The government could generate £3.4 billion over the next five years by increasing duty on non-draught alcohol in line with inflation and reintroducing a 2% annual escalator above inflation, our new analysis has found.
This revenue could fund and sustain the salaries of either over 37,000 NHS nurses, 37,000 police officers, 35,000 teachers or 30,000 firefighters — demonstrating the potential for alcohol duty to deliver real public benefit.
Professor Sir Ian Gilmore, Chair of the AHA, has written to Exchequer Secretary Dan Tomlinson ahead of the Autumn Budget, urging the government to recognise alcohol duty as both a critical public health measure and a significant source of government revenue.
“Alcohol harm costs England an estimated £27.4 billion every year. Meanwhile, freezes and cuts to duty over the past decade have given away billions to alcohol producers in tax breaks — while public services dwindle and deaths from alcohol have soared,” said Sir Ian. “Reintroducing a duty escalator on non-draught products is a proven, life-saving policy that raises revenue without harming the hospitality sector.”
The previous Labour government introduced a duty escalator in 2008, which was linked to reductions in alcohol-specific deaths, hospital admissions, and violence. However, the policy was scrapped in 2013 by the Conservatives. A tobacco duty escalator remains in place, at 2% above RPI each year.
The AHA also emphasised that alongside Draught Relief and Small Producer Relief, this approach would support the hospitality sector by narrowing the alcohol price gap between pubs and supermarkets. This gap has widened over recent decades, contributing to rising rates of harmful at-home drinking and undermining the pub industry.
Sir Ian continued, “Alcohol duty is one of the most effective tools the government has to protect public health and support economic growth. It can encourage people back to pubs, where the social and economic benefits are felt across communities, while raising the vital funds for public sector services that this country is crying out for. We urge the Treasury to act decisively in this Autumn Budget — to save lives and support essential services.”
The full letter to Minister Tomlinson: