Spirit makers have attacked Keir Starmer over his tax raid on their industry – undermining his boast that his trade deal with India delivered a major boost.
The Prime Minister said that after the deal, distillers’ ‘only concern now is whether they can produce enough to sell’.
But members of the UK Spirits Alliance, which represents 280 large and small drinks producers and bars, say higher taxes mean increasing exports is a ‘pipe dream’.
Duty on gin – which is the UK’s favourite spirit by volume sales – increased by 3.65 per cent in February, after a 10.1 per cent increase in 2023, the trade body says.
The latest hike was introduced in Chancellor Rachel Reeves’s tax-raising Budget in October, alongside increases to the national minimum wage and employer National Insurance contributions.
Although Starmer’s deal with India has halved tariffs on UK whisky and gin from 150 per cent to 75 per cent, his comments last week have infuriated distillers.
Hands on: Spirit makers have attacked Keir Starmer over his tax raid on their industry – undermining his boast that his trade deal with India delivered a major boost
Karl Mason, director of Masons Gin in Aiskew, North Yorkshire, said: ‘This claim from the Prime Minister is nonsense. Here in Yorkshire, we would love to take advantage of the new deal with India. Sadly, we can’t.
‘The situation at home is dire: taxes are through the ceiling; we’re being hamstrung by a raft of regulations around things such as sustainability; and there is a constant talking down of our sector.
‘We can’t succeed abroad if we’re barely able to survive at home.’
Spirits are the highest-taxed type of alcohol in the UK, with 70 per cent of the cost of an average bottle going to the Exchequer’s coffers, the UK Spirits Alliance says.
Stephen Russell, founder and manager of Copper Rivet Distillery in Chatham, Kent, said: ‘The high taxes we face at home makes the significant investments needed to build exports abroad a pipe dream.
‘We need a fair tax regime at home in order to truly benefit from trade deals.’
And Kevin Hollinrake MP, Conservative levelling up spokesman, said: ‘Keir Starmer’s claim that distillers’ only problem is how they produce more is for the birds.’
Edward Bailey, director of Tors Vodka, of Okehampton in Devon, also called for a ‘fairer and stable alcohol duty system’ which ‘recognises the vital contribution businesses like mine make to jobs, communities and growth’.
He added: ‘Consistent regulatory measures here in the UK are essential for encouraging investment, supporting innovation and distilling long-term economic growth.’
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