WSTA argues duty cut would boost UK coffers

The Wine and Spirit Trade Association’s chief executive, Miles Beale, has appealed to the UK chancellor to cut alcohol duty saying it would boost the Treasury’s coffers.

In a budget submission sent to the Treasury today (21 January), it is argued that a cut of 2% to alcohol duty in the next budget would be a boon to the public purse.

A freeze on wine and spirits duty in 2017 led to a tax windfall and a freeze on beer and spirits in the last budget likewise saw revenues rise 2.4% and 1.7% respectively, but duty was raised again a year later.

But the government’s own Alcohol Duty Bulletin recently pointed out that, in the six months following the duty rise, there was a slump in wine buying which led to a 2.1% drop in revenue to the Exchequer from £2.5 billion to £2.4 billion.

At that rate of decline, the Treasury stands to make £93 million less in 2019 than it did in 2018.

Beale said: “Duty rises are bad for consumers, bad for business and bad for the Exchequer, as the Government’s own figures clearly show. After wine was singled out for a duty rise wine revenues have fallen on the previous year, in line with a slump in wine sales.

“We recognise the fact that alcohol duty is an important revenue stream for Government to fund public services, which is precisely why we are calling for a 2% duty cut on wine and spirits. A cut will not only boost Treasury coffers but also bring a boost post-Brexit to British businesses and consumers, whereas another rise will have a negative impact on all three.

“If the government chooses to increase what are already some of the world’s highest alcohol tax rates, it will not only push up prices for people who voted them in but also hit hard an industry that prides itself in flying the flag for brand Britain.

“We agree it’s time for government to change the UK’s unfair, outdated and restrictive wine and spirit duty regime. However, the Chancellor should pre-empt reform with a duty cut.”