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Finance Bill

The hon. Gentleman is right to raise that interesting question. We still have the policy that we had last year. However, the calculation this year would be different. A revenue-neutral position looking at different percentages of beer would not be the same this year because of the background changes in the overall beer pricing regime. Our policy is very much the same, but we simply have not done the exact calculations this year that were done last year. The Government's duty increases last year had the opposite effect from what we are considering. Under those increases, problem and non-problem drinks alike went up in price. Since the last Budget, tax on beer has gone up by 8p a pint and tax on wine by 28p a bottle. It is worth pointing out that almost all wine consumed in this country is imported, so Labour's devaluation has added a 30 to 35 per cent. premium on top of that. Meanwhile, duty on a bottle of spirits has risen by about 47p on average. We want the Government to consider and evaluate a smart alcohol taxation regime, focusing on the drinks most closely linked to problem drinking, such as alcopops and high-strength beers and ciders, and using the proceeds to reduce duties on lower-strength alternatives elsewhere. We should look at what has happened in Australia and Germany, where such approaches have been used to good effect. The Government should seriously consider introducing such reforms here, instead of using health concerns as a cover for a blanket tax rise for responsible drinkers. There has been some controversy in this country about the German experiment on higher duty rates on alcopops, introduced on 1 July 2004. Like this country, Germany had a real problem with alcopops among teens. Those relatively high-strength drinks were particularly prone to getting youths drunk quickly; the sweet flavours camouflaged the high and bitter alcohol content. Many have said that the tax increases that the Germans introduced did not work, as youths simply switched to other forms of alcohol. The issue cropped up at some length in last year's Finance Bill. In an attempt to separate fact from fiction, I decided to see for myself by talking to a number of those involved in the changes in Germany; the Government's Treasury team will recall that I maintain a regular dialogue with a number of German politicians. I also studied the reports of the Bundeszentrale für gesundheitliche Aufklärung, the federal institute of health information, and the federal Government's own report about the effects of the alcopop tax law on the consumption of alcohol by youths aged 18 and about the market development of alcopops and similar drinks. I recommend that the Minister look at that report, because she would learn a great deal from it. The German tax increase on alcopops—we must bear it in mind that alcopop consumption is generally falling, but that alcopops nevertheless remain a problem drink—was quite severe: a whole euro was put on top of the price of a 275 ml bottle. Labour Members' criticisms of the changes during the debates on last year's Finance Bill were partly correct. There was a switch from alcopops to mixed drinks based on beer and wine, but let us look at the figures in terms of pure alcohol drunk. In the year following the alcopop tax rise, wine and beer-based drinks consumption by those aged 12 to 17 rose from 3.9 g per person per week to 5.3 g as a result. By contrast, there was a staggering fall in consumption of spirits-based drinks from 8.5 g per person per week to only 2.2 g. In other words, spirits-based consumption quartered, while wine and beer-based consumption went up by only 35 per cent. In terms of pure alcohol consumed, there was a net change from 12.4 g per week to just 7.5 g. Under the German tax change overall, alcohol consumption by those aged 12 to 17—a very important part of the population whom we do not want to have drinking in general—fell by some 40 per cent., which is a huge success.