Leading MPs back campaign for 2% cut in drinks duty

12 February, 2016

The government must cut the duty on wine and spirits by 2%, two influential MPs have said.

Iain Wright, chair of the House of Commons’ business, innovation and skills select committee, and Tim Loughton, chair of the all-party group on wine and spirits, have both backed the Wine & Spirits Trade Association’s campaign for a cut in duty in the forthcoming Budget.

The WSTA is calling on the chancellor, George Osborne, to follow up his decision to cut duty on spirits by 2% last year and to freeze the duty on wine with a further 2% cut for both this year.

The UK has the second highest wine duty in the EU, and the fourth highest duty on spirits.

More jobs depend on spirits in the UK than in any other EU nation, with whisky production alone supporting 40,000 jobs directly, many of them in otherwise deprived rural areas.

Wright, the Labour 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."

Echoing Wright’s comments, Loughton, the Conservative MP for East Worthing and Shoreham, said: “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.

“I hope he will take [the WSTA’s] 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.”

Data from HMRC has revealed that the chancellor’s decision last year boosted Treasury revenues significantly, with duty from wine up £114 million in the nine months to year end, and from spirits up £96 million.

Miles Beale, chief executive of the WSTA, said: “Wine duties are now on course to reach over £4 billion in one year for the first time and spirits to reach £3.1 billion.

“We are calling on the government to cut excise duty on wine and spirits by a modest 2%.

“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.”

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