Trade bodies unite against George Osborne

18th December, 2013 by Amy Hopkins

The WSTA has launched a campaign calling for an end to the UK’s alcohol duty escalator – an act it claims would boost public finances by £230 million

WSTA-SWA-Call-Time-on-Duty-campaign

The WSTA’s Call Time on Duty campaign is being supported by the SWA and TaxPayer’s Alliance

After commissioning research from Ernst & Young (EY), the Wine and Spirits Trade Association (WSTA) has launched the Call Time on Duty campaign, urging the Chancellor of the Exchequer George Osborne to introduce a freeze on alcohol duty during the 2014 Budget and scrap its automatic tax increase.

Since its introduction in 2008, the duty escalator has increased tax on alcohol by 2%, yet the industry body claims this research shows that in addition to the multi-million pound public finance boost, scraping the measure would also create 6,000 new jobs in 2014.

According to Miles Beale, chief executive of the WSTA: “This shows that the alcohol duty escalator is bad for consumers, bad the economy and bad for business.

“So our message to the Chancellor is clear: if you’re serious about creating jobs, supporting growth and cutting taxes, then you need to be fair and call time on your inflation-busting alcohol super-tax.”

The WSTA added that while beer was removed from the duty escalator in the 2013 Budget, tax on spirits had increased by 44% and tax on wine by 50%, adding that since Osborne became Chancellor in 2010, tax on both wine and spirits increased by 25%.

SWA joins fight

Call Time on Duty is being supported by the Scotch Whisky Association and the TaxPayer’s Alliance.

“It is shocking that most of the price we will pay when buying our favourite tipple this Christmas will go straight to the taxman,” said Jonathan Isaby, political director of the TaxPayer’s Alliance.

“If you want to leave a festive brandy out for Santa as he delivers the presents on Christmas Eve, you’ll have to buy another four for George Osborne.

“The Chancellor rightly stopped the endless tax hikes on beer at this year’s Budget so he should be fair and do the same for wine and spirits in 2014.”

According to EY’s report, the wine and spirits supported 475,000 jobs, either directly or indirectly, in 2012, while in the same year, the wine and spirits industry directly or indirectly supported over £40 billion of economic activity in the UK.

Meanwhile, according to the SWA, Scotch sales in the UK have declined by 12% since the introduction of the escalator, dropping from 102 million bottles in 2007 to 90 million bottles in 2012.

The association added that tax and VAT now form 79% of the price of an average bottle of Scotch Whisky sold in the UK.

Gavin Hewitt, SWA chief executive, said: “Tax at almost 80% on the price of a bottle of Scotch Whisky is unjustifiable. It penalises consumers. It also harshly treats the Scotch Whisky industry which is vital to the UK’s export performance.

“The UK is near the top of the league table in taxing alcohol. This sends the wrong message to overseas governments when they consider their tax treatment of Scotch Whisky imports.”

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