Spring Statement: No relief for wine and spirits industry

Industry leaders and opposition MPs urged the chancellor to ease the tax burden on the drinks trade, but those calls fell on deaf ears.

Reeves used her statement – dubbed an ‘emergency budget’ by shadow chancellor Mel Stride – to announce £4.8bn in cuts to welfare spending.

She also revealed plans to save an extra £1bn by cracking down on tax avoidance, while she said that an increase in defence spending will be funded by cuts to foreign aid.

The measures followed a new report from the Office for Budget Responsibility (OBR), which now expects UK GDP to grow by just 1% in 2025.

The budget watchdog had previously forecast 2% growth this year, but it was slashed after the OBR warned that US President Donald Trump’s tariffs will threaten UK growth.

Reeves said she is ‘not satisfied’ with that figure, so felt the need to take drastic action. She expects to move from a deficit of £36.1bn in 2025/26 to a surplus of £9.9bn by 2029/30.

The OBR suggested that her policies could add £15bn to the economy’s income over a 10-year period, meaning she has now restored the government’s headroom.

However, any wine and spirits industry insiders hoping for a boost during the Spring Statement were left disappointed, as Reeves didn’t mention alcoholic drinks in her statement.

SNP MP Graham Leadbitter, whose constituency covers one-third of Scotch whisky distilleries, had called the Spring Statement a ‘last chance saloon for the chancellor to end Westminster’s damaging tax raid on Scottish whisky and finally give the industry some badly needed relief as it faces the threat of tariffs.’

Duty increased in line with inflation last month, meaning Scotch whisky was hit with a 3.65% tax rise, but Reeves declined to reverse that policy.

Leadbitter said that ‘Westminster has shown itself to be no friend of the whisky industry’ and added that ‘successive Westminster tax raids on Scottish whisky don’t just have the industry over a barrel, it is actually costing the public purse hundreds of millions in lost revenue’.

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