Minister: alcohol and tobacco cost Jersey £24m a year

Monday 14 November 2016

Jersey's Treasury Minister remains on a collision course with the hospitality industry after launching a staunch defence of Budget 2017 - which will see inflation-busting price hikes on both cigarettes and alcohol.

Speaking on Friday to the Chamber of Commerce, Senator Alan Maclean said that both alcohol and tobacco cost the Island way more in treating health problems, than it gets back in duties.

He was defending the proposals in Budget 2017, which will be debated by the States next month, and which if agreed, will add 43p to a pack of 20 cigarettes, while booze will increase on average by 5%.

Speaking at the Pomme D'Or Hotel, Senator Alan Maclean said: "It is a hot topic. It is never popular that these are increased by more than inflation, but this is in recognition of the significant impact that alcohol and tobacco have on public finances.

"There are around 500 hospital admissions each year wholly attributed to alcohol and one in five of all crimes in the Island involves alcohol. There were almost 500 incidents of domestic violence involving alcohol reported by the States of Jersey Police since 2012.

"Based on UK figures, the annual cost of alcohol related harm to Jersey is estimated to be £30m per year. To put this into context the duty rate for 2015 from alcohol was £17.2m. That leaves a £12.8m shortfall which has to be found from general tax revenue - paid for by all of us. 

"Studies also demonstrate that the influence of price on alcohol consumption is very strong. In effect, when the price of alcohol goes up, drinking goes down and so will the cost to the health service and other Government departments. 

"The statistics also make it clear that the duty raised on higher strength alcohol has seen consumption levels fall. There is a direct correlation."

Senator Maclean then turned to tobacco, saying the figures also back up his decision to raise the duty paid on cigarettes. 

"Likewise with tobacco, the cost of dealing with the effects of smoking far exceed the duty that is charged. Based on UK per capita figures, the annual cost of smoking is estimated at just over £26m to the Island. The duty from tobacco was nearly £15m leaving an £11.5m shortfall for us to make up on general revenues. The overall burden that smoking places on our Island society is significant, make no mistake. There is a direct cost in smoking related illnesses, lost productivity and smoking related fires. Smoking remains the biggest cause of premature death with tobacco killing around half its users. There were over 2,500 admissions at Jersey General Hospital last year linked to tobacco smoking.

"It is obviously a difficult issue to decide how far we can go with taxes to encourage a healthier lifestyle. The use of tax to influence a healthier lifestyle is clearly an emotional and confusing issue for many."