Azara Blog: Patricia Hewitt wants to hike up tax on alcohol

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Date published: 2006/10/27

The BBC says:

Police chiefs have backed calls by Health Secretary Patricia Hewitt to increase tax on alcohol in an effort to address binge drinking by young people.

The Association of Chief Police Officers (ACPO) suggested the revenue raised could tackle problems associated with excessive drinking.

Ms Hewitt had urged Chancellor Gordon Brown to "really increase" taxes on drinks such as alcopops.

The Treasury has not directly commented but is thought to be opposed to it.

A spokeswoman for ACPO welcomed Ms Hewitt's comments and said the money could be used by forces across the country.

"We would like to see the revenue from taxation ploughed back into those agencies, such as the police, who put huge resources into fighting the problems associated with drinking to excess, from anti-social behaviour to domestic violence," she said.
It was reported that Treasury officials see tax as "too blunt an instrument" to tackle young people's drinking habits.

There are two issues here, which have been conflated. The first is whether a much higher tax would discourage so-called binge drinking by making it too expensive. The second is whether revenue raised from taxing alcohol should be used mainly to solve problems associated with alcoholism.

On the first point, people who drink too much generally drink in pubs or clubs, and the real cost of the alcohol (with or without any tax) is just a fraction of the sale price. So increasing the tax is unlikely to affect them much and instead it is more likely just to hit ordinary, totally blameless, people who buy their alcohol in the supermarket.

On the second point, there already is an alcohol tax. If someone wants to claim it is not high enough to cover its associated costs then by all means put forward the facts. But be prepared to do the same for everything else. (For example, put a tax on kitchen knives to cover the hospital cost of people who get stabbed with knives. Etc.)

For once the Treasury is sane, this proposal really is a ridiculously "blunt instrument". And of course it would just encourage people to import more alcohol from France.

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