We pay a lot of tax when we purchase cigarettes or alcoholic drinks. Personally I do not care how much tax is paid on tobacco, the more it is, the more will be available for the NHs to look after the smokers. Also it might reduce the number of smokers in the first place.
On a typical pack of 20 premium cigarettes the total tax burden of £6.91 accounts for 74% of the recommended retail price (RRP) of £9.40. On some of the least expensive brands the total tax burden accounts for up to 88% of the RRP.
I suppose the same arguments could ensue for alcohol consumption, but I like a pint or a bottle of wine and the argument against it, is not quite so black and white.
We pay £2-08 on a 75 cl bottle of wine, £7-26 on a 75cl bottle of spirits and 42p on a pint of beer.
Now because these rates are quite high there is an incentive to bring back with you from a visit to Europe certain quantities of alcohol and/or tobacco. If we leave the EU then we might well return to the pre EU days of 16 pints of beer or 4litres of wine or 1litre of spirits and be clear that is either beer or wine or spirits not all three.
In 2001-2002, Customs claimed that it had lost £600 million through alcohol duty evasion, compared to £450 million in 2000-2001. Sorry I could not find more up to date figures. Although how they know exactly how much is being bought in both for personal consumption and smuggled in for sale on the black market, I do not know.
However at present the treasury is reluctant to put up the taxes on alcohol because it will encourage even more purchases in Europe and will thus have a diminishing return in tax revenue. If we leave the EU then not only will we not be able to bring much wine back but the Chancellor will feel less restrained in raising taxes on alcohol and cigarettes.
This will not only affect your pocket, but may well result in more pubs closing. Since 2006 number of pubs has fallen by 20 per cent from 58,000 to 48,000.
It could also see an increase in the sales of home brew kits, which were so popular back in the 1970’s and 80’s.
As a friend of mine who is of the opinion that in the long term leaving the EU might be better for the UK said, ‘in the short term and from a purely selfish point of view, staying in is to be preferred.’ Personally I think leaving would be a disaster, short term, medium term and long term.