The strange case of the 40 litre limit

There’s been a bit of debate in the wake of last week’s Budget: was the Government’s decision to set a 40 litre eligibility threshold for ‘draught relief’ a sinister plot, or evidence of carelessness?

Though we’re by no means experts on the workings of Treasury and Number 11 Downing Street, between us, we have accumulated a bit of experience in this area.

During our time as civil servants, we were both involved in spending reviews and Budgets; Jess has been on teams auditing HMRC; and Ray spent the past three years writing about tax, including editing technical reports on budgets and fiscal statements.

With all that in mind, we reckon this is more cock-up than conspiracy but driven, in part, by biases built into the system.

First, in our experience, Treasury officials are by no means all mathematical geniuses and seasoned veterans, as you might imagine. They’re often careerist twentysomethings who studied arts subjects – assertive, confident, but not necessarily focused on detail.

Secondly, the extent to which budgets are put together in a panic shouldn’t be overlooked.

The details of the speech are often being finessed minutes before the Chancellor stands up in the house.

Policies are often announced before they’ve been fully worked up or, conversely, fully worked up but not announced at all, only coming to light when tax nerds read the background paperwork.

And the driver is very often “I need something that sounds generous I can announce – and I need it pronto!” (See also: veteran political adviser Damian McBride’s account of how Small Brewers’ Relief came to be back in 2002.)

Thirdly, we reckon we can guess how the 40 litre threshold was arrived at: someone at Treasury or on the Chancellor’s team asked someone at HMRC to tell them the usual size of a beer keg. 

Based on the fact that the vast majority of beer duty collected in the UK comes from national and multinational suppliers they said, “Well, usually 50 litres, I suppose.”

And how much is in a standard ale cask?

“That’d be a firkin at just over 40 litres. But it’s more complicated than…”

That’ll do, no time for fussing over details, need to get the dogs ready for Rishi’s photoshoot.

Or it’s possible they just Googled it, like most people would, and got directed to Wikipedia.

If they did check these numbers with anyone in the industry, the chances are that they reached out to those with connections to the Government. That is, we’d guess, Conservative-supporting national brewers who ship most of their beer in larger containers.

Again, that’s not a conspiracy, as such, but, if true, shows why government-by-network can cause problems.

A further indication that this wasn’t carefully worked out to the Nth degree is how tentatively the policy has been stated. It’s not due to take effect until 2023 and what was actually announced in the Budget was a consultation.

Cynics will say “Consultations are meaningless – they’ve already made up their minds!” Again, in our experience, that’s not necessarily true.

It’s likely that this policy will be implemented in some form but there is an element here of the Government asking other people to do its homework.

That means it’s well worth lobbying and responding to these consultations.

Under this government we’ve already seen quite a few policies being rethought when the public responds with anything other than delight. They do like to be liked.