Chris Maclean: Revealed - the real reasons for the Government's war on booze

19 February, 2010

--- Memo starts ---

From: Election Strategy Department, Labour Head Office, Victoria St., London
To: Alistair Darling MP, Chancellor of the Exchequer
cc: Head of Treasury

Private & Confidential: Policy Ideas for the General Election

Sir,

In view of the impending election Sir Roger has instructed me to produce this report (He's currently on a business trip to the Cayman Islands). Following recent confusion I've simplified it for the PM.

• We have a cataclysmic shortfall in revenue incomes this fiscal year
• Unemployment is up and looks set to increase
• All sectors of industry are feeling the effects of global recession
• "Quantitative easement" has only had limited success

Overview: We are in a mess, mostly of our making. Luckily the Tories haven't a clue how to get out of this either.

We need to go back to our cash cows for more money.

We are not going to be able to balance the books before the election but we need to appear to be going in the right direction. Possible areas might be;

• The banking sector. Their incredible greed in the face of global economic disaster is scandalous. Unfortunately it has too many echoes of the MP's expenses scandal. We can't accuse them because they'll accuse us. Its messy and dangerous.
• Cuts in public services. Almost impossible at election time. Maybe later.
• Inheritance tax. Deeply unpopular. The media is savaging us on this one, calling it the "Death Tax".
• Health tax. Tax increases on smoking and drinking are easy, immediate and dependable and, at the same time, appear "responsible". Tobacco is tired and has little mileage left in it. There's still some room with alcohol.

Overview: We have limited choices. We need money. There will be consequences, but alcohol seems the obvious route.

The drinks industry is the primary sector to optimise revenues. Here are a few ideas;

• Crime and anti-social behaviour continues to be linked to alcohol. We must keep it that way. We must do nothing to reduce this. By all means propose measures to "tackle the problem of drink-related crime" but don't implement them.Increasing tax on alcohol can therefore be seen as "responsible government". Drink related crime is popular in the tabloids and masks our problems with the economy, debt, expenses scandals and Afghanistan.
• Duty is identical with on and off-sales. We don't need to distinguish which.
• Pubs are closing at a high rate. It doesn't matter. These are isolated small incidents which pass un-noticed. It's not like losing a big employer.
• Historically this sector regenerates itself in recession. Its fuelled by redundancy cheques. It's a neat circle. We pay redundancy, they take a pub, we tax them heavily and get our money back. It's win-win.
• The sector is utterly divided and fragmented. There is no collective voice. While they are busy blaming the smoking-ban, the tied trade model and the pub companies we can tax them with almost no opposition. And they'll continue to blame each other.
• Types of taxation in this sector are only limited by our imagination; duty, VAT, rateable value, income tax, stamp duty, capital gains and corporation tax are staples. But what about an AWP tax, or a TV tax or an outside smoking tax? We need more vision in our taxation.

Overview: the continued demonisation of alcohol and the fragmented nature of the industry are an invitation for increasing the burden of taxation. We pretend we are doing good and they are powerless to prevent it. That is Government at its best. There is a great deal more to be gained from this sector yet.

Your obedient servant

Nigel St John Wrangle-Biscuit

Secretary to the Policy Committee

--- Memo ends ---

* If you haven't realised already, this is completely made up, but probably not too far from the truth.

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