Government rakes in £300m extra in alcohol tax amid World Cup fever

The government has raked in an extra £300million in taxes from alcohol so far this year as World Cup fever and sunny weather put Britons in the party spirit, it was revealed today.

Revenues from duty are up by 7.4 per cent – helping drive down public sector borrowing.

The Treasury put the surge down to the hot summer, England football team’s strong performance, and a ‘general increase in alcohol consumption’.

The rise emerged as new figures released by the Office for National Statistics (ONS) showed the government posted its biggest July surplus for 18 years last month.

The Treasury put the surge down to the hot summer, England football team’s strong performance (pictured), and a ‘general increase in alcohol consumption’

Public sector net borrowing, excluding state-owned banks, was in the black by £2billion, £1 billion more than was logged for the same month last year and the highest since 2000.

Economists had been expecting a surplus of £1.1 billion. 

Government coffers were bolstered by receipts on self-assessed income tax, which are usually higher in January and to a lesser extent in July.

The figures also showed that the deficit, excluding banks, in the current financial year to date was £12.8 billion, which is £8.5 billion less than during the same period in 2017.

That covers the period between April to July this year.

However, public sector net debt continued to climb inexorably towards a trillion pounds.

Excluding state-owned banks, it increased by £17.5billion to £1,777.5billion in July, – equivalent to 84.3 per cent of gross domestic product (GDP).

Chief Secretary to the Treasury Liz Truss said: ‘The warm weather and the World Cup was a winning combination, and we have been able to make even more progress repairing the public finances and bringing the debt down for the time in a generation.

‘But like Southgate’s players, we cannot put our feet up. We must keep debt falling to build a stronger economy and secure a brighter future for the next generation.’

Pantheon Macroeconomics’ chief UK economist Samuel Tombs said that the better-than-expected borrowing figures could give the Chancellor wriggle room to spend more in the Budget.

Revenues from alcohol duty are up by 7.4 per cent - helping drive down public sector borrowing (file picture)

Revenues from alcohol duty are up by 7.4 per cent – helping drive down public sector borrowing (file picture)

‘Public borrowing has remained on a sharp downward trend, creating scope for the Chancellor to pause the fiscal consolidation next year and still meet his self-prescribed targets,’ he said.

However, ‘faced with pressure from his own MPs to boost his party’s opinion poll standing and the political imperative to show that the economy has prospered after leaving the EU in March 2019, we expect the Chancellor to use this scope to borrow more’, Mr Tombs added.

‘That said, with extra money already earmarked for the NHS, the scope for tax cuts is modest.’ 

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