“While the consumption of alcohol has increased, taxation on spirits has declined in real terms and even more so as a fraction of average earnings.”
The Health Select Committee Report
Did you see what they did there?
They start the sentence talking about alcohol, then switch to how taxation on spirits has declined, hoping you won’t spot the change in subject mid-sentence.
The BMA adds:
“Studies have also reported that price increases have the effect of reducing rates of alcohol problems including alcohol-related violence and crime… As part of a range of measures to reduce alcohol misuse, it is essential that the level of excise paid on all alcoholic beverages is increased at higher than inflation rates and that this increase is proportionate to the amount of alcohol in the product.”
The implication here is that excise paid on alcohol is currently not being increased at a rate higher than inflation. The only problem with this is that if you don’t do that weasel thing by switching to talking about spirits, the price of alcohol is already increasing higher than inflation – and always has been:
The Report ignores this, and talks about how alcohol is becoming more affordable. How can this be true? Well, alcohol is becoming more affordable because average household income is increasing. Alcohol is becoming more affordable because everything is becoming more affordable.
But as alcohol prices have on average risen by 20% more than retail prices generally since 1980, alcohol is becoming more expensive versus other goods.
As income increases, and the cost of high ticket items such as household electricals falls, people can afford to spend a greater proportion of their increased income on discretionary items such as drink – 'affordability' in this case is not directly linked with the price of alcohol.
But should we still increase duty to offset this effect anyway? Well, how much duty increase do you want? Duty on beer increased tenfold between 1965 and 2007, and increased by 18% in 2008 alone. Duty on wine trebled between 1976 and 2007.
It does seem utterly bizarre that duty has increased in reverse proportion to how strong drink is – beer has increased most, then wine, then spirits. Clearly that’s wrong and I support the Committee’s view that, relative to other drinks, duty on spirits should be increased.
But affordability and price are being treated as the same thing - they're not. By deliberately confusing ‘affordability’ (which is a function of rising disposable income) and price (which is a function of – well, price, but controlled chiefly by duty), you allow newspapers like the Telegraph to interpret these findings in the following syntax-strangled bullet point:
- “69 - percentage alcohol is cheaper by than it was in 1980.”
This is a lie. Alcohol is NOT cheaper. It is already increasing by more than inflation, and in recent decades, it always has.