Confusion brews on Budget day

At the time of writing this article, the BBC is reporting on its website that in today’s budget, “Duty on beer and cider rises 1p a pint“.

http://news.bbc.co.uk/2/hi/uk_news/politics/6472999.stm

Yet, section 5.124 of the budget report itself says …

“… duties on beer, … and cider will increase in line with inflation, adding 1 penny to a pint of beer, … and 1 penny to a litre of cider”.

http://news.bbc.co.uk/2/shared/bsp/hi/pdfs/21_03_07_budget_report.pdf

However, duty on beer is not actually defined “per pint”. The unit amount of duty on beer is defined for every 1% strength of every 100 litres of beverage (i.e. per litre of pure alcohol). The rate of excise for beer in 2006 was set at £13.26 for every 1% of strength per 100 litres. The rate of excise for cider in 2006 was set at £25.61 per 100 litres.

http://www.wsta.co.uk/index.php?option=com_content&task=view&id=24&Itemid=56

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10 Responses to Confusion brews on Budget day

  1. Robin Paice says:

    I don't normally defend the BBC but on this occasion I wouldn't be too critical of either the BBC or Gordon Brown.

    It must be difficult instantly to condense Mr Brown's torrent of statistics into a short article, and most people will be interested in the effect of the Chancellor's changes on their daily purchases - which, regrettably, are still measured in pints (for draught beer and cider). What else should Mr Brown have done?

    What is important is that for legal purposes (i.e. to comply with the UK's own Units of Measurement Regulations) the tax has to be expressed per litre or hectolitre.

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  2. Dave Brown says:

    I should be interested to know what the chancelor thinks the rate of inflation is, and what strength beer he is drinking. By my calculation, if the change adds 1p to the price of a pint of 3.5% abv beer then his inflation rate is 4.74%. If you apply a more reasonable 2.5% inflation rate then the beer must almost 7% abv for the price of a pint to increase by 1p. Why on earth can't they just tell us how much the duty has increased by, either as a total per litre of alcohol or as a percentage?

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  3. Dave Brown says:

    I have now found the information I was looking for - http://www.hmrc.gov.uk/budget2007/pn-complete.pdf page 31 shows that the tax on beer has increased by 45p per litre of pure alcohol. That will add approximately 1p to a pint of 5% abv beer - quite a strong brew.

    This increase represents an increase of almost 3.4% - not "in line with inflation" as stated, but significantly higher. This is another example of the imperial/metric confusion being used to obscure the inconvenient truth.

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  4. Philip S Hall says:

    Given that the levy depends on the alchohol content as well as the type of beverage it would make more sense to indicate this rather than create the impression that a pint of beer will be taxed at so many pence regardless of the actual brew.

    One reason why no attempt is made to explain this is undoubtedly the complication of having to convert the underlying rules, which are based on the metric system, to pints.

    The folly of dual measures strikes again!

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  5. Robin Paice says:

    This is slightly off-topic, but the comments about inflation are not accurate. The RPI for February was 4.6% annual increase, and the CPI was 2.8% increase. See http://www.statistics.gov.uk/cci/nugget.asp?id=19. Obviously, the increase in excise duty varies according to the strength of the beer but it is reasonable to say the 1p/pint increase is "broadly in line with inflation".

    However, perhaps we should concentrate on measurement units rather than the rate of inflation.

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  6. Alex Bailey says:

    The BBC are clearly having a good day. I found an article on the new Dr Who assistant (http://news.bbc.co.uk/1/hi/entertainment/6478495.stm) which stated:

    Series three of Doctor Who required:
    20 gallons of latex rubber
    40 gallons of silicon rubber
    Four tonnes of clay
    10 litres of prosthetic adherent
    Three sets of prosthetic dentures

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  7. Martin Vlietstra says:

    The regulations increased the tax on spirits (and certain other drinks) to £19.56 "per litre of pure alcohol". The rate on beer was increased to £13.61 "per hectolitre per cent of alcohol". Unless I am mistaken "per litre of pure alcohol" and "per hectolitre per cent of alcohol" are identical.This means that the alcohol in beer is taxed at a lower rate than the alcohol in spirits.

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  8. Gus says:

    What about the metric pint? (50 cL)
    The perfect way to keep the pint that seems so important to some, and still be metric. Quasi-metric units rule!

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  9. Alex Bailey says:

    I've already seen places in the UK where 50 cl (or 0.5 l) are called "pint" but nobody seems to care about the difference and I've also heard people refer to 5 litre petrol cans as "1 gallon cans" so it's clear that in the longer term that people would have no problems with these quasi-metric amounts.

    The only problem arises when retailers use the change to hide price increases or where other countries have already set rules (I recently read of one ex-imperial country setting the "metric pint" at 600ml). That said, I do wonder what percentage of British tourists in the USA actually remember or even realise that pints of beer and gallons of petrol are different sizes - I was discussing fuel car fuel consumption recently with an American who I would consider extremely intelligent who had forgotten the difference when reading data on UK motoring websites!

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  10. Gary says:

    I suppose the confusion of litres and pints pretty much sums up the cultural incompatibility of the UK and Europe. Always at odds.

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