A cut in alcohol tax on spirits ‘would raise more cash for Treasury and help economy’

CUTTING the duty paid on whisky and gin would lead to an overall increase in revenues and help boost the economy, according to a think tank co-founded by Margaret Thatcher.

A report by the Centre for Policy Studies (CPS) identifies the alcohol duty on spirits as a key levy that the Government can cut to “help family finances.”

Currently, drinkers can pay more than £10 in alcohol duty and VAT on a £14 bottle of spirits, and charities are lobbying for the tax to be increased further, on health grounds. But Nick King, the CPS head of business, said past spirits-duty freezes had led to increased exports and investment for the UK.

Speaking ahead of the launch of a report on Thursday, Mr King said: “We will show that tax cuts don’t necessarily mean a loss of revenue for the Treasury.

“When spirits duty was frozen in November 2017, and again the following year, revenues rose significantly. The knock-on benefits of increasing exports, investment and customer satisfaction are great examples of the incredible impact a cut in spirits duty could have. The Government should seriously examine the potential for a cut in spirits duty as part of the forthcoming alcohol duty review. In the meantime, the duty should – at the very least – continue to be frozen.”

The CPS report follows research carried out with the UK Spirits Alliance, an industry body.

The Alcohol Change UK charity insists that an increase in taxes is needed to reduce the consumption of alcohol, at a time when rates of alcohol-related illness, injury and death are “stubbornly high”.

But a spokesman for the UK Spirits Alliance said: “Lowering spirits duty has proven to deliver more jobs, more cash for the Treasury and economic growth across the country.”