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Alcohol generates more in tax than it costs the government says think tank report

Published:  03 September, 2015

Free market think tank the Institute of Economic Affairs has produced a report which claims that alcohol revenue generates over twice as much tax revenue as it costs the country in health, policing, crime and welfare expenditure.

An IEA report claims that the costs of alcohol use to the government in England - including the NHS, police, criminal justice and welfare costs - amount to just under £4 billion a year, while tax revenue from alcohol comes to over £10 billion.

The report is based on the most recently available published figures and the IEA said that it erred towards "generosity rather than conservatism" when compiling cost estimates, with the result that the report's figures are "more likely to be an overestimate of the cost of alcohol use to the government in England, than an underestimate".

The report puts the annual cost of alcohol-related crime at £1.6 billion, health at £1.9 billion and welfare payments to those unable to work because of drink problems at £289 million.

It claims a figure of £20 billion for the total cost of alcohol often quoted by health campaigners is "extremely misleading" as it includes costs paid by individuals and private business in addition to those shouldered by government departments.

"It is time to stop pretending that drinkers are a burden on taxpayers," said the report's author Christopher Snowdon.

"Drinkers are taxpayers and they pay billions of pounds more than they cost the NHS, police service and welfare system combined.

"The economic evidence is very clear on this.

"Forty per cent of the EU's entire alcohol tax bill is paid by drinkers in Britain and, as this new research shows, teetotallers in England are being subsidised by drinkers to the tune of at least £6.5 billion a year."