The alcohol figures that just don't add up

The latest piece of ‘research’ by the Institute of Alcohol Studies (IAS) must easily be the most extreme move yet in its increasingly desperate campaign to win over the British public and Government over the scale of our alcohol ‘problem’.

It was at least predictable: as the beer and pub industry lobbied for a further cut in beer duty in last week’s Budget, anti-alcohol campaigners were bound to counter it.

A new report, picked up by the Publican’s Morning Advertiser​ (PMA) on 9 March, claimed that alcohol taxes are too low because the revenue collected by Government from alcohol sales is far lower than the cost of alcohol to society.

No story

The only surprise is that their effort was so dismal, a Google search suggests the PMA was the only UK publication to give it any coverage. Even the fear-mongering, right-wing press seem to have felt there wasn’t a story here.

Given that the move failed so badly, it might seem odd to give it more publicity here. But it’s worth drawing attention to it to shed light on the increasingly dodgy arguments these people are putting forward.

The report hinges on the claim that the Government collects £9bn in taxes in alcohol, whereas alcohol costs society £21bn a year. If these stats were true, there would be a strong case to answer. But the comparison between £9bn revenue and £21bn cost is completely erroneous.

Where to start?

How about with that £21bn? As I’ve written previously, this number seemed plucked from the air. The vast bulk of it consists of ‘intangible’ (and therefore incalculable) costs such as the impact on the economy of the emotional trauma of the victims of alcohol-related crime (£4.7bn of the total.) This figure was calculated in 2003.

The government unit that did it has long since been disbanded, and the independent fact verification service Full Fact was unable to find any person who worked on the project, or any data or research that was used in it. Even a cursory analysis reveals some curious anomalies that no one is able to explain, leading Full Fact to conclude that the figure is not reliable.

And what about the £9bn? Well, £9.2bn is the amount raised by duty on alcohol in the fiscal year 2014-15. But that is not the total revenue raised by taxation on alcohol. There’s also VAT, which raises an additional £2bn a year. This is not counted by the IAS because it is not a direct, punitive tax on alcohol. Well, that’s as may be. But it’s still government revenue directly from alcohol sales.
Thirdly, and perhaps most grievously, anti-alcohol campaigners like the IAS persist in not comparing like with like.

Figures

The £21bn figure, even if it was correct, is the total cost of alcohol to society, not just the cost to the taxpayer of health and emergency services dealing with alcohol-related harm. And yet in the plus column, this report and others before it only consider duty receipts from alcohol direct to the government. There isn’t an honest accountant on the planet who would accept this as an acceptable balance of cost versus benefit.

If the IAS were to compare like with like, they would have two options: firstly, to compare the cost to the UK taxpayer of alcohol abuse with the revenue to the UK treasury from alcohol sales. That would be a fair comparison. And it would reveal — as has previously been reported — that revenue would exceed cost to the tune of more than £6bn a year.

If they want to include every single cost of alcohol to society — including everything from lost productivity due to hangovers to expenditure on alarms to prevent alcohol-fuelled crime — they need to also include the broadest possible range of benefits from alcohol consumption.

Lies

And that would include the contribution pubs make to their local economy, and corporation tax paid by brewers, to the intangible benefit of the stronger social networks, increased community cohesion and stress reduction that moderate consumption gives the majority of drinkers.

Anti-alcohol campaigners are aware of all this, and yet they continue to quote their figure of £21bn versus £9bn figures as fact.

If you continue to insist something is true when you know it’s not, that makes you a ‘liar’. It’s time the drinks industry went on the offensive against these people and named them for what they are.