Chancellor Jeremy Hunt's autumn statement needs to give whisky and the wider spirits industry a break – David Mundell

A fairer approach to taxation of spirits is essential for the economy

As the UK waits for the Chancellor’s autumn statement tomorrow, there's an urgent need to shine a light on a critical, yet often overlooked, part of our economy and culture: the spirits industry, with Scotch whisky at its heart. Spirits, including world-renowned Scotch, are not just high-quality drinks enjoyed by millions; they are a strategically important sector of the economy and are also central to our cultural identity. The UK is a world-class distiller, we should be proud of that.

The industry’s contribution is monumental. Yet, despite their significance, spirits find themselves at a distinct disadvantage. The current fiscal landscape has inadvertently created an uneven playing field.

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Spirits account for a third of all alcohol sales in hospitality venues, yet they receive no benefit from the Brexit Pubs Guarantee. This policy, while beneficial in keeping duty lower for high-volume drinks served from kegs, inadvertently places spirits at a competitive disadvantage – along with the half of all drinkers who choose something other than a pint. This oversight is more than just a policy gap; it is a threat to an industry that is a cornerstone of our economy and cultural heritage.

Consider the Scotch whisky industry: it's not merely about distilling spirits. These distilleries attract tourists worldwide and bolster a vast network of local businesses. With more than 42,000 jobs directly and in the supply chain – including many in rural areas – any policy that disadvantages the industry could trigger far-reaching economic consequences.

The government's commitment to supporting pubs is laudable. However, extending business rates relief and protecting draught products, while simultaneously hiking alcohol duty on spirits like Scotch whisky strikes a dissonant chord. Such a move would only worsen the spirits sector's competitive position.

The display of resilience and adaptability by the industry, especially during tough economic periods, has been remarkable. This industry has also been a steady contributor to the UK's economy through job creation and stimulating growth. Following the significant duty increase on August 1, a further hike would not only harm this vital industry but also contradict our shared goals of economic recovery and inflation control.

As the Chancellor prepares for the autumn statement, it is crucial to consider the broader impact of fiscal decisions on industries like the spirits sector. The choices made now will significantly influence this sector’s ability to continue fuelling the UK's economic growth.

It is imperative that our government reassess its stance on alcohol duty. A more equitable approach that recognises the unique contribution and needs of the spirits industry – particularly Scotch whisky – is not just fairer, it is essential for the balanced growth and sustainability of our economy. As we navigate these challenging times, we must ensure that all sectors, including the often overshadowed spirits industry, are given the support and recognition they deserve. The path to economic recovery and growth is a collective journey, and every industry, including the spirits sector, plays a pivotal role.

The Rt Hon David Mundell is the Conservative MP for Dumfriesshire, Clydesdale and Tweeddale.



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