On cheap booze at Westminster

There\’s more than just a subsidy to booze inside the Palace you know.

Apart from the obvious populist appeal of scrapping the ridiculous subsidy on parliamentary booze, which costs the taxpayer some £4 million per annum,

That is the subsidy on all the catering arrangements. But more than that, it also misses out why booze can be so cheap there.

I would hazard a guess that actually, all of that £4 million goes on the food side. The actual cash subsidy we can see.

The \”subsidy\” to booze is rather more hidden. On the wine side, there\’s a committee that decides what wines to purchase for the cellars. They buy in stuff then keep it for years until it matures. They don\’t, I\’m absolutely sure they don\’t, charge themselves the cost of money for that maturing process. Leaving out the financing cost of stocking wine fora decade will indeed make it look as if it\’s covering cash costs while still providing a substantial subsidy.

The other thing is, this is a Palace. I don\’t know what rent the authorities try to charge the Sports and Social for example. But I\’d be amazed if it\’s anything at all like a commercial London rent if indeed there\’s any charge at all. Further, as a Palace, rates are not paid. In that area of London rates are about the same as rent (I looked this up once for an empty pub a few streets away). Now, not charging a tax is not exactly the same as a subsidy. However, assume that they try to run the bars, at least, on a cover their costs basis. If they\’re not paying rates then they can charge lower prices and still do so.

There are more reasons why booze is cheap in Westminster than just the visible subsidy to the catering department.

6 comments on “On cheap booze at Westminster

  1. Now, not charging a tax is not exactly the same as a subsidy.

    I’m willing to bet that if the Government was to, say, decide that Starbucks shouldn’t pay any tax the front page of the Beeb and Guardian would be screaming “subsidy” and we would be treated to the delights of interviews with a retired tax account also screaming subsidy.

  2. Well, that all seems quite logical and tidy, even though I’m sure the £4 million is a blanket payment to the owners.

    Of course, the very fact that it is logical and tidy undoubtedly means that it is not at all the “business” (ha!) model that the civil servants have come up with.

  3. I do get a bit fed up with commentaries (not yours!) that conflate the availability of 25p/tin lager with binge drinking. No self-respecting binge drinker would choose anything with 2% alcohol!

  4. Like your logic, john b.
    Then not charging every working person in the country higher rate tax is a subsidy. Yep, I’ll go with that.

  5. Obviously no, because everyone who doesn’t pay higher-rate tax doesn’t pay it solely because their income is too low.

    But if everyone earning over the threshold had to pay higher-rate tax except for (e.g.) accountants, then yes, that would be exactly the same as a subsidy for accountants.

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