New Labour MP Urges Rachel Reeves To Protect Spirits Industry In Budget
3 min read
A Labour MP has urged Chancellor Rachel Reeves to protect the spirits industry in this week's Budget, warning that the hospitality sector is already “struggling to cope” with the alcohol duty increase brought in under the previous Tory government.
Adam Jogee, Labour MP for Newcastle-under-Lyme, said the 10.1 per cent hike to alcohol duty in August last year was "counterproductive and detrimental to our economy".
Writing in The House ahead of the Budget on Wednesday, he said: "Last year’s duty hike was intended to increase revenue for the Treasury. Yet, it has had the opposite effect, resulting in a £298m loss in alcohol duty receipts over the past year."
The Labour MP said the health of the British hospitality sector is "intrinsically linked" to the prosperity of the spirits industry, citing recent UK Spirits Alliance (UKSA) research which found that 16 per cent of publicans believe they may not be able to stay open for another year.
UKSA has called on the new Labour Government to reverse what it has described as "the damaging duty increase" brought in by the previous Conservative administration.
Jogee on Monday urged Reeves to give the spirits sector the "right support".
"Pubs, bars, and restaurants depend on spirits sales to generate revenue and keep their doors open," the newly-elected MP wrote.
"In fact, spirits typically provide a higher profit margin per serving than other alcoholic beverages, making them a crucial part of the business model for many establishments."
He added: "We have made growth the central part of our mission in government, to fix the foundations of the UK economy and kickstart a decade of national renewal.
"Promoting productivity and growth in small businesses is key to this, and the British spirits industry is a fantastic example, with businesses starting in kitchens up and down the country now exporting their products across the globe."
Jogee's remarks come as four major spirits organisations have written to Reeves urging her to "reverse the economic and business damage caused by your predecessor’s record increase in domestic excise duty last August".
In a letter seen by PoliticsHome, UKSA, Scotch Whisky Association, English Whisky Guild and Drinks Ireland say spirits produced and sold in the UK "remain subject to the highest level of spirits duty in the G7 and the fourth highest rate in Europe – double that of France, and four times the duty rates of Spain and the United States".
They add: "The duty increase has harmed businesses – not only drinks producers but a hospitality industry still trying to recover from the challenges of recent years.
"According to recent research from Survation, one-in-four pubs have seen a distillery that supplies them go out of business, while 9,000 pubs are themselves unlikely to be open in 12 months’ time."
Hilary Whitney, Co-Founder of north London’s Sacred Spirits, said her business is one of many nationwide that has "struggled to stay afloat" in recent months amid "record levels of inflation, soaring energy prices and a cost of living crisis".
She said the Treasury has the opportunity to undo the "mistakes" made by her Tory predecessors when she delivers the Labour Government's first Budget since winning power on Wednesday.
"The level of duty on the goods we produce stem the ambitions of many who simply can’t afford the costs of doing business," she told PoliticsHome.
"It is also heaping pressure on consumers who want to go out and enjoy the premium drinks and experiences on offer but are struggling to enjoy them as the cost of living spirals upwards. It’s time for change."
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