MPs warn of job losses if tax goes up

The All Party Parliamentary Wine and Spirits Group has added its voice to calls to the Chancellor demanding alcohol taxes are not increased.

With the Budget just weeks away the group of MPs and peers has released a report which shows that thousands of jobs will be at risk if excise on duty and spirits is increased further.

Through oral evidence and written submissions from industry leaders, the group found evidence that tax is having a substantial impact on the UK's wine industry.

Co-chairman of the All Party Wine and Spirit Group Geoffrey Clifton Brown MP said: "The government should look closely at the impact that successive tax increases are having on the UK wine industry.

"There is a real risk that major parts of this important UK industry will be lost in the economic downturn."

The report indicated that as well as jobs being under threat the combination of recession, tax increases, and exchange rates is leading to less consumer choice in the UK.

Warning of the risk to the UK wine market, Troy Christensen, president of the European arm of Constellation, said that the British system of tax and regulation was unusual.

"One of the things businesses don't like is uncertainty.

"The model that has been developed in the UK - that there is uncertainty and annual tax increases - is a model that isn't followed anywhere else in the world.

"So it's pretty hard as someone trying to grasp investment from a corporate parent to suggest the UK is the right place to invest when there is a significant amount of uncertainty."

Alcohol tax increased by 17 per cent last year and due to the 'duty escalator' is set to rise again by two per cent at the Budget on April 22.

Last week representatives of various drinks trade groups, including the British Beer & Pub Association, met with Chancellor Alistair Darling to discuss the impact increased duty was having on the trade.