The politics of drinking
             May 18, 2010

A taxing time for beer drinkers

For many, I suspect, opposing the UK’s inordinately high tax on beer is part of a more general opposition to taxation as such. For me, the problem is that duty and VAT are forms of regressive taxation. They do the opposite of what tax is supposed to do – redistribute wealth from the well-off to the less well-off.

Someone on £20,000 a year drinking 20 pints a week in their local is going to feel a tax increase much more sharply than someone on £100,000. It’s taking a much higher proportion of their income.

And as Pete Brown graphically showed this week, there is also a widening gap between the burden of duty on beer and that for wine and spirits. The less well-off, who drink more beer than wine, are penalised yet again. And pubs, where beer accounts for an average 60% of wet sales, are also punished.

We don’t yet know what George Osborne’s emergency budget will bring on June 22, but everyone seems to assume VAT will go up to 20%, costing beer drinkers £300m a year, according to the British Beer & Pub Association.

The new Chancellor could choose to close the duty gap between beer and other drinks but his room for manouvre is limited by the coalition’s priority to reduce the deficit. It’s not likely that the tax on beer will actually drop even if the beer lobby wins the argument that we should be favouring drinks that are lower in alcohol.

And it’s already looking suspiciously like all those cheery noises we heard during the election campaign about supporting pubs and beer are being quickly forgotten. That the post of pubs minister has been abolished a mere three months after it was created is not a good sign.

Nor is the rumoured switch of licensing to the Home Office, where pubs and drinking are more likely to be seen as law and order matters than as valuable leisure activities.

If the price of a pint continues to rise, and the promised cuts in public spending start to hit them in the pocket, Britain’s core beer drinkers will increasingly miss out on a trip to the pub and buy their booze at the supermarket instead.

Minimum pricing or bans on selling alcohol below-cost won’t stop that. The off-trade’s always going to be the cheaper option even if it’s a little more expensive than it was.

Where will it end?

In France thousands are trying recreate the kind of the conviviality offered by a pint in the pub by using the internet to organise street-drinking parties thousands strong.

And a disturbing report in The Independent reveals how high beer taxation in Kenya is driving the poor to drink deadly moonshine liquor. It’s an extreme example but who’s to say it won’t happen here?

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