Alcohol tax "designed to boost revenue, not improve public health"
Scottish people are not all half soaked and tight. That is a vicious stereoptypical judgment. What better way for the Scottish Government to prove this is not the case, than by claiming that increasing the price of alcohol will stop everyone drinking. This, of course, is yesterday's news, and something that is also probably not news to the rest of us is that it is all a load of Bollocks.
That’s right, Adam Smith* has produced a new report that stating clearly that these sin taxes don’t work, and that the only ones benefitting are the tax-collecting Government. And the bootleggers.
The new Scottish levy- which will make the cheapest bottle of wine cost upwards of £4.69, and a four-pack of lager at least £3.52 – is supposed to reduce hospital admissions and deaths as a result of encouraging lower levels of consumption. The policy is backed by research from Sheffield University's alcohol research group, which was commissioned by the Scottish Government to examine the impact of the policy.
Researcher Dr John Holmes, told BBC Radio Scotland that "a 50p minimum price would lead to an overall reduction in consumption of 5.5%. So harmful drinkers' consumption would fall by more than 10%, whereas moderate drinkers would see their consumption fall by just 2.5%."
"In terms of how much extra spending that would mean, harmful drinkers would have to spend over £120 extra a year on their alcohol, whereas moderate drinkers would spend just £8 a year more," he added, happy that his local offy in Sheffield would not be raising prices.
However, world-leading not-for-profit thinktank the Adam Smith Institute begs to differ. Economists there claim that, not only do sin taxes not work, they are unnecessary and “force the poor to pay for the government’s mishandling of public finances.” Stern stuff.
In fact, they claim that “research has shown that previous rises in cigarette tax have made only 2.3% of smokers quit, with the other 97.7% just paying more in tax.”
But the reason they are condemning the practice is because of the disproportionate effect on those with the lowest incomes. If the average smoker spends £1660 a year on cigarettes, that is a massive 20% of the income of those in the bottom 10% income bracket. Minimum alcohol pricing is also deeply regressive, only affecting the cheaper drinks consumed by the poor. The report claims that “punishing poor people for enjoying a drink or a cigarette exacerbates poverty and treats the poor like children who need to be controlled by the state.”
Chris Snowdon, author of the report and Adam Smith Institute fellow, says “campaigners for sin taxes and minimum pricing often claim that “healthy citizens” are forced to bear the cost of other people’s lifestyles. In fact, the evidence shows that smokers take less from the communal pot than the average Briton and the money raised from alcohol duty comfortably pays for any burden drinking places on public services. If the aim of policy is to make individuals pay their way, the government should slash the beer tax and subsidise cigarettes. We are not seriously suggesting the government does this, but if politicians insist on increasing taxes on these products, they should admit that the purpose is to raise revenue. Essentially the government is forcing the people who are least likely to live to extreme old age to pay for the escalating costs of an ageing population.”
So there you have it. The Scottish Government is more likely to raise oodles of cash than save the lives of winos. They probably think it’s a win win...
*not the scapegoat who got fired over cosying up with News International. This Adam Smith is an economist from the 1700s. He is actually dead now, but there is a Institute named after him where they do the report writing.