Scots support calls for cut to whisky tax in budget

More than two-thirds of Scottish people want the Chancellor to cut taxes on whisky, according to a survey.

Published 9th Nov 2017
Updated 21 st Sep 2023

Duty rates on the spirit currently make up 80 per cent on an average-priced bottle after being raised by 3.9 per cent in March.

A questionnaire carried out for the Scottish Whisky Association found 68% believe Philip Hammond should now reduce taxes in his next Budget.

Karen Betts, chief executive of the association, said: "We are urging the Chancellor to use the Budget to cut tax on Scotch and back this global success story.

"The Westminster Government has a real chance to show it is fully behind a leading UK manufacturing and exporting industry at a vital time, and fully behind the jobs and communities in Scotland that the industry supports.

"Using the Budget to Drop the Dram Duty will give Scotch the support it needs to go from strength to strength."

According to the group, whisky adds £5 billion to the economy each year, is worth £4 billion in exports and supports more than 40,000 jobs across the UK.

More than 90 per cent of the spirit is exported, meaning companies do not have to pay alcohol duty on these sales.

However, since the duty rise in the Chancellor's last budget, sales have fallen by one million bottles.

Revenues were also down 7 per cent year-on-year in the first three months after the increase.

An HM Treasury spokeswoman said: "We recognise the importance of the Scotch whisky industry. In the UK, tax on a bottle of Scotch is 90p lower now than it would have otherwise been, thanks to duty freezes and cuts introduced in the last three years."
A total of 1,004 adults in Scotland took part in the survey between October 21 and 24.

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Of those, 64 per cent said the UK Government should do more to support the industry, with just 15 per cent saying enough was being done.

Among potential policy announcements, lowering the level of duty on the spirit was the most supported of the three policies tested, with 62 per cent supporting a duty cut

Mr Hammond is due deliver his Budget on Wednesday, November 22.

Conservative MP for Moray, Douglas Ross, said: "The Scotch whisky industry is hugely important to Moray as well as the entire county. I was deeply concerned about the impact of the duty rise introduced by the Chancellor in the last Budget, and hope he has carefully considered the impact of any further changes in the coming weeks.

"Along with colleagues, I have been lobbying the Government to protect this important industry, and hope the strong case which has been presented by the industry and politicians will be taken into account in the Budget this month."

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Fellow Tory MPs Kirstene Hair and Bill Grant suggested cutting duty could actually increase the tax take for the Treasury, amid warnings a tax rise has coincided with one million fewer bottles of Scotch being sold.

Treasury minister Andrew Jones said the Government would continue to support the industry, but warned the Chancellor was facing tough choices over the public finances ahead of the Budget.

Speaking in a Westminster Hall debate on the future of the Scottish whisky industry, Moray MP Mr Ross added: "On the point of taxation, would he agree with me that the Treasury should actually be looking at the benefits of reducing the taxation, because actually the Scotch Whisky Association, with the independent back-up of KPMG, have actually shown that by reducing the duty on Scotch whisky, you increase the revenues going to the Treasury."

Angus MP Ms Hair also added: "We have the fourth highest excise rate in the EU.

"Other EU countries do support their home industries, and I think we too, even more so now, need to follow suit."

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Mr Grant (Ayr, Carrick and Cumnock), meanwhile, said reducing corporation tax had been successful in increasing the tax take.
"We're minded to further reduce the corporation tax to achieve the same role," he added.

"Do you think that would also apply to the reduction in duty on spirits, and maybe generate an increased tax take as per the corporation tax?"

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