The Sunday Telegraph reports that drinkers are likely to suffer a “double whammy” in the upcoming Budget, with the possibility of another 5% rise in duties, on top of the likely rise in VAT to as much as 20%. Obviously this would be bad news for pubs and drinkers, but it may not be good news for the Treasury either. As the report says, “the overall tax "take" from alcohol fell £730 million, from £15.117 in 2008 to £14.386 billion, in 2009”, suggesting we are already over the peak of the Laffer Curve when it comes to revenue from alcohol duties.
It will also be interesting to see if Osborne revives Labour’s plan for an across-the-board 10% increase in cider duty, and also if anything comes of the Tories’ promises to introduce a “supertax” on beers and ciders above 5.5% ABV, both of which contain the potential for significant negative fallout but little fiscal benefit.