Pay-per-unit plan to bring alcohol prices down

A rethink on the way alcohol is taxed could help bring about a fall in the price of booze at retail, according to a leading thinktank.

The Institute of Economic Affairs (IEA) has called for a flat tax on all alcohol, which will result in a set amount paid per unit rather than the complex system used now.

Most drinks would be cheaper, although some ciders would become more expensive

Christopher Snowdon, head of lifestyle economics at the Institute of Economic Affairs, who put the briefing paper together, said that alcohol costs the country £4.6bn a year in funding things like health, police and prison services, but raises £11bn for the Government through taxes. Snowdon has divided that figure by the number of units of alcohol sold to come up with a figure of 9p per unit tax.

This would raise the £4.6bn needed although, Snowdon admitted, with less than half the revenue than is currently earned from duty, it was unlikely to be introduced. He said the idea could “kick start” a much-needed debate about alcohol duty.

Snowdon said his idea would result in lower prices: “It will affect the price. Most drinks would be cheaper, although some ciders would become more expensive,” he said. “Wine is massively overtaxed.”

The IEA call came as a report for the Scottish government called for a ban on all alcohol sponsorship of sports and cultural events north of the border, as well as severe restrictions on TV, cinema and press advertising for alcohol.

The report was compiled by Alcohol Focus Scotland, whose chief executive Alison Douglas said: “Children are seeing and hearing positive messages about alcohol when waiting for the school bus, watching the football, at the cinema or using social media. We need to create environments that foster positive choices and support children’s healthy development.”