Alcohol

Ways and Means – in the House of Commons at 3:31 pm on 29th November 1994.

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The single European market has brought real benefits to British industry, through an expanded market for business, increased competition, reduced bureaucracy at frontiers and cheaper transport costs. These have all greatly benefited our consumers. But one of the most widely publicised other effects of the single market has been the increase in legitimate cross-border shopping in alcohol and tobacco, and in smuggling.
Both of these have inevitably meant some loss of duty to the Exchequer, pressures on the British drinks industry and some damage to British business. No Chancellor can remain unmoved in the face of this, but nor can any Chancellor simply adopt popular measures to cut taxes on alcohol which would threaten the Revenue and require taxes on other goods to be raised.
In the longer term, the solution is for the Government to work with our European partners to bring duties more in line. The forthcoming review of Europe-wide minimum excise duties gives us the opportunity to make a start on that. This year, pending that, I have once again listened to the concerns of the industries. I propose no increase in the duties on beer, table wine and spirits. This will mean that the proportion of the cost of an alcoholic drink represented by tax in this country will continue to fall. Ten years ago 37 per cent. of the price of a pint of beer was tax. Today it is only 30 per cent.