Chancellor Rachel Reeves recently delivered her Spring Statement but did not address pleas from the wine and spirits industry to cut tax duties. Industry leaders and opposition MPs were left disheartened as Reeves announced significant welfare spending cuts amounting to £4.8 billion, alongside a crackdown on tax avoidance expected to save £1 billion.
This declaration followed a concerning report from the Office for Budget Responsibility (OBR), which projected only a 1% growth in the UK GDP for 2025, a downgrade from a previous forecast of 2%. Factors such as US President Donald Trump’s tariffs have been cited as threats to the UK’s economic growth.
In response to the grim economic outlook, Reeves outlined her plans to decrease the deficit from £36.1 billion in 2025/26 to a projected surplus of £9.9 billion by 2029/30. These measures are forecasted to enhance government revenue by £15 billion over the next decade.
However, individuals involved in the wine and spirits sector anticipated a potential uplift from the Spring Statement; they were met with disappointment as Reeves made no mention of alcoholic beverages. SNP MP Graham Leadbitter, representing a constituency with many Scotch whisky distilleries, described the Spring Statement as a critical opportunity for the Chancellor to address the harmful tax policies impacting the whisky industry.
Last month, tax duties increased in line with inflation, resulting in a 3.65% rise on Scotch whisky. Despite calls for relief, Reeves opted not to amend these tax policies. Leadbitter expressed frustration, stating that the government’s actions negatively affect the whisky sector, leading to substantial revenue losses for the public purse.