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2.30 pm
Life for the young, if it is anything, is an experience to be enjoyed to the full, with little thought for the consequences of their lifestyle. Ageing can be a difficult process, but it can also be educative. The hon. Member for Christchurch entertained us in Committee by revealing the drinking habits of members of the Christchurch Conservative club, where, he said,
- "every hour is a happy hour".—[Official Report, Standing Committee F, 14 May 2002; c. 33.]
It also emerged from our Committee debate on clause 3 that the favourite alcopop—or cooler, as it is described in the Christchurch Conservative club—is a drink called WKD.
Mr. John Bercow (Buckingham): I feel duty bound to defend the honour and integrity of the upstanding—even after their consumption of alcohol—members of the Christchurch Conservative club. Will the hon. Gentleman confirm that he is not suggesting that my hon. Friend the Member for Christchurch (Mr. Chope) secured the result he secured because of the inactivity of those members, who were busily engaged in another pursuit, and that he recognises that they were celebrating the success of their efforts to increase his majority?
Mr. Luke: That was an entertaining intervention. The formula succeeded in Christchurch, and may indeed be adopted by other Conservative clubs to ensure success at the next general election.
In Committee my right hon. Friend the Chief Secretary was quick—perhaps too quick—to let us know that another name for WKD was Wicked. As that libation is based on a mixture of vodka and Irn Bru, the more the Christchurch Conservative club consume it, the more the people of Scotland—where Irn Bru originates—will celebrate. Given the state of the Conservative party nationally, other Conservative clubs may seek to emulate the Christchurch club's intake of WKD. Irn Bru, which purports to be made of girders, could go a long way towards stiffening the Conservatives' performance at the next general election.
The more serious comments I made in Committee still stand, despite the changes contained in the explanatory notes and mentioned in letters from Ministers. Whatever the price increases involved, such are the sales of coolers—promoted through the "happy hours" more commonly found in student union and trend-setting bars than in the Christchurch Conservative club—and the heavy discounts to encourage overall sales and increase bar takings, that those changes will have no significant impact on jobs in the company that produces them. The Opposition's main argument against the tax increase was that jobs would be lost.
Those who take time to study local off-sales will find that nine times out of 10 there is a cut-price offer on drinks of this kind. Marketing techniques and fashionable images aimed at the young have led them to start drinking, which often—although not always—results in a catalogue of disorderly acts, especially among young females. Drinkers in that particular group have also fallen prey to a range of well-documented drink problems in later life, which may lead to criminal activity and health problems.
It is outrageous of the Conservative party to support an amendment of this kind. The proposal should be seen for what it is. It is not accepted by the vast majority of the population, I think it deserves little sympathy in the House, and I am sure that it will find little sympathy among my many constituents. I urge my hon. Friends to vote against it.
Mr. Edward Davey: It is tempting to follow the speech of the hon. Member for Dundee, East (Mr. Luke) with accounts of my own revelries as a youngster, or of revelries I have observed in various political clubs across the country. I am sorry not to share my memories of those enjoyable events, but I want to take up some of the serious points that the hon. Gentleman made so well.
It is true that there is a problem of binge drinking. It is true that many youngsters have a bit more money in their pockets than they had a few years ago, and—partly owing to advertising campaigns—are choosing to spend it on alcohol. I think, however, that alcohol problems extend across the age spectrum. Having spoken to magistrates and police in my area, I understand that alcohol is the drug behind most offences, especially violent offences, both in the home and on the streets. I am sure that the same applies in all constituencies, and I am sure that members of all parties accept that it is a problem.
What we must decide now is how to tax alcohol in general. There are many types of alcohol, as our debates have revealed. I did not know that this "Wicked" drink existed, and I certainly did not know that it contained girders or Irn Bru. I now know that there is a huge variety of alcoholic drinks that people can purchase.
Parliament, the Government and Customs and Excise really must develop an overall approach to alcohol taxation. I see no consistency or coherence in the present policy. Should there be changes in the retail price? The Government initially said that that was behind the strategy. Should the tax be based on alcohol content, on competition between different products, or on the impact of smuggling or cross-border shopping? There are a number of possibilities.
