Does alcohol misuse cost England £27 billion a year?

The UK Temperance Alliance Institute of Alcohol Studies has had a go at updating a 2003 Cabinet Office estimate of the societal cost of alcohol in England. It's new figure is £27 billion. There are many problems with this, as I explain at Conservative Home...

 

It’s a mark of how much the currency has been debased that £20 billion in 2001 would, if it kept pace with inflation, be worth £36 billion today.

That £20bn was the “societal cost” of alcohol to England in 2001, according to an economic analysis from the Cabinet Office. That estimate has never been officially revisited.

However, the neo-temperance Institute of Alcohol Studies (IAS) put out an unofficial update on Monday to coincide with a Health and Social Care Select Committee on the subject. IAS’s estimate is £27.4bn – and this is being touted as a 40 per cent increase; the Guardian ran with “alcohol abuse costs soar to £27bn a year” on its front page.

But this ignores inflation. In real terms, the costs have fallen by around 25 per cent, and both the Cabinet Office estimate and the new estimate are gross overestimates.

When I calculated the cost of alcohol misuse to the government in 2015, I arrived at a figure of £3.9bn. Updating my estimates with fresh data last week, it became clear that the total is still below £5 billion and is less than half of the amount the government rakes in from alcohol duty every year.

Why are my figures so different to those of the IAS?

 

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