UK government group 'cautiously optimistic' on wine tax rise

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  • Wednesday 25 March 2009

Members of Parliament and the drinks industy are cautiously optimistic that the government will listen to their concerns about tax rises damaging the drinks industry.

Andrew Dinsmore

The All-Party Parliamentary Wine and Spirit Group, made up of MPs and members of the House of Lords launched its report into the effect of tax rises in Westminster last night (Tuesday).

The All-Party Group committee, which included Decanter editor Guy Woodward as an advisor, met at the House of Commons in February to discuss the impact the recent tax increases have had on the wine trade, and to quiz prominent members of the industry.

All-party groups – whose reports carry no formal weight in government – depend for their success on the strength of their arguments.

Most members of the group told decanter.com they were confident their arguments were good enough.

Peter Bottomley MP said, ‘We’re asking the Treasury to freeze duty and we’re saying that they will get more revenue than if they don’t freeze.’

Group chairman Andrew Dismore MP (pictured top with the report outside the Houses of Parliament) said that was the ‘real issue’ – as set out in the closing paragraphs of the report. ‘By scrapping the planned duty rise announced in the 2008 budget, the government would stimulate a “feel-good” factor…stimulating sales.’

Alf Dubs, a member of the House of Lords, said there was a ‘fair chance’ the government would freeze duty. ‘I’m cautiously optimistic,’ he told decanter.com.

It was left to Christopher Carson, head of Italian giant GIV’s UK operation, and chair of the Wine and Spirit Trade Association, to sound a more pessimistic note.

‘It’s unlikely the tax escalator is going to come off as the government is not going to want any more u-turns.’

Carson also talked about the mood in the wider industry.

‘I’m genuinely concerned. There is no real optimism anywhere in the industry. Another tax increase will only see a big increase in unemployment and closure of wine companies.’

A spokesman for the WSTA said, ‘The report from the All Party Group speaks volumes for the difficulties facing the wine business following the excessive increases in excise duty over the past year.

‘With more wine trade job losses likely and revenue from excise duty lower than Treasury forecasts the last thing the Chancellor should be doing is going ahead with the tax escalator on alcohol.’

The Spring Budget is on 22 April.

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