A short parable for our age:
Imagine, if you will, that a man called George has to be admitted to hospital with a little lump. It is worrying for him, so he puts himself in what he hopes will be expert hands. His condition is unfortunate, but it happens to many people and with careful management, it should not be a major problem.
On his first visit from the consultant, he is told that the experts predict the lump to grow at a fairly manageable, standard rate – let’s call this ‘inflation’, not one to worry about unduly – PLUS a bit, … an innocuous sounding 2%.
Well, the shock of the process is a lot to take in, so George accepts the prognosis for now and tells himself he can get more details later. At least the experts are keeping an eye on it, right?
Luckily for him, the consultant checks in with him on a very regular basis and each time, the conversation goes something like this:
George: “How am I doing? How’s that little lump I came in with?”
Consultant: “On the subject of The Lump, there is no change” – and promptly leaves.
Phew! The consultant is a busy man, so George doesn’t get much of a chance to question him in detail. However, it is great to hear that there’s “no change” in his condition.
One day George looks in the mirror and has a shock as something very strange has happened. He realises that this little lump has become a HUGE growth, much bigger than those of all the others around him. What happened? He calls in the consultant to confront him.
Consultant: “You didn’t think I meant that nothing was happening, did you?
I TOLD you ages ago it was growing all the time and by “no change” I meant that the growth was as aggressive and dangerous as we expected. I’m sorry you felt reassured. There’s really nothing we can do.
In fact, that little growth you came in with is now at least 50% bigger and you are now very sick indeed. Like I said, “no change”. Good luck!”
Poor George! All this time he had felt so secure while in fact things had been going from bad to worse, and if you look at the chart you can see that although the number was small and hardly grew until fairly recently, upon his admittance (on the blue line), the cumulative effect shows a rapid growth over the period marked 2008-2013. Hardly healthy.
By some unfortunate coincidence, this apocryphal story reflects what has happened to Duty on wine (alcohol) over the years of 2000 – 2013.
The government of the day introduced a “Duty Escalator” in 2008 that would increase Duty on wine, from a level already higher than almost anywhere in Europe, by inflation PLUS 2%. Considering that inflation has hovered around 2% for the period, it basically means DOUBLE inflation every year. On top of this, the increase is cumulative (i.e. always a percentage of the higher amount). AND ON TOP OF THIS, there is 20% VAT payable on the Duty itself too.
We have got to the stage where 50% of the cost of the average bottle of wine sold in the UK goes straight to the Treasury, AND we are now paying HUGE amounts compared to almost anywhere else in the EU – apart from Ireland (who had a financial meltdown worse than ours) and Finland (that have a general high taxation regime). Check out this graphic by the excellent Gavin Quinney to get a sense of what this means
The patient is getting impatient. It is time to stop pretending there is “no change” and realise that the amazingly diverse wine culture that we have in this country, that supports not only the UK wine consumer, but also artisan producers in EU and around the world, that is the envy of most of the world and attracts many tourists and investors, is being destroyed by greedy politicians keen on tapping the UK consumer for as much as they can.
George, it is time to say enough is enough. Be fair George!