Lib Dem MP questions duty plus VAT formula

A Liberal Democrat MP has raised doubts about the duty plus VAT formula on below-cost sales, questioning whether it goes far enough to have a significant impact.

Stephen Gilbert, MP for St Austell and Newquay, raised concerns about the formula, proposed by his government colleagues, during a Westminster Legal Policy Forum debate in Central London today.

"My view is that I'm not sure that goes far enough," he said. "In some places there is an issue with supermarkets using alcohol as a loss leader."

Gilbert, a member of the communities and local goverment select committee, added he was not convinced the current proposal would have a "significant impact".

Pub trade leaders have also previously attacked the plan, branding it a "fudged compromise".

However earlier this week Home Secretary Theresa May told Parliament the ban on below-cost selling will mean 7,000 fewer alcohol-related incidents and 1,000 fewer hospital admissions a year.

Meanwhile, Mark Baird, Diageo's corporate social responsibility manager, told today's forum on reducing anti-social behaviour his company did not support a "pricing mechanism to tackle and reduce alcohol harm".

"There is no evidence to suggest increasing price reduces the problems," he said.

Baird said he did not "deny a link between price and consumption". But he argued the aim should not be to cut consumption, but reduce alcohol harm.

"Those openly targeting consumption are going after the wrong target," said Baird.

Instead he called for more education and enforcement of current laws to tackle alcohol-related problems.