We’ll all drink to that Philip!
Massive boost for industry after hard fought battle by Scottish Conservatives
WHISKY drinkers raised a toast to the Chancellor last night after he froze duty on Scotland’s national drink for a second year running.
Philip Hammond caved in to intense lobbying from within his own party to resist hiking tax on spirits, including Scotch whisky.
Drinks manufacturers and distilleries last night hailed his decision as a victory for the industry and consumers – as well as struggling pubs and restaurants.
Scots Tories had lobbied fiercely for the whisky industry ahead of yesterday’s Budget, with the Chancellor believed to be looking to increase some taxes to help fund a flagship £20billion pledge to boost the NHS on its 70th birthday.
They urged him to show support for the sector at a time when it faces uncertainties relating to Brexit.
Yesterday Mr Hammond confirmed that the duty freeze would remain in place for spirits including whisky, as well as for beer and cider. told the Commons it would mean we can ‘all afford to raise a wee dram to Ruth Davidson and her new arrival’ – a reference to the recent birth of the Scottish Tory leader’s baby son, Finn.
It is understood that Miss Davidson made a direct plea to Mr Hammond ahead of the Budget.
A Tory source yesterday claimed it was a ‘relief’ to hear the Chancellor’s announcement, describing recent meetings with him as a ‘genuine battle’.
The Scottish Conservative gains in the 2017 general election were crucial in keeping Mrs May in Downing Street – but growing pressure around a possible extension to the UK’s membership of the hated Common Fisheries Policy (CFP) following Brexit is understood to have led to tensions.
Karen Betts, chief executive of the Scotch Whisky Association, said: ‘The Chancellor has made the right decision for the public finances, the industry and for consumers.
‘The continuation of the duty freeze is a very welcome show of support for the Scotch whisky industry, which plays an important role in the UK and Scottish economies and which is one of the UK’s most successful exporters.
‘Time after time, the industry has shown that a stable rate of tax both boosts government revenue to help support vital public services and creates an environment which encourages investment in future growth.
‘We have welcomed the support shown to the industry by the politicians from across the UK and the political spectrum who have backed our campaign and have stood up for the industry and the communities it supports.
‘We welcome, too, the sound course set today by the Chancellor, which supports the industry’s global competitiveness, nurtures growth and backs jobs and investment.’
Scotch whisky generates almost £5billion a year for the UK economy, supports more than 40,000 jobs across Britain and directly contributes more than £3.2billion to the Scottish economy.
In 2015, a 2 per cent cut to spirits duty led to a £123million increase to the sector’s contribution to the Treasury, totalling £3.15billion.
Scottish Secretary David Mundell said: ‘The freeze on spirits duty will be a boost to Scotland’s whisky industry, and freezing beer duty will support large and small brewers across Scotland.’
Charles Ireland, general manager for drinks company Diageo Great Britain, Ireland and France, said: ‘We are delighted to have a Chancellor who wants to help drinkers of Scotch, gin, and our hardpressed pubs.
‘Philip Hammond has listened to the industry and his Scottish colleagues, and today has acted to support our world-beating spirits industry.
‘We thank those within the party of Government who have made the case for ScotHe
‘Welcome show of support’
‘Stood up for industry jobs’
land and stood up for the 50,000 jobs this industry supports, with particular thanks to Secretary of State for Scotland David Mundell, Ruth Davidson and the Scottish Conservatives.’
The freeze means that the duty rate on spirits remains £28.74 per litre of pure alcohol. Of the £14.15 average price of a bottle of whisky, £10.41 is collected in taxation through excise duty and VAT.
The tax burden remains at 74 per cent, or £3 in every £4 spent on the average-priced bottle of whisky in the UK.
Scottish Conservative MP Douglas Ross said: ‘The freeze means we will continue to see investment from the whisky industry across the UK, which will bring benefits to the wider economy through exports, tourism and hospitality.’