Distillers fear Rachel Reeves will hike spirits duty to alleviate Budget bind

This came as part of a triple-whammy, alongside National Insurance contributions rising and the minimum wage going up.

Now, distilleries fear another tax hike could be on the cards with the Chancellor desperately searching for ways to plug a multi-billion pound black hole in the public finances.

The Institute for Fiscal Studies (IFS) warned earlier this month that Ms Reeves could need to find £22bn of tax rises or spending cuts if she is to restore the £10bn of headroom she left herself against her debt targets in the spring.

That gap is the result of higher borrowing costs, more persistent inflation and weaker growth, along with spending commitments such as partially reversing the cut to winter fuel payments and watering down its plans to cut welfare.

Ms Reeves will hope that better-than-expected inflation figures and a slight improvement in some growth forecasts will help ease the pressure.

But the gap could be even bigger than feared, following media reports that the Office for Budget Responsibility is preparing to downgrade its productivity forecasts by 0.3 percentage points.

Ms Reeves said she was “determined that we don’t simply accept the forecasts but we defy them” and would not “relitigate the past or let past mistakes determine our future”.

Small distilleries in Yorkshire are desperate to avoid another tax hike, which could threaten their survival.

Piers Moat, director at Twisted Roots Distillery Ltd, near Bridlington, said this could be “the last straw for many small distilleries”.

“We have no choice but to pass on the cost of any tax increases to the consumer.

“Alcohol sales, in general, are already declining along with general consumer confidence.

“Many small distilleries have had to close their doors. We are lucky enough to be able to diversify our property, but others will not be so lucky.”

This week, Labour MP Carolyn Harris launched a report alongside the UK Spirits Alliance, a coalition of 280 distilleries across the country, looking at the impact another tax hike would have on the industry.

She told The Yorkshire Post that she was “making the proper Parliamentary representations to make sure we do get the point across” to the Chancellor.

“It’s not just important to the industry, which is thriving, exciting and vibrant, but also those working in the industry,” Ms Harris explained.

“We talk about growth and we talk about encouraging entrepreneurship - if we don’t give people the tools to be able to do that then we’re stifling growth and we’re stifling entrepreneurship.”

Ms Harris said the distilleries were more than just businesses but part of the community.

“The pub and the socialising aspect are lifesavers for some people,” she said.

“They are somewhere to go for people to be with. In order to allow them to be vibrant we have to give them every help we can.”