The Great Beer Duty Propaganda Coup

What seems to be fairly well accepted is that UK PLC has a national debt. It is generally accepted that the debt is higher than is good for the UK economy. To me, the biggest argument for getting that debt down is to reduce the interest payments to service that debt. It is estimated that the debt is over £30,000 for every working person in the country and that the interest on this debt represents nearly £2,000 a year for ever household in the UK. Nearly £2000 out of the taxes you pay do nothing other than pay the people¹ who have lent us the money for the privilege of us borrowing it. That's £2000 every year that can't be spent on hospitals, schools, police, roads and infrastructure investment.

Unfortunately my little brain is unable to work out the percentage of GDP that goes to pay this interest, but it seems it's not insignificant. It seems to me that paying down the debt with at least some urgency is important².

There are two ways of reducing debt. It doesn't matter if we are talking about an individual, a business or a country; spend less or earn more. Most of us would tend to say that earning more is the more preferable of the two options. Individuals can, perhaps, work harder, if they can find someone who will give them more work to do. Businesses can sell more, charge more for what they sell, or more usually, try to do a combination of the two. Spending less is more painful, less popular, and sometimes a bad long term solution, although for the brave it can be a good short term fix.

A country has more difficulties in implementing a comfortable deficit reduction program. Spending cuts are deeply unpopular with the majority of the population. At the very least we notice a deterioration in quality and availability of public services. A proportion of the population will be hit harder with reduced income or even job losses. People are right to get upset about this.

A country gets income from taxes. No one likes paying taxes. Income tax is shown on your payslip and therefore a direct reminder of how much money you would have had if it wasn't being deducted. Hiding taxes in duties, VAT and worst of all, employers NI contributions means that more tax is now raised by hidden means than the direct, and in my view the most honest and fairest; income tax.

There has been quite a bit of noise from Her Majesty's Government in the last few weeks about binge drinking. Funnily enough, the budget is coming up. The chancellor dare not put up income tax, but something has to be done other than cutting spending.

It's simple really, whip up a bit of irrational hysteria about a drink problem that is much less serious than is painted, happy in the knowledge that the whole thing will sell newspapers and help TV ratings, so the media are on side.

Wham! up goes alcohol duty again. The Government gains popular support and increases revenue to the exchequer. Job done.

I hope I'm wrong on March 21st, but I suspect I won't be.

What really is getting my goat is that The Portman Group have come out in support of this propaganda coup. So no, I feel no remorse for putting the boot in at them when they piss me off.

"The Prime Minister is absolutely right to highlight the behaviour"

From the site http://www.tululuka.net/alco/

Rather than challenge the Prime Minister's panic creating comments, The Portman Group actually supports him. I fail to see how a body that is supposed to be helping the alcohol industry, can be doing so when it is getting into bed with neo-prohibitionary sentiment. They should not be rolling over and saying "you know what? you are absolutely right, alcohol is just bad, no good thing ever comes out of drinking alcohol"

Don't get me wrong, I'm not saying that there aren't people who could do with watching their alcohol consumption, or more importantly, look at how their consumption affects others.  I'm not saying that alcohol related illness and alcoholism isn't present, indeed, I'd be a liar if I said I'm not directly affected sometimes.  Falsely feeding the general public with the idea that it is right to increase duty, because there is a wholesale problem, is tantamount to propaganda, but that is the message we will be given come The Budget.

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For information, if a pint of 4% beer is sold in a pub for £3, out of that, £0.71 goes to the exchequer in VAT and duty. If you have also paid 20% income tax, NI contributions etc³ you will have to have earned £3.75 "top line" to be able to afford that pint. Your £3 pint has earned the exchequer around £1.46. That's not including other taxes paid by the pub and the brewery in the form of their employees income taxes, duty on the fuel to transport the beer and many other hidden taxes. And that's now, just wait until The Budget.

¹What is baffling is who are all these people who have lent the money in the first place.

²The reader my disagree. Perhaps if you have lost your job as a result of public spending cuts it is not unreasonable for you to think that a little more debt spread across the population to prevent hardship is reasonable. A valid point of view.

³The actually net amount anyone pays in income tax in complex. It depends on your circumstances but has to consider income tax, NI contributions both employee and the larger⁴ employers contributions offset against tax credits. I think 20% is a low estimate.

⁴no, not many people know that this tax on employing people is significant.