A bottle of Bells whisky could rise from £14.79 to £23.73 while Gordon’s gin, another favourite of middle-class drinkers, would increase from £12.79 to £21.17.
Hmm….three reasons being given for this. The first is to “curb binge drinking”. Yes, I too have seen the gin and tonic set rioting and vomiting in the streets.
The second is to raise money. Yes, there really is a Laffer Curve and yes, it applies to excise duties just as much as to any other tax. I’d simply love to see the calculations that people have done on how much extra revenue this might raise. Especially in a country where it is entirely legal, indeed, it’s a legal right, not just a permission that can be withdrawn, to purchase alcohol in other lower tax jurisdictions (one of which is only 26 miles away, accessible by £1 return trip ferry deals at times) and bring it home to drink. The third though is much, much, more fun:
MPs called for a return to the level in 1983 when the duty on a litre of pure alcohol was 11 per cent of the average male weekly manual wage, compared with 5 per cent in 2002.
OK, so, there’s something magical about tax rates as they were in 1983 as a percentage of the average male manual wage. Quite what it is I’m not sure but let’s run with that.
So what is the implication that all tax rates should be such? I think you’ll find that the personal allowance would have to rise substantially, that the NI contributions limit would have to rise substantially as well. Council tax would need to fall…there’s been, even over those 25 years, really a very large movement in taxes as a result of fiscal drag.
If anyone knows of a good place to find the figures for this I’d be grateful. Would be interesting to see what the effect on total tax collections would be if we did move back to 1983 tax rates as a percentage of the male manual wage.