Alcohol Duty Increase Reduced

The increase in alcohol duty on wine and spirits has been halved to 2.5%, with that rise applied to all types of alcohol.

The government proposed a 5% duty hike on wines and spirits and nothing on beer and cider.

Ministers argued that more needed to be done to promote better health and less alcohol consumption.

But the Corporate Services Scrutiny Panel said its amendment will help to keep taxes low, broad, simple, and fair, whilst being sympathetic to the pressures faced by the hospitality sector.

Deputy Steve Ahier said specifically targeting wine and spirit drinkers was fundamentally unfair.

"The problem with addiction should be addressed at a personal level, and those requiring support should receive it.

Raising duty to such high levels will not decrease consumption, but may well affect inflation in the future, which is something we should all be working to avoid."

The Jersey Hospitality Association wrote to States members before the debate, urging them to back the Scrutiny amendment.

The letter sent to States Members by the Jersey Hospitality Association (click here to open in a new tab)

Despite that plea, the Treasury Minister says concerns remain over the levels of alcohol consumption in Jersey, including with wine and spirits among younger people and even school children.

"Emerging survey information suggests that the recent lockdowns, if anything, may have increased consumption across all population groups that drink alcohol.

In Jersey, wine is the type of alcohol most often consumed in a harmful and hazardous way by a much larger number of people.

Regarding spirits, our health officers have flagged concerns that this is the type of alcohol consumed most by younger people.

Given the increased harm of alcohol to the developing adolescent brain and risks of dependence into adulthood, there are significant public health gains in ensuring that impôt duty reflects harm and reduces consumption among this vulnerable group."

Despite that plea, States members questioned where the evidence was behind it.

Many also called for support to be given to the hospitality industry, when the impact of the pandemic is still affecting them greatly.

"It will be wrong to send out a message that the States of Jersey simply is not listening to the hospitality industry. In the grand scheme of things, the amount of lost impôt is very small." - Constable Simon Crowcroft.

Deputy Kirsten Morel also said there was underlying sexism in what the Treasury Minister was proposing.

"Beer and cider tend to be consumed more by men, wine, certainly when out and about in pubs, tends to be, I believe, consumed more by women.

So it seemed to me to be penalising women in favour of men, which is something I've not been able to shake.

I apologise profusely for using that stereotype there, but it's the only way I can see it."

Despite some members of the government arguing that this change would only be 'rearranging the deckchairs', the Scrutiny amendment was approved by 29 votes to 16.

It cuts revenue by more than £230,000 next year.

It's the second successful challenge made to the government plan, with politicians also voting to make buy-to-let investors pay higher stamp duty.