The UK’s complex system of alcohol duties should be simplified, one of the top candidates to become chancellor under Boris Johnson has said.
Liz Truss, the Chief Secretary to the Treasury, said she wanted to boost Scotch whisky exports and called for a “simpler tax system” with a lower tax burden for individuals and businesses.
Ms Truss, who is seen as being in competition with Mr Johnson’s one-time leadership rival Sajid Javid for the role of Chancellor, was open at a gathering of Westminster journalists about her ambition to work “in the engine room of the British economy” under the next Prime Minister.
Tax and duties make up nearly three-quarters of the cost of a bottle of whisky in the UK, and taxes on domestically-produced spirits are 16 per cent higher than on imported wine.
The Scotch Whisky Association won a freeze in spirit duty in the last budget, but has highlighted the fact that taxes on wine decrease as alcohol strength increases in its calls for a “fairer” system.
Asked whether she backed a call from Mr Johnson’s leadership rival Jeremy Hunt for a full review of spirit duty, Ms Truss said: “In general, we need a simpler tax system. Our tax code is far too long.
“In particular, our business and corporation taxes are out of date with the way that companies work today. But the answer isn’t putting extra taxes on some companies, the answer is simplifying the overall system. Of course we should continue to look at areas like alcohol duties as well.”
Ms Truss said the Tories need to be bolder in defending tax cuts for the rich, after Mr Johnson put forward plans to reduce the tax bill for people earning more than £50,000.
“The reason that Boris is getting flak for this is that the Conservative Party haven’t been prepared to make these arguments for at least a decade,” she said, adding that Margaret Thatcher’s tax-cutting chancellor Lord Lawson was her favourite occupant of Number 11.
Shadow chancellor John McDonnell said: “This is back to the 1980s from Liz Truss and the Tories... It’s hard to believe that they haven’t learned the lessons of nearly a decade of Tory austerity.”