Scotch Whisky Association says industry faces ‘discrimination’ compared to other distillers over tax burden

The Scotch Whisky Association has claimed the industry faces “discrimination” compared to other distillers over the tax burden following the latest budget.

Taxation currently covers more than 70 per cent of the value of a bottle of scotch, gin or vodka, the highest rate in any G7 country, but following the Budget, the tax burden on the averaged priced bottle of Scotch Whisky will rise from 70 per cent to 75 per cent.

The Scottish Secretary Alister Jack is said to have conceded at the time that a rise in alcohol duty was “not what I wanted for the Scottish industry”.

Liberal Democrat MP Alistair Carmichael who has now filed an amendment to the Finance Bill to cancel the rise, dared the Scottish Secretary Alister Jack to threaten a resignation unless it is reversed.

Scotch Whisky faces the highest tax rate in any G7 country, and will now rise further.

The Shetland and Orkney MP said: “The Scotch whisky industry is the jewel in the crown of Scotland’s food and drink industry. Douglas Ross and Alister Jack both know how damaging the increase in duty will be and have said so. My amendment would cancel the increase and freeze the rate of duty on whisky and other spirits. Will Douglas Ross and Alister Jack vote for what they know to be right or will they instead put their party interests first?

“The Tories have a bare cupboard in their choices for Scottish Secretary and Alister Jack knows this. He should back us against this tax hike and dare the Prime Minister to sack him. Whisky producing communities across Scotland will be watching.

“Ross and Jack are never slow to talk up industry concerns when it is the SNP causing a mess over the Deposit Return Scheme or advertising bans – it is rank hypocrisy to stay silent while the Chancellor squeezes distillers for their last penny. Either they are too weak to stand up for our flagship industry or they simply do not care.

“The last thing our distillers need now is another tax rise on top of inflation and cost-of-living challenges – and a total lack of support from the government.”

His amendment, which will be brought when parliament returns from recess next week was backed by the Scotch Whisky Association, who labelled the rises a “historic blow”.

The SWA had called on the UK government to continue the freeze announced by the UK government back in December, and say the rise will fuel inflation, dent consumer confidence and add to pressures in the hospitality industry.

Mark Kent, Chief Executive of the SWA, said: “The UK government promised to ensure the tax system supports Scotch Whisky, but since that promise was made the tax burden has increased and, crucially, the discrimination faced distillers versus other alcoholic products has got worse. We want the government to keep its promise, and that starts by reversing the decision to increase tax on business and cost to consumers during a cost of living crisis, further fuelling inflation in the process.

“MPs will have the opportunity to vote down the largest tax increase on the Scotch Whisky industry in 40 years. We urge them to vote for the amendment, reject the tax rise, and send a message to the UK government to keep its commitment to the Scotch Whisky industry.”

The Scottish Secretary has been approached for comment.