Not entirely unpredictably, taxes and spending are set to go through the roof after Labour's first budget since 2010. Having promised not to tax working people, Rachel Reeves announced tax rises for smokers and drinkers, announced a new vape tax and increased the sugar tax. Details below from the Red Book.
Alcohol duty will rise in line with the RPI from February 2025 and it was implied that this would be an annual thing. Draft beer duty will be cut by 1.7%, which apparently amounts to a penny off a pint. I will be personally making sure that the IEA's local in Westminster has cut the price of a pint of Paulaner from £7.55 to £7.54.
While the draft beer duty cut will be barely be felt by drinkers, the vape tax will cost vapers around £300 a year. And yet the beer duty cut will cost the government £100 million a year while the vape tax will only bring in £15 million. Is it really worth it?
My comment on behalf of the IEA:
"A wealth of economic evidence shows that taxing e-cigarettes leads to more people smoking. Taxing vape juice shows that the government is not serious about its 'smokefree' ambitions.“Reeves says that yet another 'one-off' tax hike on tobacco will dissuade vapers from switching back to smoking, but with 26% of the cigarette market already in the hands of organised crime, the legal price of cigarettes is irrelevant to a growing number of smokers. Tobacco duty revenue has fallen by £1.5 billion in the last two years and it will go on falling, despite the tax rate rising, because smokers feel no moral duty to buy legal cigarettes and give money to politicians who so obviously hold them in contempt.“Cutting draft beer relief so that a pint in a pub is 1p cheaper doesn't come close to compensating from this tax raid. Drink 600 pints and get one pint free? It is a cheap gimmick."
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