze and lighter fluid. When the industry was more tightly regulated and non-beverage alcohol had to have denaturant added, the death rate fell back. A switch from spirits to beer among the younger set also helped. Total male alcohol consumption in Russia is now similar to that for the UK.

So far we have seen damage limitation via pricing, and intelligently-constructed and well-enforced legislation. The third leg of the stool is availability.

I live in suburban Birmingham. Within one mile of our house I can buy alcohol from several pubs and off-licenses (one open 24 hours), at least six supermarkets and a bevy of small shops and filling stations. All will take credit cards. It's a minefield for anyone who wants to stop drinking.

In 1911 the writer Jack London voted in favour of women's suffrage in California, surprising his wife who knew he was not a feminist. He explained to her that when women got the vote they would help bring in Prohibition, which was his only hope of getting free of alcoholism. It had taken twenty years of social drinking (he didn't particularly like the taste) for him to become hooked. By the time the 18th Amendment was passed it was too late for London, whose health had been fatally weakened; he died aged 40.

But the US's 14-year 'noble experiment' was a success. It did not ban the private brewing or drinking of alcohol; it merely removed all commercial incentives. Nationally, consumption decreased by an estimated 30 - 50%. As a result (so I have read) cirrhosis death rates for men dropped by two-thirds, and admissions to state mental hospitals for alcoholic psychosis halved. Surely there were other benefits - say for example reductions in domestic violence, child neglect and abuse,

Perhaps if our Government were not hooked on booze income it might decide to let the industry wither on the vine in favour of home-brewed beer.

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