On the evening of 22 November chancellor Philip Hammond will perhaps want to relax with a glass of wine after delivering his second Budget of the year, but putting his feet up may be a little harder after the latest intervention from the British wine trade.
In a letter to Hammond and environment secretary Michael Gove published today the Wine and Spirit Trade Association (WSTA) has pushed the chancellor to scrap planned tax rises on English and Welsh wines.
The chancellor is already under massive political pressure to ease increasingly unpopular austerity in government spending. At the same time he is facing squeezed elbow room as the Office for Budget Responsibility cuts productivity forecasts, reducing the amount of tax the government is predicted to take in over the coming years.
In this context revenue-raising measures which do not add to headline income tax rates will be increasingly attractive for the Treasury as it tries to balance the books. So-called sin taxes – those on products deemed as vices, such as alcohol – are particularly easy to implement politically.
The WSTA says any increase in wine duty will restrict growth of the industry and “is damaging to rural communities”.
Duty on wine rose by 3.9 per cent in March’s Budget, adding 8p to the price of a bottle of still wine and 10p to sparkling wine, according to the WSTA. Another increase of 3.4 per cent is planned in November, adding another 7p to still and 9p on sparkling.
Sparkling wine faces heavier duty than still, at £2.77 per bottle compared to £2.16 for the latter.
Miles Beale, WSTA chief executive, said: “English wine is a great British success story and we are now producing top quality wines for the home market as well as to export.
“The UK has the potential to follow in the footsteps of New Zealand’s trail-blazing wine success story, yet the industry is being held back by the staggering amount of duty it has to pay. By adding to its already high tax bill this year, the chancellor will hurt the industry's ability to grow, invest export and create jobs.”