Alcohol and Taxation

[John Simkin]

The Academy of Medical Sciences published a report yesterday showing a close link between alcohol consumption and taxation. For example, the people of Ireland, Portugal, France and Germany all consume on average over 10 litres of pure alcohol per year. However, the Swedes, who have the most expensive alcohol in the world, consume only 5 litres a year.

The report points out that in real terms the price of alcoholic drinks has fallen dramatically over the last 30 years. For example, in 1970, people in Britain paid twice as much (relative to our disposable income) as they do now. To adjust levels to 1970 would mean beer would cost £5 a pint and over £20 for a bottle of whisky.

The report argues that a mere 10% price increase would bring down deaths in Britain from cirrhosis of the liver by 7 per cent for men and 8.3 for women. It would also cut male murder victims by 5 per cent and female by 7.1 per cent. The overall drop in alcohol-related deaths would be 28.8 per cent among men and 37.4 per cent among women.

The annual costs of alcohol-related crime and public disorder in Britain has been estimated as £7.3bn last year. The costs to the workplace were £6.4bn and health costs were £1.7bn.

It is interesting that during the 19th century the left in Britain spent a great deal of time and energy in campaigning against alcohol abuse. This idea went into decline during the 20th century but the 1964-70 Labour government did increase taxes on alcohol. However, the present New Labour government does not appear to see the link between taxation and alcohol consumption. Or are there other factors at work?

[john birchall]

Cigarettes have been causing the same problems since the times of James 1! Where do you tax in a post Thatcher era - that is we have been told that we should not pay high rates of tax?

Franco kept booze and fags cheap for the workers, whilst the UK talks of freedom to select what you want. I was in Birkenhead yesterday and I would not want to increase the tax on booze and stand for election!

I do beleive that more repsonsible behaviour towards drink, especially amongst the young will favour higher taxes. I would also like to see brewers pay for alcoholic dry out centres and something toeards the high cost of drink related RTA's - a policy once put forward by Robert Kilroy Silk!!

john

www.johnbirchall-economist.net