Lawmakers support 2% UK spirits duty cut

A number of UK members of parliament have pledged their support for a 2% cut to wine and spirits duty during the next Budget Statement.

The WSTA and drinks producers have been lobbying government to reduce spirits duty

According to the Wine and Spirits Trade Association (WSTA), Iain Wright MP, chair of the Business, Innovation and Skills Select Committee, has backed the trade group’s call for a 2% reduction to wine and spirits tax.

Wright, MP for Hartlepool, said: “The British wine and spirits industry is a true success, creating jobs and exporting great British goods around the world.

“The Chancellor should consider a reduction in duty to generate even more jobs and exports – we would all raise a glass to that.”

Chancellor George Osborne is set to present his Budget Statement, which makes changes to the UK’s tax and government spending, on 16 March.

Last year, the Chancellor cut spirits duty by 2% following the success of the Drop the Duty campaign, launched as part of a collaboration between the WSTA, the Scotch Whisky Association (SWA) and the Tax Payers’ Alliance.

The WSTA said this move increased spirits revenue by 4% between April and December last year, compared to a spirits revenue decline of £11m in 2014 when the automatic tax escalator hit producers.

Tim Loughton MP, chair of the All Party Group on Wine and Spirits, also pledged support for further duty reductions.

“The wine and spirits industry had been hit hard by the alcohol duty escalator, but last year the Chancellor’s 2% cut on spirits and a freeze on wine provided a huge boost to business,” he said.

“I hope he will take this Budget Submission into serious consideration and go even further this year by cutting duty 2% across the board, supporting not only our booming Great British Gin industry, but also the flourishing English Wine industry, which is set to double its production to around 12 million bottles by 2020.”

The UK has the fourth highest spirits duty in the EU at £7.74 per litre.

Last week, Denis O’Flynn, chairman of the WSTA and MD of Pernod Ricard UK, and Miles Beale, CEO of the WSTA, were joined by English vineyard owner Mark Driver and Brighton Gin’s Helen Chesshire to meet Treasury Exchequer Secretary Damian Hinds MP on Thursday to put forward their case for the duty reduction (pictured).

“In the last 9 months since the Chancellor’s decision to cut spirits and freeze wine duty, wine and spirits brought in an extra £210m to the Exchequer,” said Miles Beale, chief executive of the WSTA. “We said this would happen and he listened.”

Beale continued: “Evidence now clearly shows that these cuts are not only popular, but have led to greater revenue for the Exchequer, more jobs, greater investment by the industry – and a better deal for consumers.”

Last month, the SWA launched its ‘Fair Tax for Whisky: Stand up for Scotch’ campaign, which also urges the government to lower spirits duty by 2%.