FDBusiness.com

Scrapping the Government’s alcohol duty escalator (ADE) would boost public finances by over £230million and create 6,000 new jobs, a new report reveals. The Ernst & Young (EY) research has been published by the WSTA (Wine and Spirit Trade Association) and coincides with the launch of a ‘Call Time on Duty’ campaign www.calltimeonduty.co.uk urging the Chancellor to be fair and end his alcohol super tax by introducing a freeze on alcohol duty.

Introduced in 2008, the ADE has increased the tax on alcohol by 2% above inflation every year and, under current plans, is due to do so again in the 2014 Budget.

Whilst beer was removed from the duty escalator in the 2013 Budget, tax on wine has increased by 50% and tax on spirits by 44% since 2008.

Since George Osborne became Chancellor, tax on wine and spirits has increased by a staggering 25%. In total, tax now accounts for 79% of an average priced bottle of spirits and 57% of an average priced bottle of wine.

According to the EY report, employment growth in the sector has been steadily declining since the introduction of the alcohol duty escalator. The report found that if the Chancellor was to scrap the alcohol super tax in the next Budget it would lead to a £230 million increase in the wine and spirit industry’s contribution to public finances, rising to £265 million in 2018, and almost 6,000 UK jobs would be created in 2014 alone.

The ‘Call Time on Duty’ campaign will urge responsible drinkers to email their local MP and ask them to write to the Chancellor through the www.calltimeonduty.co.uk website that calls for the alcohol super tax to be scrapped in the upcoming Budget.

Under current Government plans the alcohol duty escalator is set to run until 2015.

The EY report found:

* The wine and spirit industry directly or indirectly supported 475,000 jobs in the UK in 2012, with the majority (69%) directly dependent on the industry’s activity.

* In 2012/13, the wine and spirit industry directly or indirectly supported over £40 billion of economic activity in the UK.

* In 2012, the wine and spirit industry contributed a total of £14.5 billion to Her Majesty’s Treasury (HMT).

* Employment in the wine and spirit industry is expected to increase by over 6,000 if the escalator is scrapped.

The ‘Call Time on Duty’ campaign is being supported by the Wine and Spirit Trade Association, the Scotch Whisky Association and the TaxPayers’Alliance. 

Miles Beale, chief executive of the Wine and Spirit Trade Association, says: “The report by EY shows that scrapping the alcohol duty escalator in 2014 could benefit the economy to the tune of £230 million in public finances and create an extra 6,000 new jobs. This shows that the alcohol duty escalator is bad for consumers, bad for 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.”

Jonathan Isaby, political director of the TaxPayers’Alliance, says: “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.”