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Monday, 19 December 2011

Two faces are better than one

I've just been listening to Nick Clegg (deputy prime minister, in case you were wondering) talking about the Tory proposal of tax breaks for married couples; he's fundamentally opposed to the idea that "the state should use the tax system to encourage a particular family form".  The idea's laughable anyway - "Let's get married darling and get our £3 a week tax break" isn't exactly Mills and Boon - but the comment on not using taxation to influence people's behaviour is worth examining.

As I have banged on here before, we are grossly overtaxed on our beer - British beer tax accounts for 40% of the entire European beer tax bill, even though the UK accounts for only 13% of EU beer consumption.  Why is this?  Obviously, the first reason is that beer is seen as a cash cow - an easy way of raising a lot of money quickly.  Except it's not nowadays, as I suggested on 24 September: "In my view, increases in beer tax have become self-defeating, with no increased income for the government as people drink less and less to compensate for the rocketing prices, and - despite what you read  - alcohol consumption in the UK is slowly dropping.  Throw in the costs of businesses going bust, including bankruptcies, job losses and state benefits, and you'd probably find that further increases in beer tax will actually lose the Treasury income."  However, no current politician has the guts to challenge the received wisdom that beer tax increases are good.

But the main point I wanted to make in this post relates to the other main reason for excessive beer taxes:  to control people's behaviour.  Tax increases are advocated by the quango-in-all-but-name, Alcohol Concern, an organisation paid by the government to lobby the, er, government.  Here the argument is occasionally wrapped in economic disguise, such as cost to the NHS and so on, but the main motive is to change people's drinking habits through the tax system.  At times the language employed can be reminiscent of the old Victorian moralisers.  Anyone who thought the tax system exists mainly to finance illegal wars and fund the bonuses of reckless gamblers in failing banks had better think again:  it's also there to make sure you do as you're told.

LibDems, with their Liberal traditions, should be wary of supporting the use of the tax system to interfere with how people live their lives, not just in marriage, but also in relation to alcohol, letting people decide for themselves whether to have a drink, and how much they choose to drink, although the idiotic "tipple tax" they suggested in August does not lead me to believe they know how to apply their professed principles to practical policy-making.

I'm not suggesting that alcohol is free from harm - only a fool would say that - but the role of government is to provide the information to let people make an informed decision without applying the tax system to make sure they choose correctly.  Such a position is entirely consistent both with Liberal traditions and with Nick Clegg's view on tax breaks for married couples, so there's little doubt in my mind that it's not one he'd adopt.

I think I'll write to Nick Clegg in the New Year to make this point, and I'll publish my letter and his reply (if any) on this blog.  If he supports beer tax for manipulating behaviour, we'll know for certain he's full of humbug.

1 comment:

  1. I think you're right to doubt getting a reply from Mr Clegg. You might be better off writing to John Pugh M.P.

    ReplyDelete

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