Scotch whisky industry welcomes tax freeze

The tax changes could protect 7,000 jobs. Picture: PA

Industry experts welcomed the move as support for consumers and the industry, which generates £1 billion to the Exchequer in taxes.

The Chancellor described the Scotch whisky industry as a “great British success story”. He continued: “To support that industry, instead of raising duties on Scotch whisky and other spirits, I’m today going to freeze them.”

David Frost, chief executive of the Scotch Whisky Association, said: “This show of support for distillers will be warmly welcomed across the Scotch whisky industry.” The body said the move would halt planned increases of 4.8 per cent in excise duty, which would have added another 40p in tax to a bottle.

“We are delighted the Chancellor and the Chief Secretary to the Treasury listened to our case for scrapping the unfair alcohol duty escalator and freezing whisky duty. It is a move that supports hard-pressed consumers, a major manufacturing and export industry, and the wider hospitality sector.”

The scrapping of the alcohol duty escalator, which was brought in by Labour and increased duty on Scotch whisky by 2 per cent above retail price index inflation every year since 2008, has been the subject of an industry campaign. Speaking for the Call Time on Duty campaign, which lobbied for the policy’s removal, Jonathan Isaby, chief executive of the TaxPayers’ Alliance, said: “This is a good day for ordinary drinkers across the country. It is also a good day for the many small businesses that they support.

“The Call Time on Duty campaign has consistently argued the duty escalator was bad for consumers, business and the economy. We applaud the Chancellor for taking the decision to get rid of it.”

Diageo, the world’s biggest spirits company, said the tax changes were a huge boost to the market and would help sales at home and abroad.

The British Beer and Pub Association, representing an industry suffering from 28 pub closures a week, said the moves would help protect more than 7,000 jobs in the next two years, as firms battle squeezed consumer spending and supermarket competition.