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Chancellor urged to unlock billion pound boost

Created: 20 February, 2014

Chancellor George Osborne will today be given five reasons to scrap the controversial Alcohol Duty Escalator and create a £1 billion economic boost to the economy.

The Call Time On Duty campaign – a coalition led by the Wine and Spirit Trade Association (WSTA), the Scotch Whisky Association and the Taxpayers’ Alliance – wrote to the Chancellor ahead of the Budget, and met with Nicky Morgan, Economic Secretary to the Treasury to discuss the campaign.

The campaign argues that the escalator – which will increase duty on wine and spirits by inflation plus an additional two per cent – actually creates less revenue for the Government than if it were dropped.

Independent research by Ernst and Young collated by the campaign found that removing the escalator will:

1.Lead to an increase in the industry’s contribution to Economic Activity from £43.2bn to £44.2bn – a one billion pound boost for the economy.

2.Create at least 6,000 additional jobs

3.Increase public finances by £230 million in 2014, rising to £265 million in 2018

4.Lower the incentive for alcohol fraud – currently estimated by HMRC as costing £1 billion a year

5.Provide some relief for hard-pressed UK consumers – who currently pay more in alcohol duty than consumers in Germany, France, Italy, Spain and Poland combined

Miles Beale, chief executive of the WSTA said: “George Osborne can give businesses – many of them small businesses – a helping hand without losing anything. Scrapping his inflation-busting alcohol super tax at the 2014 budget would boost public finances by £230 million and create thousands of jobs. This is about looking at the facts and making the decision that is best for the country.”

Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: “Many responsible drinkers aren’t aware that they pay four times the duty of their German counterparts for the same drink. Duty escalators are a hugely unfair tax that hit the least well-off the hardest. Given that the evidence overwhelmingly suggests scrapping the escalator will boost the public finances, calling time on duty should be a no-brainer for the Chancellor.”

The ‘Call Time on Duty campaign wants supporters to email their local MP and ask them to write to the Chancellor through the – calling for the alcohol super tax to be scrapped in the upcoming Budget.

Additional Facts and Figures

  • The Alcohol Duty Escalator increases duty on all alcohol products (expect beer since 2013) by 2% above inflation every year.
  • 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 £40bn of economic activity in the UK.
  • In 2012, the wine and spirit industry contributed a total of £14.5bn 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. (Ernst and Young 2013 )