SWA pleas: ‘We can’t tax our way to growth’
The UK government must freeze spirits duty as recent tax hikes have led to greater borrowing costs, inflation and less money for the Treasury, trade bodies have urged.
The 10.1% excise duty increase, introduced by the previous UK Conservative government on 1 August 2023, brought about the biggest contribution from alcohol to inflation on record, the Scotch Whisky Association (SWA) said.
This resulted in £2.3 billion (US$3.1bn) worth of extra borrowing costs for the government, the SWA highlighted.
With the autumn budget looming on 26 November, the SWA is urging chancellor Rachel Reeves to freeze spirits duty.
Mark Kent, chief executive of the SWA, said: “Tax increases have led to greater inflationary pressures on consumers at a time when ordinary families are struggling and being squeezed from every direction. Our sector sees the strain first-hand – distilleries, pubs and hospitality venues throughout the UK know customers are cutting back and businesses are struggling.
“This pain for consumers and business has led to no gain for government finances – quite the opposite. The 14% increase in spirits duty over the past two years has seen government revenue fall, inflation skyrocket, and borrowing costs increased. We need to step away from that failed approach and understand we can’t tax our way to growth.
“A freeze on spirits duty at the next budget is a simple, proven, practical step that would ease pressure on households, protect jobs in our sector, and support Scotland’s world-renowned spirits industry. It would also boost public finances.”
Further figures show spirits duty contributions to the Treasury were 4.9% lower from April to August 2025 compared with the same five-month period last year – a £79m (US$107m) loss.
Looking back at the two years since the 10.1% spike, and spirits revenue to the Treasury has plummeted by £700m (US$905m) compared with the two years prior.
#TaxedOut
Trade body UKHospitality is lobbying against more tax hikes, and has launched its #TaxedOut campaign.
The organisation has created an online tool for hospitality teams to write to their local MP and urge the government to support the on-trade in the next budget.
UKHospitality hopes the simple template letter will encourage millions of people in the sector to add their voices to the campaign, alongside businesses and members of the public.
Kate Nicholls, chair of UKHospitality, said: “We know how passionately people who work in hospitality feel about the sector, so this new tool allows them to join the campaign, too.
“There are millions of people that have built a career in this sector and, critically, rely on it for employment and supporting their families. It’s so important that they can make their voice heard.
“I urge everyone involved in hospitality to share this tool with their teams and encourage them to write to their MPs.
“By uniting our voices, we can send a clear message to the government that the hospitality sector is being taxed out and needs urgent support in the forthcoming budget.”
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