Teetotal Britain would be a disaster

Posted on September 3, 2015

A frequent argument made in support of placing further restrictions or higher taxes on alcohol is that the problems caused by alcohol cost the taxpayer far more than is raised in taxes.

An oft-quoted comparison is that booze duties, and the VAT added to them, bring in roughly £11 billion but the cost to the taxpayer is around £21 billion, a net cost to government coffers of around £10 billion. In fact, the latter figure is based on 'costs to society' rather than 'costs to taxpayer' and is made up mostly of costs to individuals and employers, including a range of emotional and personal costs that are given arbitrary monetary values.

A new report published by the Institute of Economic Affairs, Alcohol and the public purse: Do drinkers pay their way?, attempts to take a proper look at the actual government expenditure related to problems caused by alcohol, mostly the costs to policing, the criminal justice system and the health service.

As the report's author, Christopher Snowdon, rightly points out, this is an inexact science. Many of the figures are out of date or are based on assumptions that may or may not be true. But even at a generous estimate – that is, taking the highest plausible figure for costs in every case – the cost to taxpayers is £3.9 billion, far lower than the £21 billion figure routinely bandied about. The true burden on the exchequer is probably lower, which means that the net effect on the public finances is one of subsidy, not expenditure: drinkers are topping up the government coffers to the tune of over £6 billion per year.

Hopefully this report will nail the lie that drinking alcohol is an enormous burden on society, though that may be optimistic, given that the puritan anti-alcohol lobby isn't really terribly interested in a proper assessment of the costs and benefits of alcohol. The campaigners who want to restrict alcohol are really saying they know what is best for us. They ignore the benefits of alcohol - an enjoyable means to relax and a vital social lubricant. The consumption of alcohol has been an important part of almost every society for millennia. Today, millions of people in the UK regularly enjoy a drink, judging for themselves that alcohol is life-enhancing, not damaging.

Those who demand ever-greater restrictions on booze rarely offer us a proper counterfactual – what society would look like if alcohol were banned. There has been one grand social experiment to test this idea: Prohibition-era America. It was a disaster that promoted gangsterism, undermined respect for the rule of law and left millions without a product they greatly enjoy or forced to drink whatever dubious moonshine was on offer. A teetotal Britain would be just as much of a disaster. Far better to leave the choice about how much to drink and when to consumers.