50p tax rate cut would secure on-trade jobs

Published: 29 November, 2011

A cut in the 50p tax rate would help secure jobs in the on-trade, according to the latest edition of the Wilson Drinks Report, WDR.

The implications of UK economy of losing a single executive is about £3 million over 10 years, which would impact on those who work in pubs, clubs and bars, said Tim Wilson, managing director of WDR.

Whilst there has been a big political debate about the merits of the 50p top rate of income tax, few analysts or commentators have actually looked at the implications of highly paid executives spending less of their money in the UK, he added.

The WDR analysis considers the case of a City executive on £500,000 pa who decides to leave the UK and work overseas in a lower tax regime.

Using simple approximations for tax, National Insurance and the amount of net pay that is spent in the on trade, WDR estimates that the direct cost to the UK economy.

Wilson, said: "Like most free marketers, I am not a fan of high rates of tax.

"The specific impact for the on trade is huge - we estimate that a single executive could spend up to £0.5 million over a 10 year period on going out."

Wilson added the figure is likely to be even higher if the impact of the executive's spend on drink funded by corporate expenses is taken into account.

"Just imagine how many new jobs could be secured if we not only stopped our highest paid executives from going abroard, but made the UK much more attractive for wealthy businessmen, entertainers and sports stars to come and work here instead.

"We still seem to be embarrassed in this country about success and wealth, but I for one believe that we need as many millionaires as possible to live here to help our on trade businesses get back into growth.

"Independent off licences will benefit hugely as well."

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