Whisky tax could be lowered ahead of referendum

A TREASURY minister has given a strong hint that whisky duties could be cut in the Budget six months before the Scottish independence referendum.

Glenmorangie distillery. Picyture: submitted

Tory economic secretary Nicky Morgan pledged that the government would look at the duty escalator on spirits in a Westminster Hall debate on how whisky sales in the UK have been squeezed by 12 per cent in the last five years because of high taxation.

After MPs complained about the 79 per cent duty level compared to 48 per cent for beer, Ms Morgan said: “I can give an assurance that I will give this very serious consideration in the run up to the Budget, and I certainly will discuss it with my colleagues in the Treasury, including my right honourable friend the Chancellor of the Exchequer [George Osborne].”

There has been speculation among MPs that the Budget in 2014 will contain measures to boost Scotland in an effort to support the No campaign.

And in the debate today, called by Labour Central Ayrshire MP Brian Donohoe, the chairman of the all-party whisky group, senior Lib Dem MPs put pressure on the coalition.

Both Chief Treasury Secretary Danny Alexander and Scottish Secretary Alistair Carmichal also have distilleries in their constituencies and have in the past campaigned for fairer tax for whisky.

Alan Reid, Lib Dem MP for Argyll and Bute, said: “It is very unfair that whisky is taxed far higher than beer and wine. We must be about the only country in the world that taxes our own product higher than imported products like wine.”

Sir Robert Smith, Lib Dem MP for West Aberdeenshire and Kincardine, said: “The crucial point about the export industry is the signal of the way we treat whisky at home sends a signal to foreign importing markets.”

Gordon MP Sir Malcolm Bruce said: “The trouble with that of course is having abolished the beer escalator that division is going to be eliminated very quickly.

Mr Donohoe noted: “Consumers should be treated fairly across the range of alcohol products. Scotch whisky drinkers are being very heavily penalised as it stands just now.

“Scrapping the escalator would boost UK sales and therefore UK jobs in the industry.”

Angus Robertson, SNP MP for Moray, said: “We’ve heard interventions from the Labour Party, the Liberal Democrats and now from the Scottish National Party, making up 58 out of the 59 members of parliament at Westminster from Scotland, all of us saying we want tax fairness and duty fairness.”