With pubs shut, home drinking serves Treasury £800m windfall

HEAVIER drinking during the pandemic has handed the Treasury an £800million tax windfall despite pubs, clubs and restaurants being closed.

A total of £12.7billion was raised in tax from alcohol duties, £800million more than anticipated, and up from £11.5 billion in the previous year, according to the Office for Budget Responsibility.

Consumers switched to supermarkets and off-licences for their drinks, which more than offset the losses suffered by pubs, clubs and restaurants that were either closed, under curfew or faced Covid restrictions on sales, the OBR reported.

“Alcohol duties have been revised up by £0.8billion (6.6 per cent) this year relative to our March 2020 forecast – one of the few tax streams that has outperformed our pre-virus forecast,” it said. “Total receipts have held up as alcohol consumption has been one of the few tax bases unscathed by the virus. Higher sales in supermarkets and other shops have more than offset the loss in receipts from the closures of pubs and restaurants for large parts of the year.”

Will de Peyer, a former Treasury special adviser and director of Tendo Consulting, said there was a risk that trends of home drinking set during the pandemic could have an economic impact if they continued.

“Pubs and restaurants will be crossing their fingers that Britons’ love affair with alcohol continues when the hospitality sector is opened up again,” he

£12.7bn

The total raised from alcohol duties last year, £800m more than anticipated and up from the £11.5bn raised the year before

said. “If people get used to doing their drinking at home, it could have serious consequences for the local.”

There are, however, concerns at the social and mental health impact from the increased drinking. Almost one in three drinkers, 29 per cent, said they had been drinking at increasing or high-risk levels over the past six months (equivalent to more than 14 units per week), according to Alcohol Change.

Last year, the Royal College of Psychiatrists warned that as many as eight million people were drinking at levels that could lead to alcohol dependence and damage to their brains and bodies.

Already, 45 per cent of psychiatrists surveyed by the college said they had seen an increase in patients whose alcohol or drug use had led to a deterioration in their mental health.

“With less things to spend our money on, alcohol is a handy lubricant readily available to help ease the monotony of lockdown life,” said Dr Adrian James, president of the college.

“Not everyone will emerge from lockdown alcohol dependent, but as the nation drinks more, many more people might succumb to addiction.

“It’s vital we stop this crisis in its tracks by offering the right support before it’s too late.”