Clause 9
Finance Bill
5:00 pm
Jeremy Browne (Shadow Chief Secretary To the Treasury, Treasury; Taunton, Liberal Democrat)
I ought to declare an interest because I am member of the Campaign for Real Ale and a very keen supporter of the licence and brewing trade in Somerset and across the country. I have spoken to many people who will be affected by this aspect of the Bill. The 2008 Budget announced a 6 per cent. rise across the board in alcohol duty, which equates to 3p on the average pint of cider, 4p on a pint of beer, 14p on a bottle of wine and 55p on a bottle of spirits. That is way in excess of inflation. What also upset a lot of people who are interested in these matters is that the Chancellor announced what is in effect a tax escalator for alcohol in future years, so we know that the price of alcohol will continue to rise above the rate of inflation.
I—and I am sure everyone in the Committee—share the concern which has been expressed by many of our constituents about the phenomenon that is widely described as binge drinking. Nobody who has been out in a town centre—particularly on a Friday or Saturday night—and has seen people who have drunk to the point of illness and needed to go to accident and emergency wards for treatment, can regard that as anything other than a serious social phenomenon. However, I am sceptical about the impact of price on binge drinking. We have talked previously about price elasticity of demand, and we come to that again with reference to alcohol. The Government appear to be telling us that the measures are to address public concerns about excessive consumption of alcohol and binge drinking. However, the Committee has to ask itself whether it believes that, for example, one of our constituents who goes out with his or her friends and drinks 10 pints of premium alcohol will be deterred significantly by the cost of their evening rising by 40p. If they are, they may choose to drink only nine and a half pints of premium alcohol instead of 10.
I find it hard to believe that the impact on binge drinking would be profound. The measures have already come in, so we know that they have not had the desired effect, unless members of the Committee can assure me that when they go out in town centres on a Friday or Saturday evening they find that everybody is sipping low-alcohol or soft drinks and the idea of getting drunk has not occurred to them. My suspicion and concern is that those who are most price-sensitive regarding alcohol are those who do not intend to drink to excess, for example, a retired person who likes having a couple of pints of beer in the early evening in a village pub, who may be likely to have one and a half pints rather than two. The impact on binge drinking will be non-existent, but the impact on the pub trade may be significant, and the impact on the individual obviously is significant.