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COULSON Rebecca

Rebecca Coulson is a freelance classical musician and writer, and was Parliamentary Candidate for the City of Durham at the 2015 General Election.

Let’s tax the things we want to reduce.’  – George Osborne, 2016 Budget.

It was a budget fit for Lent. No, not a comment on betrayals, political crucifixions, or even cathedral repair funds. Rather, I’m referring to sin. Pressed to consider the budget as a microcosm of Osborne’s ethical approach, we can afford extra relevance to its measures intended to influence our behaviour. The famous sugar levy won’t be introduced until 2018, but last Wednesday’s updates to the more usual ‘sin taxes’ came into effect on Monday.

The UK exercises excise duty – a moral nudge, or inland sales tax – on a long list of goods, including alcohol, tobacco, and fuel. Of course, as a form of indirect taxation, it is paid by consumers in that the trade typically subsumes its costs by putting up prices. Recently, duty on wine has rocketed. Between 2000 and 2008, it increased from £1.36 to £1.56, before rising – thanks to Alistair Darling’s introduction of the fizzy-sounding ADE (the Alcohol Duty Escalator, which instituted an annual increase of 2 per cent above inflation) – by almost 50 per cent over the next four years, to £2.28.

Resultantly, Britain has the second highest rate in the EU. Last week, the price of each bottle of (non-sparkling, standard size and strength) wine sold here included £2.05 of excise duty, in comparison to 2p in France, and nothing in Italy and Spain. Having scrapped the ADE on beer in 2013, Osborne did the same for other alcoholic drinks in 2014; in 2015, he cut duty on beer and sprits, and froze it on wine. Today, wine remains a step behind. Unlike beer and spirits, it did not receive a freeze in the 2016 budget: its duty will rise in line with inflation (by around 4p).

It’s probably judicious to point out now that we can’t blame the EU for this. Although legislation does ensure member states charge excise duty on certain products, its ‘harmonised minimum rate’ for wine is nought per cent. Indeed, a lawyer friend suggested that the EU could be helpful in a fight about the disparity between British rates on wine and other drinks. It is commonly argued that UK duty should be higher on wine than beer, because we import much more of the former, and make much more of the latter. However – as well as that attitude discouraging the emerging British wine industry – we’re not supposed to favour our own produce over that of our EU neighbours, are we…?

Why might we question the disparity, anyway? In straightened times, is a hefty wine tax truly significant? Again, as a sign of governmental intention, perhaps it is. The ‘penny off the pint’ persists as the classic tabloid sweetener; ‘Save our Local!’ is the ‘policy objective’ behind the budget’s excise conclusion. Yet, increasingly, our country is full of wine-drinkers (not a reference to EU immigration): it’s the alcohol of choice of 60 per cent of Britons. When more than 30 million of us regularly drink wine, why does the pub – not the wine bar – continue to represent political expediency? Can wine really still be an exemplar of class divide: a luxury the rich don’t need help to buy? Do politicians still feel that it has little appeal (or little admitted appeal) to the all-important hard-up hardworking everyman?

In that we’re talking about excise duty, however, the Government’s wine stance actually hits the poorest the most. It’s charged per unit (‘unit’ as in vessel, not nanny-state health threat), instead of a proportion of that unit’s value. So, the aforementioned duty of c.£2.09 is added to each bottle, on top of VAT, retailer margins, and all the other costs involved in selling a product. If you pick up a bottle of branded wine in the supermarket for £5, the money you’re spending ‘on wine’ is less than 50p; if you invest in a bottle costing £50, £500, or even £5000, the duty remains the same. Therefore, if you can afford ‘everyday’ bottles at £10 rather than £5, over six times more of what you spend goes on the wine.

Ok, that risks a general decrease in quality, and familiar complaints about the unfairness of life, but should we really care? Shouldn’t we focus on something important, like the NHS? Speaking of which, isn’t wine – regardless of quality – as fatteningly evil as a cup of cream or a plate of fishfingers? And is quality what buyers of low-end wine genuinely want?

Well, philosophers such as Roger Scruton claim that wine plays a special societal role – that it offers us much more than a (hopefully) nice-tasting way to take the edge off the mundane day. In Consciousness and Wine, Cambridge’s Knightbridge Professor of Philosophy, Tim Crane, writes that: ‘Of all the consciousness-modifying substances developed by human civilisations, wine is the most ancient (traceable at least back to 5000 BC) and the most widespread […] It is also the substance most rich in meaning and significance in western European civilisations [.]’ If he’s right, maybe the government should consider how excise duty causes some Britons to miss out on wine at its best.

That said, a lost chance to educate people about wine’s intrinsic value isn’t the budget’s most serious story. And the new arrangement’s cost implication is limited. Yes, it will disproportionately affect poorer purchasers and smaller businesses, but when I asked the owner of my favourite local wine bar, he said, ‘I can’t complain. I wasn’t screwed as much as the rest of the country by the budget.’

Many want Osborne to provide better reasons for his actions. Yet, without needing even the simplest economic analysis of his wine duty decision*, one thing for which we can praise him is consistency. Wine, after all, does retain added sugar, unlike (most) beers, and all spirits (liqueurs are sweetened). Refusing to freeze its duty, therefore, kept Osborne’s overall messaging neat.  And perhaps the levy could inspire a deeper change in our country’s drinking habits. Not only will its attack on sugary mixers belittle those contrived and metallic-tasting supermarket cans of prepared gin and tonic (buoying the hopes of great British gin-makers), but Schloer – the nasty faux-wine alternative – will face the upper band wrath of tax, owing to its ridiculously high sugar levels.

Osborne may not have found the pennies to help wine directly, yet any budget that implicitly encourages us to drink the good stuff over ersatz fakery surely promotes quality, and – at a stretch – the real value of wine.

4 comments for: Rebecca Coulson: Let’s raise a glass of wine to drink as Osborne hunts for sugar to tax

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