Backbencher proposes inflation-linked alcohol duty rise from 2026

Thursday 14 November 2024

A boozy night out could get even more expensive if a backbencher's plans to reinstate alcohol duty rises in line with inflation from 2026 are approved.

Former Home Affairs Minister Helen Miles has lodged an amendment to the Budget 2025-28 which asks the Government to commit to the reinstatement of duty on spirits, wine, cider and beer in line with the Retail Price Index from 2026 onward.

The Government is currently proposing to freeze alcohol duty for next year but have not revealed their plans for the indirect tax in 2026, 2027 and 2028.

Pictured: The Government is currently proposing to freeze alcohol duty for next year.

However, Deputy Miles said her change would ensure Ministers “remain focused on their commitment to improve the public health of the island” – and would raise almost £3.5m for the public coffers over the next four years.

Chief Minister Lyndon Farnham’s spending plans of nearly £1.3b were released in August and included freezing alcohol duty to help islanders with the ongoing cost of living pressures.

That makes 2025 the fifth year in a row that indexation of alcohol duty has been either frozen or held below inflation.

This comes after the previous Council of Minister’s proposed an 8.9% hike for 2024. But following an amendment from Scrutiny to freeze it, in a bid to help struggling hospitality firms, Ministers lodged a “compromise” amendment to their own proposal to slash the rise in half to 4.5%.

Deputy Miles – who was a member of that previous Council of Ministers – now wishes to add a line to the Budget which reads: “The Government commits to the reinstatement of the indexation of alcohol duty in line with RPI from 2026.”

She explained: “The rationale for this narrative amendment to the budget is to ensure that the Government remain focused on their commitment to improve the public health of the island.

“The public health burden of alcohol use is wide-ranging, relating to health, social and economic harm.

"There are tangible costs to our health, criminal justice and welfare systems and some intangible costs of lost productivity due to absenteeism in the workplace, unemployment, decreased output or lost working years due to ill health pension or death.

“Some harms impact upon vulnerable groups, in particular children in families where alcohol consumption impacts emotional and economic wellbeing.”

Pictured: Former Home Affairs Minister Helen Miles said the change would ensure Ministers “remain focused on their commitment to improve the public health of the island”.

She argued that the “financial burden” that alcohol-related harm causes to health and the criminal justice system is “not reflected in its market price”, and taxpayers are responsible for a larger amount of the overall cost compared to individual drinkers.

Deputy Miles referred to local, national and global research, including a survey from last April which found Jersey ranked as the second-worst country in the world for alcohol consumption with a rate of 12 litres of alcohol per adult per week – the equivalent of 8.1 pints of beer, or 2.6 bottles of wine.

Deputy Miles said the decision to freeze the duty in 2025 meant the Government would lose out on £868,000 in tax revenue.

She said: “There is a balance between economic concerns and health related imperatives which must be carefully considered.

"Given the level of funding we are told will need to be injected into Health Services in the future, it seems counter-intuitive to further reduce the revenue available through taxation to fund these services by continuing to freeze duty on alcohol beyond next year.”

Marcus Calvani, Co-CEO of the Jersey Hospitality Association, previously said that excise increases would stop people drinking in the "safe and controlled environment" of hospitality venues, forcing them to shop in off-licences and duty free.

Rises did not directly tackle Jersey's high rates of alcohol consumption, he argued.