Brexit opens the way for a major overhaul of the tax on booze which could help pubs and tackle problem drinking, according to a think tank.
Alcohol duty was an area where a break with Brussels could bring about “positive changes”, said a report by the Social Market Foundation (SMF).
The study came as Wetherspoon’s cut the cost of a pint of beer in its pubs by an average of 20p, with the firm claiming it was an example of how prices can come down if Britain leaves the customs union with the EU.
The chain’s Brexit-backing boss Tim Martin said leaving the bloc on 31 October would allow the Government to end “protectionist tariffs”.
In its report, the SMF pointed out EU-wide rules had a direct impact on the current system of alcohol taxation, including the way in which excise duty is calculated, and so acted as an obstacle to reform.
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With an eye on Brexit, one of the changes proposed by the report includes a move to charge more tax on supermarket booze than alcohol sold in pubs
The introduction of a “pub relief” would help support the struggling licensed trade while making drinking at home or on the street more expensive, said the SMF.
“As well as consuming stronger products, heavier drinkers are more likely to consume alcohol on the off-trade,” the report said.
“Therefore, in line with our proposed framework of focusing alcohol duty where harms are most generated, we suggest explicitly favouring on-trade consumption of alcohol in the tax system.”
It added: “However, despite duty reliefs not being unprecedented, one barrier to a pub relief at present
are the EU directives on alcohol taxation.
“Brexit could, potentially, eliminate this barrier to a pub relief being introduced.”
EU regulations also meant wine and cider were taxed according to the volume of the final product, while duty on beer and spirits is levied according to pure alcohol content.
Leaving the EU “could open up possibilities to rationalise alcohol taxation in the UK”, said the SMF.
The report concluded: “Depending on the nature of the UK’s departure from the European Union (if, indeed, the UK departs), there may be scope to reform significantly the way alcoholic beverages are taxed in the UK.
“Following Brexit, policymakers will probably be keen to explore the regulatory and tax reforms that have
been ‘unlocked’ by leaving the European Union – and alcohol duty might be an area where positive changes could be realised.”
The price cut on a pint in Wetherspoon pubs is the latest Brexit-related move by the firm which has shown its commitment to Brexit by selling more English and Australian wines over European brands.
Mr Martin said: “At the current time customers and businesses pay tariffs on thousands of products which are imported from outside the EU.
“These tariffs are collected by the UK Government and sent to Brussels. Provided we leave the customs union on 31 October, the government can end these protectionist tariffs, which will reduce prices in supermarkets and pubs.”