The decision on which drinks should be taxed most heavily might indeed be based on health findings, as the hon. Member for Dundee, East suggested, but the Government have produced no such rationale. They have made no clear statement since their election in 1997. They have not said "Here we have a number of alcoholic products, which are varied and which are changing. Here is our overall strategy for taxing alcohol." Theirs has been a piecemeal, reactive approach, driven more by revenue-raising considerations than by anything connected with such matters as health.
I accept that the hon. Member for Dundee, East has good intentions, but I think it unfair to castigate the hon. Member for Christchurch (Mr. Chope) or, indeed, to describe other Conservatives who oppose the present
position as "outrageous". We share the hon. Gentleman's concerns, but we are trying to probe the Government. We are asking for consistency and coherence in an important policy area.I shall not repeat points made by the hon. Member for Christchurch, which appeared in briefings I received from the industry and which the hon. Gentleman made very well. Let me, however, refer to an example on which he touched but did not dwell. Changes such as this have an impact on the market. The associations are worried because they fear that people may switch from coolers to wine-based drinks. As a result of a ministerial decision, Customs and Excise is having to grapple with the business of labelling and categorising, and with trading standards in the regulations, when dealing with different types of drink. When the market was taxed uniformly, some of those problems did not arise. Now Customs officers must—as the hon. Member for Christchurch pointed out—deal with such matters as the difference between spirituous drink and made wine. Even from the briefings that I have received, I know that the issue is incredibly complicated. It is not yet clear what form the regulations will take. They are still under discussion because the matter is so complicated.
When such a tax change is made, with all its implications for the market, one has to question its root cause. The Government have not given us a good reason for this change. I am not suggesting that it is easy to achieve consistency in this area, but I am pushing the Government for it, because if we do not get it we will have little changes every year that will affect relative prices, market shares and investment decisions.
We want to avoid such uncertainty. If we want a thriving drinks industry, which I am sure the hon. Member for Dundee, East wants, despite his reservations about some of the outcomes, we have to allow it to plan and invest and take strategic decisions. Unless there is a long-term strategy on the taxation of alcohol, problems will arise. We are worried because the Government have not shown that. That is why it is right for us to probe them further on the matter today.
John Healey: This has been a useful short debate, although it reopens discussion on a matter that was extensively dealt with in Committee. The amendment is designed to achieve the same result as Opposition Members wanted then: to allow spirit-based coolers—or alcopops, or FABs, as the hon. Member for Christchurch (Mr. Chope) called them—to retain the concessionary duty treatment that they have enjoyed since 1988 and to continue to be treated in the same way as low-alcohol wines.
It is clear that the pretext for reopening the argument is the fact that since we debated the clause in Committee, the Office for National Statistics has uncovered a mathematical error in the data that it supplied to Customs before the Budget, concerning increases in the retail price of coolers between 1999 and 2001. I was disappointed by what the hon. Member for Kingston and Surbiton (Mr. Davey) said. He is normally rational and moderate, but to describe the Government as being "found out" on this, when it was a genuine technical error, is a gross overstatement.
I wrote to all Committee members and made a statement to them concerning the error. I do not propose to trawl over all the details again here, other than to
remind Opposition Members that the most important thing that I said in my letter and my statement—it could have saved us all a lot of time this afternoon if they had taken greater note of it—was quoted only partially by the hon. Member for Christchurch. My letter said:
- "I want to assure you that—while regrettable—this error does not affect our rationale for this change or its estimated impact. The fact remains that—over a period when consumption of coolers was rising rapidly—their retail price was also rising well above inflation. This suggests that the Budget duty increase will have little impact on demand for coolers, but will ensure that they are taxed at a fair rate rather than retaining their previous concessionary duty treatment."
Whether the increase is 20p or 60p, the fact remains that, over a period when the consumption of coolers was doubling, the retail price was rising at a rate well above inflation. That suggests to us, and to independent market analysts, that demand for coolers is very inelastic. That suggests, in turn, that we can remove the concessionary treatment of coolers without damaging the growth of the sector. That was one of the key issues that we stressed in Committee.
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