London businesses and politicians have called on the government to scrap a planned hike in alcohol taxes to give the capital’s hospitality sector a boost.
Pubs, producers, MPs and retailers joined the TaxPayers' Alliance and the Call Time on Duty campaign to call for the Alcohol Duty Escalator (ADE) to be scrapped in next week's Budget.
Currently the Government is planning to use the escalator to increase duty on wine and spirits by two per cent above inflation, despite evidence that abolishing the escalator would actually increase revenue to the Exchequer. Independent research by Ernst &Young has found that scrapping the escalator would generate £230 million extra for the public finances in 2014, contribute £1 billion in additional economic activity and create over 6000 new jobs.
Jonathan Isaby, chief executive of the TaxPayers' Alliance, said: "London is the engine of Britain's hospitality sector. Punitive tax rates are strangling the growth ambitions of businesses across the capital and hurting hard-pressed taxpayers. Given that the evidence overwhelmingly suggests that scrapping the escalator will boost the public finances, calling time on the Alcohol Duty Escalator should be a no-brainer for the Chancellor."
Sunnil Panjabi, owner of the Punch Tavern in Fleet Street said: "We are always hearing how politicians want to help pubs. Then every year without fail they land us with an enormous tax bill. If we were able to keep things as they are for the next 12 months it would be great for our business and help us to plan and invest for the future."
Ian Hart, Founder of London-based Sacred Spirits Company said: "The current duty escalator regime couldn't be better calculated to put small and start-up distillers out of business. There is an emerging craft spirits sector in the UK that is good for the economy. We are exporters - but domestic UK business is how we raise the funds to attend international trade shows, for example."
Michael Saunders, Managing Director of independent drinks supplier Bibendum Wine Ltd said: "The entire industry is being held back by a punishing tax regime. Everyone in hospitality, from suppliers to pubs to restaurants to producers, should rally behind this campaign. It can only be good for London."
Paola Tich, founder of Acton neighbourhood wine shop Park+Bridge said: "When my customers learn how much they are paying in tax compared to the French, Spanish or Italians they can't believe it. If the duty goes up again, it'll become ever harder to provide a quality product at a fair price. The Government should be supporting independent retailers and recognise their contribution to the economy by scrapping this punitive tax."
Tim Luther, co-owner of restaurant and Sherry specialists Drakes Tabanco in Fitzrovia said: "This tax is bad for business and growth in our sector as a whole. It is crazy to think that 57% of the cost of wine is attributed to over-the-top taxation. Sherry wine, which my restaurant specialises in, and which in my mind is the best wine to pair with food, is taxed at an even higher rate. Our customers sip and savour rather than swig Sherry - and responsible drinkers should not be penalised for enjoying a drink with their food."
Jim Fitzpatrick, Labour MP for Poplar and Limehouse said: "The Alcohol Duty Escalator was introduced for good reason but the time has come to end it. The evidence is clear that getting rid of it will actually boost public finances. It will boost London businesses - not just in my constituency but throughout the capital. And it will protect consumers from escalating taxes that can only hit the poorest hardest."
Miles Beale, Chief Executive of the Wine and Trade Association, said: "The Alcohol Duty Escalator is bad for business, bad for the economy and bad for consumers. Scrapping it would be good for all three and would help the Chancellor do what he says he cares about most - driving down the deficit. We know from speaking to our members, particularly the SMEs, that it would also help the Chancellor's next great concern: investment. Inflation-busting tax increases year-on-year have decimated their confidence to invest. Freezing alcohol duty would go a long way to helping firms in this great British industry meet their potential - which would mean more jobs and increased exports. "
The 'Call Time on Duty' campaign wants supporters to email their local MP and ask them to write to the Chancellor through www.calltimeonduty.co.uk - calling for the alcohol super tax to be scrapped in the upcoming Budget. People just need to know their own postcode, not the name of their MP.
