New alcohol duty system provides an opportunity to fix inconsistent government messaging

The UK government has given a wide range of arguments for increasing or decreasing alcohol duty which have sometimes contradicted each other over the past 15 years, according to new research by the Institute of Alcohol Studies (IAS).

Each year, HM Treasury and Office for Budget Responsibility forecasts assume that alcohol duties will increase in line with inflation, so that it stays the same in real terms. At each Budget the Chancellor of the Exchequer announces whether duties are cut, frozen, or increased. They have mostly been frozen in recent years.

Increasing the price of alcohol is one of the most effective and cost-effective ways of reducing population level alcohol consumption and subsequent harm, and duty increases are a key mechanism to do this.

Thematic analysis by IAS looked at how HM Treasury and its ministers have communicated decisions on duty rates since 2008 and found that there has been a wide variety of messaging. The framing of these decisions has often contradicted previous announcements and been inconsistent with other departments’ public health aims.

The six over-arching themes identified were:

1. Appealing to both continuity and change: to highlight either government consistency and long-term planning, or the government making a fresh change of direction
2. Supporting industry and business, especially the Great British Pub: support of the on-trade sector was frequently referred to when freezing or cutting duty, despite the lack of evidence that it helps.
3. Contributing to public finances and improving tax structures: when increasing duty, the benefits to public finances and funding of public services were highlighted.
4. Benefitting consumers and families: it was often stated that cuts to duty would help households, especially during crises, such as the COVID-19 pandemic or 2022-23 cost of living crisis.
5. Improving health and reducing alcohol harm: utilising price increases as a policy measure to reduce harmful alcohol consumption was used, particularly during announcements for the reform of alcohol duty.
6. Advancing fairness and simplicity: primarily during the uprating of duty with the duty escalator and when discussing the reform.

The themes identified suggest there are many apparent, and sometimes contradictory, objectives and little long-term strategy in public policy decisions on alcohol duty uprating. However, the reform of duty – which will commence on 1 August 2023 – does suggest a positive move towards clearer long-term goals for the system.

Over the past 15 years, stated objectives of alcohol duty often conflicted with other aspects of alcohol policy, highlighting a lack of policy coherence across government departments. For example, in 2016, revised low risk guidelines were introduced by the Department of Health and Social Care reflecting the latest evidence that there is no safe level of alcohol use, while the same year, beer, cider and spirits duties were frozen by HM Treasury.

In the announcements, different drink categories were given different amounts of attention, with beer and spirits duty being most prominent. Beer duty was often linked to pubs, pub patrons, and national identity. Announcements on spirits duty were often communicated as being about Scotch whisky, despite whisky not being the most consumed spirit, and the fact that almost all Scotch whisky is exported and therefore not subject to UK excise duty.

This may point to lobbying by different alcohol industry bodies and highlights commercial determinants of health in this policy area, bolstering the argument for depoliticising the duty system. IAS recommends the introduction of an independent commission to set levels of alcohol duty and include an automatic uprating mechanism. This will help ensure duty keeps pace with inflation and doesn’t lose value in real terms. By making the system an automatic technical decision, rather than a political tool at each Budget, public health considerations will be more protected, one of the stated goals of the new duty system. It would also give the alcohol industry a clearer and more consistent idea of what will happen with duty each year.