Cabinet in revolt over Camerons alcohol price plans: Senior Tories and Lib Dems unite to oppose unfair tax on the poor


Cabinet in revolt over Cameron’s alcohol price plans: Senior Tories and Lib Dems unite to oppose ‘unfair tax on the poor’Plan to make retailers sell alcohol for at least 45p a unit branded 'illiberal'Opposition grew when study showed poorest 20% would bear half price hike, paying an extra 318million a year for alcohol
Wealthiest 20% would pay an extra 7m and richest 10% would pay nothing

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UPDATED:

20:12 GMT, 16 December 2012

A bid to end Britain’s binge drinking culture by imposing a price hike on alcohol has been hit by a Cabinet revolt.

Senior Tories and Liberal Democrats have united to oppose the minimum pricing proposals, condemning it as an ‘unfair tax on the poor’.

Ministers critical of the plan, backed by David Cameron, to make retailers sell alcohol for at least 45p a unit said it was ‘illiberal’ and would punish responsible but cash-strapped drinkers.

Nick Clegg is among the group of politicians against the price hike

Theresa May is 'sceptical' about whether the change is legal

Against: Nick Clegg (left) and Theresa May (left) are believed to be among those who oppose minimum pricing

Home Secretary Theresa May whose
department would have to enforce the law, Education Secretary Michael
Gove, Chancellor George Osborne and the Deputy Prime Minister Nick Clegg
are all believed to oppose minimum pricing.

Mrs
May is ‘sceptical’ about whether the change is legal and fears that it
is simply a blunt instrument to tackle a more cultural problem.

The
Scottish Government which first planned the minimum pricing plan has
been warned by the European Commission that it could break European
anti-competition laws as it would place some imports at a disadvantage.

Former
Health Secretary Andrew Lansley – who is now the Commons Leader – is
understood to have reservations, believing that it will simply raise
profits for alcohol companies.

Price war: Senior politicians have united to oppose a price hike on alcohol that would see retailers selling it for at least 45p a unit

Price war: Senior politicians have united to oppose a price hike on alcohol that would see retailers selling it for at least 45p a unit

Jeremy Browne, the Lib Dem home office minister who is in charge of the alcohol and crime prevention, is also against the plans, privately warning it will penalise moderate drinkers.

One coalition source said: ‘Many ministers are sceptical. This is purely a Number 10 obsession.’

Opposition grew when a study showed that the poorest 20 per cent would bear nearly half the price hike, paying an extra 318 million a year for alcohol.

Meanwhile the top ten per cent of
earners would pay virtually nothing more, as premium lagers and
expensive wines favoured by the well-off would already be priced above
the minimum level.

The move would raise the price of a two litre, supermarket own-brand bottle of cider from 1.20 to 3.75.

Out for the count: A woman lies drunk on the soaking pavement. The price hike is a bid to end Britain's binge drinking culture

Out for the count: A woman lies drunk on the soaking pavement. The price hike is a bid to end Britain's binge drinking culture

A bottle of 6.95 gin could soar to 11.85. Beer with a strength of five per cent or more would be priced at at least 3.95.

Meanwhile a bottle of wine would go from 3.75 to 4.20.

The Home Office started a ten week consultation on minimum pricing last month in a bid to tackle binge drinking.

Both Mr Cameron and Health Secretary Jeremy Hunt believe higher prices would lead to a decline in drinking, reducing crime and the strain on public services.

Concerns over the impact of the price hike grew after a study commissioned by brewer SABMIller showed that a 45p minimum price would raise the cost of alcohol by 659 million a year.

Researchers from the Centre for Economics and Business Research (CEBR) said the poorest fifth of people would pay an extra 318 million each year.

The wealthiest 20 per cent would only
pay an extra 7 million while the richest ten per cent would pay nothing
extra from the policy.

Under-30s would be hit hardest by the price hike.

David Cameron believes supermarkets are hiking up the price of food in order to pay for discounted alcohol

Health Secretary Jeremy Hunt believes higher prices would lead to a decline in drinking

David Cameron (pictured left) and Jeremy Hunt (right) believe higher prices would lead to a decline in drinking

Minimum pricing would also disproportionately hit northern regions, with people in Yorkshire and the Humber paying an extra 109 million while Londoners would fork out an additional 42 million.

The North West and Wales would also stump up more. Scotland is already en route to imposing minimum hiking.

Senior economist at Cebr and author of the report, Scott Corfe, said: ‘Our analysis shows that minimum unit pricing is not a targeted measure and would hit responsible drinkers in certain parts of society much harder than others.

‘Those on the lowest incomes will be particularly hard-hit financially, bearing the brunt of the measure. This is despite the fact that health surveys show that those on higher incomes are more likely to drink to hazardous levels.’

Last week, the Prime Minister said
that middle class families were paying for boozy Britons because
supermarkets raised the prices of healthy food so they could continue to
undercut on alocohol.

On a
visit to North Wales, Mr Cameron said: ‘There is some evidence, pretty
good evidence, that what some supermarkets are doing is actually pushing
up the price of food, in order to heavily pay for the very discounted,
very cheap alcohol.

Strong arm of the law: Police in Birmingham try to maintain order. Some politicians believe higher prices would lessen the strain on pubic services

Strong arm of the law: Police in Birmingham try to maintain order. Some politicians believe higher prices would lessen the strain on pubic services

‘So, a family with a reasonable drinking habit – and I put myself in that category – a reasonable drinking habit might find they’re actually subsidising the binge drinker because of the way the pricing’s working.’ Diana Johnson, Labour’s shadow Home Office minister, said: ‘After months of delay by the Tory-led Government earlier this year on minimum unit pricing, there now seems to be real confusion over the policy.

‘We do need action to tackle crime and binge drinking, whilst recognising that most people drink responsibly.’