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Scrapping duty escalator will raise £230m and 6,000 jobs says WSTA's new Call Time on Duty campaign

The Wine & Spirit Trade Association is today ramping up the pressure on the governement to scrap the alcohol duty esclator by claiming it would generate £230 million and create 6,000 jobs if it was dropped before the 2014 budget.

The attention grabbing figures are the central plank of the WSTA's new Call Time on Duty campaign which hopes to galvanise the support of average drinkers to put pressure on MPs and the government to see the commercial benefits scrapping the duty escalator would have as well as highlight the continued economic damage above inflation duty rises are having on an industry that is major success story for British business. 

It is today, along with the Scotch Whisky Association and TaxPayers Alliance, calling on the public to write to their local MP and persuade the government to think again. It has set up a new website www.calltimeonduty.co.uk where people can send a letter direct to their MP which calls on the Chancellor George Osborne "to be fair" and end what the WSTA describes as its "super tax" on alcohol duty.

Harpers Wine & Spirit has linked up with the WSTA campaign to give members of the UK wine trade the chance to have their voice heard with a similar letter that individuals or businesses can send to their local MP setting out the damage that duty is causing their businesses. This will be available on Harpers.co.uk shortly.

Similarly wine and spirit producers can sign a letter that sets out the concerns they have about the high duty rates in the UK and the real danger that they might be forced to effectively "call time on the UK" if something is not done to lower the duty threshold and make doing business in the UK more cost effective. This will also be available on Harpers.co.uk shortly. 

Miles Beale, chief executive of the WSTA said: "Today's 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. People who want to make their voice heard can email their MP at www.calltimeonduty.co.uk."

Jonathan Isaby, political director of the TaxPayers' Alliance, explained why it was joining the campaign: "It is shocking that most of the price we will pay when buying our favourite tipple this Christmas will go straight to the taxman. If you want to leave a festive brandy out for Santa as he delivers the presents on Christmas Eve, you'll have to buy another four for George Osborne. 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."

The WSTA first announced at its industry conference in September that it was to make the economic, consumer and trade argument that the duty escalator is not only damaging the drinks industry and British business, but is also hitting consumers at a time when cost of living is such an issue.

It commissioned a report from accountants, Ernst & Young, which has found that employment growth in the drinks sector has "been steadily declining since the introduction of the alcohol duty escalator," argued the WSTA. 

"The report found that if the Chancellor was to scrap the alcohol super tax in the next Budget it would lead to a £230m increase in the wine and spirit industry's contribution to public finances, rising to £265m in 2018, and almost 6,000 UK jobs would be created in 2014 alone," added the WSTA.

Call Time on Duty

The WSTA makes clear that 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". This will go over 80% on a bottle of wine and 60% for a bottle of spirits if the escalator is introduced in 2014.

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

Key findings in the Ernst & Young report include:

*  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.

You can access the full EY report in the Insights section of Harpers.co.uk here.

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