Some good news? Beer and Cigarette Duty up.
The Chancellor presented his budget for the next year today. Of course, not all of the exact figures are in the final document (which can be found here), but here are some first observations:
The budget raises the duty on alcohol and tobacco – something that isn’t actually an invention of the current government, but a tax which had been introduced by the previous government. The budget also introduces a new tax on “high strength” beer, in order to discourage their production and consumption. In other words the government tries to encourage the production of more low strength beer, rather than highly alcoholic beer. While this is sensible, as the evidence is overwhelming that pricing does directly influence consumption of alcohol (see this article for a review of the evidence), it is sad to see that other alcoholic drinks, especially those with higher alcohol content don’t get more taxed.
The government also increases duties for cigarettes (as in every budget), and puts an additional 10% duty on hand-rolled tobacco. Similar to alcohol, a rise in prices is probably a good incentive to persuade people to give up.
Unfortunately though, the government does not seem to think that making unhealthy foods more expensive is a good idea. This remains a major problem area: In many cases healthy alternatives remain more expensive than unhealthier choices. And the current budget does nothing to correct this – or indeed to incentivize healthier food choices – a major public health concern. This would have been a courageous choice to make, and showing that the government is not just talking the talk when it comes to public health – especially after the withdrawal of the various health groups from the widely touted government campaign.
A different area, where the government could have made some progress from previous budgets would have been a further cut in VAT on condoms. He is happy enough (and probably short sighted enough!) to cut the funding for sexual health interventions (a staggering 43% of the Pan London HIV Prevention Programme, for example) – but this cut is not compensated by a further cut on VAT for condoms from the current 5% – introduced by Gordon Brown in 2006. Probably a recipe for more infections and more long-term costs to the health system.
The budget is, of course, very price focused, and often focuses on specific items. So how other health spending will pan out in the long run remains to be seen. With the COI disappearing, one has to wonder how the government plans to use the other “Ps” of the marketing mix to achieve health objectives.
Overall then, the budget had some cautious points in the right direction, in terms of taxing high-strengths beer and cigarettes – but some opportunities are not used. Let’s hope in future budgets the government is more courageous!