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Greater alcohol tax could help ‘disadvantaged’ drinkers
Higher alcohol taxes in the UK could benefit “disadvantaged groups” by generating more funding for healthcare services, according to a new study.
Higher alcohol duty could support greater public spending
The study by the Institute of Alcohol Studies (IAS) analysed official government surveys of living costs in the UK and calculated the amount of alcohol duty paid as a share of income and total spending. These figures were then compared between families using different indicators, such as income, spending, social class, house size, home and car ownership.
According to the IAS, “little difference” was found in the proportion of income or expenditure spent on alcohol duty by more and less affluent households.
From its findings, the IAS has suggested that an increase in alcohol taxes could benefit disadvantaged groups if the funds raised were spent on healthcare provisions.
To reach this conclusion, the IAS looked at the effects of using an increase in alcohol tax to grow funding for the NHS. The institute found that the poorest 60% of households would be better off on average, getting more in spending than they pay in tax, while the richest households would pay more than they receive.
With the UK budget scheduled to take place on 11 March, the IAS has used its findings to call on Rishi Sunak, chancellor of the exchequer, to increase taxes on alcohol.
Aveek Bhattacharya, senior policy analyst at IAS and the author of the report, said: “The single most effective way for the government to reduce harmful drinking is to make alcohol less cheap. Based on these findings, the chancellor should not be put off increasing alcohol taxes in next month’s budget out of concern for inequality.
“The cuts to alcohol duty he has inherited will cost the public purse £1.2 billion (US$1.6bn) this year, money that would do much more to help the economically disadvantaged by being invested in public services.
“Gradually raising alcohol duty above inflation over the next 12 years could save 5,000 lives, with a disproportionate share coming from the most deprived households.”