Scotch whisky sector breathes sigh of relief as duty on spirits frozen again
● Beer also escapes rise, but wine is hit by inflation-rate hike in tax – while cigarette duty continues to be hardest hit
The decision to freeze duty rates on spirits has been welcomed by the Scotch whisky industry which had warned a rise in line with inflation would hit investment and jobs.
Fears that the Chancellor had been planning a 3.4 per cent hike to spirit duty after a freeze last year had sparked a cross-party campaign in Scotland to protect hundreds of millions of pounds worth of investment in an industry that directly employs around 10,000 people in Scotland.
Charles Ireland, GB general manager for Diageo, Scotland’s biggest Scotch distiller, said: “We are delighted to have a Chancellor who wants to help drinkers of Scotch, gin, and our hard-pressed pubs. Philip Hammond has listened to the industry and his Scottish colleagues, and has acted to support our world beating spirits industry.”
The Scotch Whisky Association (SWA) also welcomed the Chancellor’s decision, although pointing out that the tax burden remains at 74 per cent, or £3 in every £4 spent on the average priced bottle of Scotch in the UK being tax.
Karen Betts, SWA chief executive, 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. However, the ‘Scotch Super Tax’ remains, with £3 in every £4 spent on the average priced bottle of Scotch in the UK still collected in taxation, and a significant disparity between what consumers pay in tax on Scotch and other alcoholic products.
“HM Treasury should move quickly to begin detailed discussions with the industry CHARLES IRELAND Diageo about long-term reform of the UK’S alcohol tax regime.”
The Campaign for Real Ale’s national chairman, Jackie Parker, said the surprise decision to also freeze duty on beer “will no doubt go some way to keeping the British pub-going tradition affordable”.
The Society of Independent Brewers (SIBA) had warned that a planned rise in line with inflation would have meant a £100 million hit to Britain’s brewers.
Chief executive Mike Benner said there was also good news for his members in the Budget via the £1.5 billion “high street rescue plan”, cutting business rates for most English pubs by a third.
“As the policy only applies in England brewers, publicans and responsible drinkers in Scotland, Wales, and Northern Ireland will want their devolved administrations to back this proposal too,” he added,
Miles Beale, chief executive of the Wine and Spirit Trade Association, described a decision to increase wine rates in line with inflation as a “hammer blow to this great British industry”.
“It actively undermines a sector that has been hardest hit since the Brexit referendum and will be thoroughly unwelcome for the 33 million consumers of the nation’s most popular alcoholic drink.
“This inflationary rise is grossly unfair, unjustified and counter-productive. The UK is the world’s biggest wine trading nation and, as such, deserves government’s support, not punishment.”
Cigarette duty will rise by inflation plus 2 per cent with the increase coming into force hours after the Chancellor sat down following his speech.
0 Fears that Chancellor Philip Hammond planned a hefty hike in duty on spirits proved unfounded
“We are delighted to have a Chancellor who wants to help drinkers of Scotch, gin, and our hard-pressed pubs”